North East businesses had to tackle more than half a million overdue invoices at the start of this year, new figures have revealed.
The total number of overdue invoices on the books of regional businesses hit 522,566 in the first quarter of 2025, according to new research from R3, the Ƶ’s insolvency and restructuring trade body. R3’s analysis of data provided by Creditsafe showed firms were faced with 173,197 in January, 175,020 in February, and 174,349 in March – a huge rise of 21.2% compared to Q1 2024’s total of 431,039.
Looking at the wider Ƶ picture, the North East saw the third largest percentage increase in overdue invoice numbers, preceded only by the West Midlands (46.3% rise) and Scotland (41.4%).
Kelly Jordan, chair of R3 in the North East, said: “Late payment levels in the North East have remained consistently high since October last year, and the surge this quarter compared to last year is a stark reminder of how financial pressures are escalating for local businesses.
“Cost increases that came into effect at the start of this month, including rises to Employers’ National Insurance and the minimum wage have been a major concern for businesses over recent months. Now that they’re here, there’s a real risk they could push more firms into cash flow difficulties, particularly in sectors already running on tight margins like construction, hospitality and retail.”
The total number of North East companies with overdue invoices on their books also rose by 6.7% in Q1 2025 when compared to the same period last year, rising from 36,498 to 38,934.
Ms Jordan, who is a partner at Muckle LLP, said: “It’s concerning to see not just that overdue invoice numbers are rising, but more businesses are finding themselves with overdue invoices on their books. When more companies are struggling to pay their bills on time, it has a knock-on effect across supply chains and makes it harder for others to stay on top of their own finances.
“April could be a turning point for many businesses, and it’s crucial that directors know how to spot the early signs of financial distress. If you’re noticing problems like rising late or missed payments, falling margins, or mounting pressure from creditors, then it’s likely time to speak to a professional. Seeking advice as soon as these issues arise can provide clarity, more time to address the situation, and potentially more options for resolving your concerns.”
Meanwhile, the latest Begbies Traynor Red Flag Alert research has also been published. It suggested the number of businesses in the North East feeling the impact of early financial distress fell in the first three months of 2025 compared with the previous quarter – but the survey was carried out prior to the US announcement in early April of global trade tariffs.
The report , which covers Q1 2025, shows ‘significant’ or early-stage business distress dropping by 12.9% and affecting 10,677 business in the North East, almost 1,600 fewer than in Q4 2024. However, the year-on-year trend in this type of distress continued to be upward, with a 4.1% rise in the region since Q1 2024.
Andrew Little, partner for Begbies Traynor in the North East, said: “Despite our latest Red Flag data bearing out some signs of positive economic progress at the start of the year with the rate of inflation falling to 2.6% in March and better growth than had been predicted, this may well be the calm before the storm.
“With Trump’s threat of global tariffs now a reality, the cautious optimism we saw is now firmly in the past as we brace ourselves for the heightened uncertainty of an escalating international trade war and its impact on our own economy. With no businesses in the North East or across the Ƶ likely to escape the fallout, SMEs should once again prepare for some difficult times ahead.”
