Overdue Invoices In Wales: A Legal Perspective
In April 2025, statistics released by R3, the UK’s restructuring and insolvency trade association identified that overdue invoices in Wales had reached a new high. David Owen, Director in the Commercial Litigation team at JCP Solicitors, explains how businesses can seek to avoid invoices falling substantially overdue.
Welsh businesses have reported a 5.8% increase in overdue invoices from April 2024, reaching 156,775 in April 2025. 18,879 businesses reported overdue payments, which suggests growing liquidity pressures on Welsh companies and marks a concerning trend.
Rising labour costs, through increases in the National Minimum Wage and National Insurance, have likely contributed to financial difficulties for many businesses, with more businesses reporting increasingly tight profit margins.
An effective billing and credit control system is vital to increase the prospects of your invoices being paid on time. Companies should have (and implement) clear payment terms, issue invoices promptly and follow up with reminders shortly before the due date.
Late payments can be crippling for SMEs given the effect they have on cash-flow and can create a chain of financial difficulty within the wider network of suppliers, as businesses struggle to meet their own payment obligations. By improving debt collection processes and systems, you can give clarity to your customers, improve your prospects of getting paid on time and protect your own reputation in the wider industry.
It's important to keep a close eye on your debt book, as it can quickly get out of hand. Where payments are late, pursue payment promptly via internal credit control procedures and do not be afraid to escalate to external collections agents/solicitors once that process has been completed. If appropriate/advisable, you can also consider commencement of court or insolvency proceedings to seek to bring matters to a head and mitigate ongoing issues.
As specialist commercial recoveries and insolvency solicitors, and members of R3, JCP Solicitors can advise businesses on recovering outstanding liabilities as well as the corporate insolvency framework and procedures. We can provide expert legal advice and guidance regardless of whether you are struggling to recover your debts or pay them as they fall due.
If you would like legal advice on a debt recovery or insolvency matter, JCP Solicitors can help. Contact our expert team by calling 0333 208644 or emailing hello@jcpsolicitors.co.uk.