The number of North East businesses with overdue invoices on their books has risen for the eighth consecutive month.
According to analysis by insolvency and restructuring trade body R3 of new data provided by CreditSafe, 13,606 North East firms had failed to clear 238,951 invoices from their systems last month by the date they were due.
The number of insolvency-related activities in the region last month, which includes liquidator appointments, administrator appointments and creditors’ meetings, remained steady in October, rising marginally to 60 from 59 in September.
The R3 data also revealed that there were 1,382 new businesses set up in the North East during October, which is the fourth biggest monthly total of the year so far and 12 per cent rise on the 1,239 firms that were founded in the preceding month.
R3 North East chair Chris Ferguson, who is head of recovery & insolvency at Gosforth-based RMT Accountants & Business Advisors, is advising company directors who find themselves in financial difficulty to seek qualified advice as early as possible.
He says: “Problems paying invoices as they fall due is a primary indicator of business distress and can also give rise to personal liability issue for directors on a company’s supplier base, who will likely be reliant on receiving timely payments to meet their own debt obligations.
“Insolvency practitioners regularly deal with cases where suppliers encounter trading issues for just this reason and this continuing upward trend within the region is a real concern.
“Trading conditions are not getting easier for any part of the North East economy, and with the cost of raw materials and utilities continuing to rise sharply, there’s little indication that this will improve in the foreseeable future.
“Business owners and management teams who find themselves facing cashflow difficulties, or who have general concerns about their business and finances, should seek early qualified advice to support them with addressing these issues, which undoubtedly provides the best possible chance of securing long-term financial sustainability.”