Firms are counting the cost of the late payers.
One in five businesses in Yorkshire and the Humber and the North East are owed payment on invoices that are over 30 days past due.
It’s a picture that is repeated across the UK, according to new research by insolvency trade body R3.
The research also found that across the UK, manufacturing (27%) had the highest rate of businesses that were owed late payments, followed by services (22%), and retail and distribution (13%).
The findings have come from Yorkshire R3, the trade body for Insolvency Professionals, and represents the UK’s Insolvency Practitioners. R3 stands for ‘Rescue, Recovery, and Renewal’ and is also known as the Association of Business Recovery Professionals.
Chris Wood, Yorkshire R3 committee member and partner at Clough Corporate Solutions in Cleckheaton, said: “The late payment problem is a persistent one and not only for businesses in Yorkshire but across the UK and puts unnecessary strain on the finances of businesses.
“Businesses having to wait too long to receive money owed can have a harmful knock-on effect not only on their own business but further down their supply chain too.”
Mr Wood continued: “The rise in the proportion of businesses in a position to expand is a positive indicator.
“However, with businesses looking to expand, cash-flow becomes increasingly important and late payment can needlessly jeopardise access to cash.
“Being paid late and being paid inconsistently prevents businesses from being able to plan ahead with confidence.”
The finding is from R3’s latest Business Distress Index, a long-running survey of business concerns and growth prospects carried out by BDRC Continental.
The latest survey also reveals 19% of businesses in the region are experiencing business expansion, down from 21% in April of this year.
Business distress remains at record lows, with only 18% of Yorkshire and the Humber and the North East businesses experiencing any of the key signs of business distress – including decreasing profits, sales volumes, or market shares, the regular use of maximum overdraft facilities, and new redundancies. This compares with 28% of businesses across the UK experiencing any of the key signs of distress.
At the same time, indicators of business growth across the UK also remain near record highs of 67% compared with 62% of businesses in the region. A record high number of businesses across the UK are experiencing increased sales volumes (43%), compared with 45% in Yorkshire and the Humber and the North East.