• Sun. Apr 14th, 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 insolvency events in the North East over the third quarter of the year was eight per cent lower than the number for the preceding three months, but was still more than 25 per cent higher than the figure for the third quarter of 2022.

According to analysis by insolvency and restructuring trade body R3 of new data provided by CreditSafe, there were 244 insolvency-related activities, which includes liquidator appointments, administrator appointments and creditors’ meetings, across the region from the beginning of July to the end of September.

This figure compares to the 264 insolvency events in the North East during April, May and June, with 249 happening in the first three months of 2023, but it is substantially ahead of the 196 regional insolvency-related activities that took place in the third quarter of 2022.

R3’s research also found that the number of new businesses set up in the North East during the third quarter of the year increased marginally in comparison to the preceding three months, from 4,164 to 4,205.

Overall, there were 12,861 new businesses set up across the region during the first three-quarters of 2023, an increase of around five per cent on the 12,270 that had been launched in the nine months to the end of September last year.

Over 12,250 North East businesses had more than 147,000 overdue invoices on their books during September that should already have been settled, with both figures being slightly lower than August’s equivalent figures.

Chris Ferguson, North East chair of R3, who is a director and head of recovery & insolvency at Gosforth-based RMT Accountants & Business Advisors, says: “The challenges that many North East businesses have faced right through 2023 is evident in the significant rise in the number of insolvency events from last year to this.

“Despite this, it’s encouraging to see the growing number of people across the region who still have the confidence to set up in business for themselves.

“Late payment of invoices is often still one of the clearest signs that a business is stressed, and given delayed payments have a domino effect on the finances of suppliers, it can often have a more widespread impact than on just one business.

“It’s important for owners and directors of struggling businesses to remember that there is a huge amount of work that insolvency practitioners can do ‘under the radar’ to prevent the need for formal insolvency processes, but it is crucial that they seek qualified advice at the earliest possible opportunity, so that they have access to the widest possible range of potential solutions to support businesses with financial difficulties.”