• Mon. Apr 15th, 2024

North East Connected

Hopping Across The North East From Hub To Hub

R3 North East chair Chris FergusonR3 North East chair Chris Ferguson

The number of North East businesses with overdue invoices on their books has fallen for the third consecutive month.

According to analysis by insolvency and restructuring trade body R3 of new data provided by CreditSafe, there were 12,141 companies across the region that were still holding invoices that had gone past their agreed payment period.

This figure has dropped every month since its 2023 peak of 12,303 back in August, and is also around 1.5 per cent lower than the 12,321 overdue invoices in November last year.

North East business had 141,291 outstanding invoices on their books last month, 12.7 per cent fewer than the 2023 high in February of 161,797, and 13.9 per cent below the 164,180 that were overdue in November last year.

R3’s research also found that, while the 89 insolvency-related activities in the region in the month just gone was almost identical to October’s total of 90, this was still 29 per cent higher than the 69 insolvency-related activities in November 2022.

There were also 1,431 new businesses set up in the North East during November, down slightly on the 1,499 last month, but ahead of the 1,391 set up in November last year.

The government has introduced several reforms to the voluntary Prompt Payment Code in recent years, with a view to address late payment problems, while in last month’s Autumn Statement, chancellor Jeremy Hunt announced that, from next April, any company bidding for large government contracts would have to show they paid their invoices within an average of 55 days.

Chris Ferguson, North East chair of R3 and a director and head of recovery & insolvency at Gosforth-based RMT Accountants & Business Advisors, says: “Late payment is one of the biggest bugbears facing North East business owners, and despite the government’s efforts to address this, it still remains an enduring issue for far too many regional firms.

“Delayed payments are often a contributing factor in many business failures and can have a far wider impact than just on the distressed business itself.  Customers failing to pay invoices on time can have a serious impact on a supplier’s cash flow too.

“The slow fall we’ve seen through the autumn in the number of North East firms facing late payment problems is clearly a positive trend, but there are still many businesses suffering due to customers not paying their debts within their agreed payment terms.

“Being unable to pay your bills on time is an indicator of business distress and should be a clear prompt for business owners to seek professional advice. Early intervention to identify and address underlying issues is critical to ensure good businesses can continue to operate.”