Late payment problems eased at end of 2022, finds insolvency trade body

Analysis by insolvency trade body, R3, has found that the number of overdue invoices has fallen for businesses in the North-west.

R3’s analysis of Creditsafe data, released at the end of December 2022, found that the number of outstanding invoices owed to firms in the North-west fell 32.1% month-on-month in November 2022, representing over 250,000 late payments made.

Data also revealed a fall of just under 10% in the number of businesses behind on their own bills and payments, down to 54,800.

R3’s North West chair Allan Cadman, and an insolvency practitioner with Xeinadin Group, explained:

“The drop in late payments could be due to a number of reasons. Since restrictions on issuing winding up orders expired in April, creditors have been actively pursuing debts and as cases work their way through the court process, we are seeing a big rise in the number of compulsory liquidations.

“With the economic climate too, many companies are doubling down on credit control to protect their own cashflow. Given the rise in insolvencies, it could also be that some companies which were struggling to pay their bills have gone out of business.

“Whatever the reason, we would hope that these figures are not just a temporary blip but reflect a longer-term trend. Late payment is a real challenge for businesses and can have a knock-on effect throughout the entire supply chain.

“Businesses which are struggling to pay their bills on time should be aware that creditors are taking a tougher stance and should seek professional advice from an insolvency or restructuring professional rather than running the risk of legal action.”