Invoice late payment surge across the UK
Late Payment on the increase in UK regions
As the UK’s economic situation continues to worsen, businesses across the UK face a front-line battle against invoice late payment as businesses fail to pay on time.
According to latest research from insolvency and restructuring trade body R3 which was based on an analysis of data provided by CreditSafe, there has been a steady rise in debts owed by companies in liquidation over the last four months.
In Yorkshire and Humberside there has been a 90% increase, rising from 120 companies in December 2021 to 228 in April. This equates to just under £1.4m of debt owed last December which increased to £2.4m last month.
The growing bad debt figures in Yorkshire and Humberside were reflected across much of the UK with four other regions with higher numbers of debts owed by companies in liquidation: Greater London (354); North West (280); West Midlands (270); and South East (243).
Looking at another indicator of worsening financial distress, late payment of invoices, R3’s analysis of the CreditSafe data also showed continuing problems with this issue as around 51,000 companies in Yorkshire and Humberside once again proved unable to meet their payments on time in April.
Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, comments: “After two very tough years for businesses, unfortunately, the economic prospects look far from encouraging with energy prices soaring, rising inflation and living standards being squeezed.
“We are once again hearing economists talk of stagflation and, with the shadow of another recession appearing to be getting closer, we are already seeing growing signs of pressure on businesses here.
“Amid the backdrop of weak economic growth as the Ukraine crisis looks set to continue, businesses would be well advised to keep a close eye on their cash flow, particularly given the high number of late payments in the region. In addition, since December, we have also seen growing levels of debt with almost double the number of companies in liquidation owing creditors.
“With living standards expected to take their biggest hit for decades, consumer spending is likely to fall, impacting almost every sector, and we urge businesses to seek professional advice at the first signs of financial problems when more options will be available to them.”
