Overdue invoices in the South West reach two-year high

The number of overdue invoices on the books of South West businesses reached the highest levels in more than two years in January.

Insolvency and restructuring trade body R3’s analysis of data provided by Creditsafe shows that businesses in the South West had a total of 342,805 overdue invoices on their books last month. This was the highest number on record since December 2022’s figure of 360,757.

Overdue invoice numbers rose by 7.7% year-on-year from January 2024’s total of 318,149, and rose by 3.2% when compared to December 2024’s total of 332,294.

Bethan Evans, chair of R3 in the South West, says: “The last couple of years have been incredibly challenging for South West businesses. While a decline in inflation levels in 2024 provided some relief by slowing the pace of rising costs, this was offset by a host of other mounting challenges.

“Ongoing supply chain disruptions throughout last year made it much harder for businesses to operate smoothly, while high and rising energy costs have continued to squeeze profit margins. These difficulties were further compounded by new pressures introduced in the Autumn Budget, with businesses now having to reassess their finances in the face of rising Employers’ National Insurance Contributions and an increase in the minimum wage.

“It’s clear from these statistics that many firms are now feeling the impact of these ongoing challenges, with businesses having to delay more and more payments for longer and at record levels.”

The total number of South West companies with overdue invoices on their books rose to 38,101 in January, the highest level since April 2023’s total of 38,243.

The number of companies with overdue invoices on their books rose by 3.2% year-on-year compared to January 2024’s total of 36,935.

Evans, who is a partner at Menzies, said: “Throughout 2024, the number of South West companies that failed to pay their bills on time remained fairly steady, but January marked the first time figures have climbed above 38,100 in a number of years. The coming months will be crucial in understanding whether this is a temporary spike or an indication of deeper, more widespread challenges.

“I would urge businesses in the South West to seek advice at the first signs of financial distress. Conversations around money can be extremely difficult, but by facing your problems early, you’ll have more time to think about your next steps and more potential options available to you for resolving your concerns.”