East Midlands businesses advised to prioritise credit control as R3 report shows rise in overdue invoices
Late payment pressures intensified for East Midlands businesses in the first quarter of 2026, with the region seeing an increase in overdue invoices, according to a new report from R3, the UK’s trade body for restructuring, turnaround and insolvency professionals.
R3’s latest Quarterly Business Health report, based on data from Creditsafe, shows that there were 700,000 late payments in the region in Q1 2026, an increase of three per cent compared to the same period last year when there were 679,000 late payments.
There were also around 73,000 companies in the region with overdue invoices on their books last quarter, a similar number to Q1 2025.
Meanwhile, quarterly insolvency‑related activity in the region - including administration and voluntary and compulsory liquidations – increased by five per cent to 278 cases, compared to the final quarter of 2025 when there were 264 cases. However, levels were down by five per cent compared to Q1 2025 when there were 292 instances.
R3 Midlands Chair Stephen Rome, a partner at Penningtons Manches Cooper, commented: “Our latest Business Health report highlights an early warning sign for local businesses, with more companies being affected by late payments.
“With a worrying increase in the number of late payments locally, day‑to‑day cashflow remains under real strain.
“Late payments are a significant contributor to business failure, and mounting arrears can quickly turn manageable cashflow issues into a wider crisis, particularly for small and medium sized companies.
“With businesses also facing higher energy and fuel costs linked to global uncertainty, our members expect pressure to intensify as the year progresses.
“With this in mind, business owners should prioritise credit control and seek professional advice early if they begin to struggle, rather than waiting until problems become unmanageable.”
Most UK regions saw year-on-year increases in late payments in Q1 2026 with the West Midlands recording both the highest number (3.05 million) and the sharpest increase in late payments in the UK in Q1 2026 (up 17 per cent).
The government states that late payments cost the UK economy £11 billion each year and lead to the closure of 38 UK businesses every day, while announcing plans to tackle the issue.