Tag: Creditsafe

The cheque’s in the post: Over 1.2 million overdue invoices in Scotland this winter, new R3 research shows

Scottish firms had over 1.2 million overdue invoices on their books this winter, new research from insolvency and restructuring trade body R3 has revealed.

R3’s analysis of data provided by Creditsafe shows 1,231,703 invoices were overdue in Scotland over the winter months – with 416,856 in December 2022, 400,272 in January 2023 and 414,575 in February 2023.

Scotland saw the biggest month-on-month increase in late payments between January 2023 and February 2023 in the UK, with numbers rising by 3.6%, followed by the North West (2.7% rise), the North East (2.5%) and Yorkshire and Humberside (2.5%).

And more than 94,000 Scottish businesses (94,144) reported that they had overdue invoices on their books this winter – a figure which peaked last month at 32,074 firms, which was 3.7% higher than the January 2023 total of 30,939.

Richard Bathgate, Chair of insolvency and restructuring trade body R3 in Scotland, says: “Times are still tough for Scottish businesses as they battle rising costs and contend with cautious consumers.

“Both of these will have an effect on their cashflow levels and their ability to pay invoices on time, which might explain why Scottish firms had so many overdue invoices on their books this winter.

“Paying invoices late can be a sign of wider issues within the business, or that it’s financially distressed, and can have a negative knock-on effect on supply chains if the payment issues from one customer are passed on by the supplier to those they owe money to.”

Richard, who is Restructuring Partner at Johnston Carmichael in Aberdeen continues: “As a company director, keeping your business financially healthy should be a top priority, and you should be alert to any signs that issues may be arising. 

“If your business is having problems paying invoices, staff or suppliers, or you’re worried about its finances, that’s the time to seek expert advice from a restructuring professional or licensed insolvency practitioner.

“If anyone knows how best to avoid an insolvency, it’s an insolvency practitioner.  Seek early help and you will have more time and options open to you to take a considered decision about your next steps.”

Overdue invoices in Scotland hit 2022 high, new R3 research shows

The number of overdue invoices in Scotland has reached its highest level for this year, according to new research from R3, the insolvency and restructuring trade body.

R3’s analysis of data provided by Creditsafe shows the number of invoices in Scotland that have gone past their payment deadline rose to 593,114 in October – the highest recorded monthly figure in 2022, and 13,941 more than September’s figure of 579, 173.

The monthly rise in late payments has been mirrored across the UK, with the South East of England and Scotland seeing the biggest jump between September and October rising 4.1% and 2.4% respectively.

The number of Scottish-based firms with overdue invoices on their books has also risen, with 101,835 companies failing to meet payments on time between August and October – an increase of 1,016 companies from the previous three months.

Richard Bathgate, Chair of insolvency and restructuring trade body R3 in Scotland, says: “The increase in late payments we’ve seen in October 2022 suggests that more and more businesses are either financially distressed or potentially concerned about their cash flows and that more businesses – those on the receiving end of the late payment – are going to potentially have issues paying their own staff and suppliers.

Richard, who is Restructuring Partner at Johnston Carmichael, continues: “Those businesses that are struggling – whether that’s because they’re behind on payments or because they’re waiting for overdue invoices to be paid –need to have a contingency plan in place for mitigating the issue.

“I urge any directors worried about their company’s cash flows or finances to seek advice from a qualified restructuring professional as soon as they can.

“It can take courage but having an early discussion whilst pressures in the business aren’t severe can be the difference between a successful turnaround or a decline into financial distress. 

“You won’t know what tools are available in the toolkit of a restructuring professional unless you ask and if anyone knows how to avoid an insolvency it’s professionals who deal with them every day.”