diff --git a/.changeset/sweet-maps-invent.md b/.changeset/sweet-maps-invent.md
new file mode 100644
index 0000000000..390ce57dc7
--- /dev/null
+++ b/.changeset/sweet-maps-invent.md
@@ -0,0 +1,5 @@
+---
+'@backstage/plugin-catalog-unprocessed-entities': patch
+---
+
+Fixed the `convertTimeToLocalTimezone` function in the FailedEntities component to correctly parse ISO 8601 date strings and set the timezone to the current local timezone.
diff --git a/plugins/catalog-unprocessed-entities/src/components/FailedEntities.tsx b/plugins/catalog-unprocessed-entities/src/components/FailedEntities.tsx
index 1c92d27cb6..32a7b42eb4 100644
--- a/plugins/catalog-unprocessed-entities/src/components/FailedEntities.tsx
+++ b/plugins/catalog-unprocessed-entities/src/components/FailedEntities.tsx
@@ -93,18 +93,15 @@ const RenderErrorContext = ({
  * Converts input datetime which lacks timezone info into user's local time so that they can
  * easily understand the times.
  */
-const convertTimeToLocalTimezone = (strDateTime: string | Date) => {
-  const dateTime = DateTime.fromFormat(
-    strDateTime.toLocaleString(),
-    'yyyy-MM-dd hh:mm:ss',
-    {
-      zone: 'UTC',
-    },
-  );
+export const convertTimeToLocalTimezone = (dateTime: string | Date) => {
+  const isoDateTime =
+    typeof dateTime === 'string' ? dateTime : dateTime.toISOString();
 
-  const dateTimeLocalTz = dateTime.setZone(DateTime.local().zoneName);
+  const strDateTime = DateTime.fromISO(isoDateTime, {
+    zone: DateTime.local().zoneName,
+  });
 
-  return dateTimeLocalTz.toFormat('yyyy-MM-dd hh:mm:ss ZZZZ');
+  return strDateTime.toFormat('yyyy-MM-dd hh:mm:ss ZZZZ');
 };
 
 export const FailedEntities = () => {
diff --git a/plugins/catalog-unprocessed-entities/src/plugin.test.ts b/plugins/catalog-unprocessed-entities/src/plugin.test.ts
index add3d677f0..ebeb24f4ab 100644
--- a/plugins/catalog-unprocessed-entities/src/plugin.test.ts
+++ b/plugins/catalog-unprocessed-entities/src/plugin.test.ts
@@ -13,6 +13,7 @@
  * See the License for the specific language governing permissions and
  * limitations under the License.
  */
+import { convertTimeToLocalTimezone } from './components/FailedEntities';
 import { catalogUnprocessedEntitiesPlugin } from './plugin';
 
 describe('catalog-unprocessed-entities', () => {
@@ -20,3 +21,29 @@ describe('catalog-unprocessed-entities', () => {
     expect(catalogUnprocessedEntitiesPlugin).toBeDefined();
   });
 });
+
+describe('components/FailedEntities/convertTimeToLocalTimezone', () => {
+  it('should correctly a UTC ISO string to local time', () => {
+    const utcTime = '2024-09-03T08:15:08.088Z';
+    const localTime = convertTimeToLocalTimezone(utcTime);
+    expect(localTime).toBe('2024-09-03 08:15:08 UTC');
+  });
+
+  it('should correctly convert a UTC Date object to local time', () => {
+    const utcTime = new Date('2024-09-03T08:15:08.088Z');
+    const localTime = convertTimeToLocalTimezone(utcTime);
+    expect(localTime).toBe('2024-09-03 08:15:08 UTC');
+  });
+
+  it('should return "Invalid Date" for an invalid date string', () => {
+    const invalidTime = 'invalid-date-string';
+    const localTime = convertTimeToLocalTimezone(invalidTime);
+    expect(localTime).toBe('Invalid DateTime');
+  });
+
+  it('should handle empty string input', () => {
+    const emptyString = '';
+    const localTime = convertTimeToLocalTimezone(emptyString);
+    expect(localTime).toBe('Invalid DateTime');
+  });
+});