One-in-five Midlands businesses victims of late payment – R3

RESEARCH by insolvency trade body R3 has revealed that one-in-five (21%) of Midlands businesses are victims of late payment and have invoices more than 30 days overdue.
 
With the national figure also standing at one-in-five (21%) and with earlier R3 research finding that late payment is a primary or major factor in a similar number (20%) of corporate insolvencies, the Midlands branch of R3 is calling for more to be done to eradicate this practice.

R3 Midlands chairman Richard Philpott, a partner at KPMG in Birmingham, said: “The late payment problem is a persistent one for our local businesses.  In April this year, an R3 survey found that Midlands businesses had almost one-in-five (18%) of their invoices paid late.
 
“R3 recognises that the Government is keen to make an impact on late payment with new guidelines and business campaigns, but progress has been slow over 2014 and 2015. A stricter and more effective line needs to be taken.”

R3’s latest research also reveals that larger UK businesses continue to show more positive signs of growth compared to smaller firms.  More than four-in-five (83%) of larger businesses – those with more than 250 employees – are experiencing one or more indicators of growth, compared to just over half (58%) of sole traders.
 
Indicators used by R3 include increasing profits, sales volumes or market shares and investment in new equipment.
 
Philpott added: “Our figures show that smaller businesses are still facing an uphill struggle to recover from the economic downturn. Poor payment practices can put viable businesses at risk of closure, and sole traders are particularly vulnerable.

“Addressing the UK’s poor payment culture has to be a top government priority if we are to give regional economic growth the best chance of success.”