Scottish insolvency activity recently reached the highest level for a decade, according to the latest figures published by Accountant in Bankruptcy. 1,132 firms became insolvent in Scotland over the 12 months to March 2023, highlighting the real impact of the financial stresses and strains that many small businesses are facing.

Debt recovery goes almost hand-in-hand with insolvency, and we are beginning to see an uptick in activity as businesses across the board tighten their belts. For all firms, the ability to pay invoices – or indeed bills of any kind – and collect payments is becoming more challenging. Just as cash flow may be restricted for one company in debt, it can be much the same for those who provide credit and often it involves a chain of multiple businesses.

The UK has narrowly escaped a recession, but it remains a difficult economic environment for businesses. Many of the support initiatives launched during the pandemic are also beginning to wind down. The £77 billion drawn down through the UK Government’s Covid loan schemes must eventually be repaid, and we expect the debt recovery process to start ramping up in the coming months.

Start thinking about debt recovery before it's too late - David Alexander