Cashflow issue grows

COMPANIES in the South East of England had nearly 19,000 more unpaid late invoices in February than in January of this year, according to the insolvency and restructuring trade body R3.

The research, based on an analysis of data from CreditSafe, shows there was a total of 1,030,261 outstanding late invoices in the South East in February – an increase of 18,552 on January’s figure of 1,011,709.

And the number of businesses that owe money in respect of overdue invoices rose as well, with 94,622 companies in the South East owing money in excess of agreed credit terms in February, compared to January’s figure of 93,963.

The South East’s figures are the highest regional figures outside Greater London.

Businesses in Berkshire were among those included in the new data.

Garry Lee, chairman of R3’s Southern and Thames Valley region, said: “Cashflow has been a significant issue for many companies over the past two years.

“They have faced competing demands for their resources, including repayments for those who have used the Government’s first pandemic loan scheme, the Covid Corporate Financing Facility, which has just been wound down.

“Rising inflation and the cost of doing business will exacerbate the situation for those still owing money, while the pandemic will continue to have a lag effect for some time.

“These factors, combined with uncertainty created by the war in Ukraine, will make it tougher for business to generate growth and pay outstanding invoices.

“The business landscape in the South and Thames Valley is more dynamic and entrepreneurial than many other regions yet this also makes it more volatile and exposed to macro-economic factors.”

Mr Lee added: “One of the knock-on effects of late payments is the risk of contagion within the supply chain and the threat this poses to the wider economy.

“Directors of any business in Berkshire struggling to pay bills or having invoices settled need to remain alert for signs that this is causing their company financial distress.

“If so, they need to seek advice as soon from a qualified and regulated adviser.”