THE number of businesses which have become insolvent has risen by eight per cent in the past year.
The total number of insolvencies rose from 872 in 2013 to 943 in 2014, primarily due to a spike in liquidations during this period, according to figures from KPMG. In the same time period, the number of administrations fell significantly.
Liquidations, which tend to affect smaller businesses, increased by 17 per cent from 747 to 876, whereas administrations, which typically affect larger organisations, fell 46 per cent from 125 to 67.
However, in spite of the year-on-year numbers, business professionals said the total number of insolvencies in the final quarter of 2014 represents a 17 per cent drop from Q3 in 2014 and a 19 per cent decrease when compared to the final quarter of 2013.
One possible explanation for the relatively high numbers of liquidations, say KMPG, is the closure of shell companies or businesses which ceased trading some time ago and are being liquidated as a matter of housekeeping.
Blair Nimmo, head of restructuring for KPMG in Scotland, said: "Although the number of Scottish insolvencies increased last year compared to 2013, a quarterly analysis shows a material reduction in both administrations and liquidations compared to the worst period of the recession.
"Those businesses that survived the recession are now able to move forward albeit with a continued close eye on their costs and cash management.
"I believe that most businesses are in a better place operating in a more stable trading environment which makes for easier strategic planning.
"That being said, for the most part I detect only cautious optimism rather than any assumption of significant growth.
"Uncertainties remain, primarily surrounding the political landscape - with the likely outcome of the forthcoming Westminster election far from clear - as well as concerns over issues such as continued problems in the Eurozone and beyond, and the dramatic fall in the oil price."
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