Overdue invoices in the North East reach over two-year high, new R3 research shows

R3’s analysis of data provided by Creditsafe shows that businesses in the North East had a total of 173,197 overdue invoices on their books last month. This was the highest number on record since October 2022.

Overdue invoice numbers rose by 21% year-on-year from January 2024’s total of 143,101. This was the third largest yearly percentage increase when compared to the other UK regions and nation, preceded only by the West Midlands (50.4% increase) and Scotland (44.3%).

Kelly Jordan, Chair of R3 in the North East, says: “The start of the year is often a challenging time for businesses, but this sharp rise in overdue invoices suggests that many firms in the North East are finding it harder to adapt to ongoing financial pressures.

“Costs remain high, recent announcements from the Budget have added to the financial strain, and the overall economic climate remains volatile, making it more difficult for businesses to plan ahead and manage their cash flow effectively.

“Even businesses that have successfully managed through previous challenges are now facing new pressures, and for some, this could mean having to make tough decisions about their future.”

The total number of North East companies with overdue invoices on their books rose to 12,855 in January, also the highest level since October 2022’s total of 13,606.

The number of companies with overdue invoices on their books rose by 7% year-on-year from January 2024’s total of 12,011.

Kelly, who is a partner at Muckle LLP, continues: “The rise in North East firms paying their bills late is a sign that payment practices in the region are getting worse, not better. More businesses are waiting longer to be paid, which is placing immense strain on their cash flow. For many, it’s not just about chasing a single late payment, but dealing with a ripple effect that impacts their ability to pay suppliers, staff, and other bills on time.

“My advice to business owners is simple – know your business inside out and if you spot an issue, seek help as soon as you can. There are many options out there for businesses that are struggling, but those options become fewer if you don’t move quickly and seek advice before the problem spirals out of control.”