R3 report: West Midlands businesses facing cashflow pressures from rise in overdue invoices

Late payment pressures are increasing for West Midlands businesses, with more than three million overdue invoices recorded in the region during the third quarter of 2026, according to R3’s latest Business Health report.

Monica Kapur, R3 Midlands chair | R3 Association of Business Recovery professionals

placeholder image — Monica Kapur, R3 Midlands chair | R3 Association of Business Recovery professionals

The report, based on Creditsafe data, found there were 3.04 million overdue invoices in the West Midlands in Q3 2026, a 10 per cent increase compared with the 2.75 million recorded in same period last year and 51% higher than the previous quarter.

Meanwhile, insolvency-related activity in the region fell by four per cent to 762 cases compared to 797 cases in Q3 2025, however the figure was up four per cent on the previous quarter.

R3 Midlands chair, Monica Kapur, a solicitor and director at Isadore Goldman, said:“The rise in overdue invoices is a real concern and shows the scale of the challenge facing businesses when it comes to getting paid on time.

“Late payments can have a significant impact on a company’s cashflow and its ability to pay staff, suppliers and other bills, particularly when businesses are already dealing with high operating and employment costs.

“It’s encouraging that insolvency-related activity in the West Midlands has fallen compared with this time last year, but that shouldn’t obscure the ongoing financial pressures businesses are facing ranging from higher energy and employment costs, to expensive borrowing and cautious consumer demand.

“Directors need to keep a close eye on cashflow and credit control. If customers are taking longer to pay, cash reserves are reducing or the business is struggling to meet its financial commitments, seeking professional advice from an R3 member as early as possible will give you more options for resolving the situation.”

Nationally, R3’s report found that overall insolvency-related activity remained broadly stable, with 6,939 cases in Q3 2026, similar to the same period last year when there were 6,912.

Construction remained the sector with the highest level of insolvency-related activity, while wholesale and retail overtook accommodation and food services to become the second most distressed sector, recording 953 insolvency-related activities during the quarter, an eight per cent rise on Q2 2026. Other sectors which saw insolvency activity increase included real estate, professional services and education.