David Alexander, head of debt recovery at Gilson Gray, commented: “The rise in corporate insolvencies in Scotland was expected – particularly after recent high-profile cases of businesses in financial distress and entering administration.

“The rise in compulsory liquidations shows that many businesses are struggling, and creditors are becoming more aggressive with cash collection to recover what they are owed.

“This invariably has a knock-on effect further down the supply chain, with the liquidation of subcontractors and then the sequestration of directors who have issued personal guarantees.”

Mr Alexander continued: “Throw into the mix the high cost of living, high interest rates, weak retail sales, and the surprise rise in inflation, and the stats do not paint a positive picture for the start of 2024.

“Directors should be as proactive as they can with their finances, recovering outstanding debts wherever feasible. Professional advisers, engaged as early as possible in the process, can also support you with any immediate credit issues and help direct your business towards a surer footing in the long term.”