Latest research from the Midlands branch of national insolvency and restructuring body R3 reveals that East Midlands firms had over 330,000 overdue invoices on their books in June, a figure which has increased steadily in recent months, rising by over 4% since March of this year.
According to R3’s report, which is based on an analysis of data from business intelligence provider Creditsafe, there is also a sizeable increase in insolvency-related activities in the region. The number, which includes liquidator and administrator appointments as well as creditors’ meetings, rose by over 12% between May and June of this year, indicating the extent of the economic challenge currently facing the region’s companies.
R3 Midlands chair Eddie Williams, a partner at PwC in the East Midlands, said: “Late payment is a key contributory factor in business insolvency, despite huge effort being made by professional bodies such as R3, policy makers and opinion formers to improve business practice around paying suppliers on time.
“With the UK inflation rate spiralling upwards, along with the cost of raw materials, manufacturing and distribution, there is enormous pressure on business cashflow, which bears the added strain of rising fuel and utility costs and decreasing consumer confidence.
“Now, more than ever, it is crucial for business owners to ensure that they are in control of their invoice ledger and tackling late payment challenges as soon as they become apparent.
“If problems linked to late payment or any other cashflow issue arise, then the sooner business owners look for expert advice on what they can do to resolve them, the more options they will have for finding the best possible outcome.”
