The number of overdue invoices being paid after their due date in Wales dropped 42% in October 2023 when compared to the same period in 2022.
This statistic is according to new research from R3, the UK’s insolvency and restructuring trade body.
R3’s analysis of data provided by Creditsafe shows that overdue invoice numbers in Wales have fallen from 245,759 in October 2022 to 142,266 in October of this year – a drop of 42.1%.
Wales saw the third largest year-on-year fall in overdue invoices of all the nations and regions in the UK, falling only behind the South West (43.9% fall) and the East Midlands (43% fall).
The number of companies with overdue invoices on their books in Wales also fell by 13.3% yearly, from 20,357 in October 2022 to 17,649 in October 2023.
Charlotte May, Chair of R3 in Wales, says: “Nearly 103,500 fewer invoices were paid after their due date in Wales last month than in October 2022, which suggests cash flow management is improving among Welsh businesses, despite the fact the trading environment is currently challenging.
Charlotte, who is Associate Director for South West and Wales at Manolete, continues: “Although overdue invoice numbers have fallen compared to last year, late payment is still an issue for businesses in Wales – and can be a sign that a business has become financially distressed.
“If payment deadlines are becoming an issue, or you’re concerned about your business’s finances, the best thing to do is to speak to a qualified advisor. Many R3 members in Wales are happy to provide a free initial consultation to learn more about your concerns and help you understand the options you have for resolving them.”
Tackling Overdue Invoices in Wales
Manolete’s advice is that businesses in Wales should take a proactive approach to debt collection in Wales and overdue invoices.
This includes taking the necessary steps to ensure payment, such as:
• Being clear about payment terms when entering into any contracts
• Keeping accurate records of all payments made or received
• Regularly reviewing accounts receivable to identify potential risks
• Utilising technology such as accounts software, email reminders and automated systems
• Establishing policies for dealing with late payments quickly and efficiently
By following this advice, Welsh businesses can minimise their exposure to bad debts and help protect their finances against unexpected cash flow issues caused by non-payment.
It could also provide an opportunity for them to invest the money saved in other areas of the business.