Late payment pressures rise for Wales 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 475,000 late payments in the region in Q1 2026, an increase of 3% compared to the same period last year when there were 462,000 late payments. There were also around 57,000 companies with overdue invoices on their books in Q1 2026, a slight increase on Q1 2025 when there were 56,000 companies affected.
Meanwhile, in positive news, quarterly insolvency‑related activity in the region – including administration and voluntary and compulsory liquidations – decreased by 14% to 212 cases, compared to the Q1 2025 when there were 246 cases. However, there was a 24% rise in activity compared to the final quarter of 2025 which saw 171 cases.
Bethan Evans, Chair of R3 in the South West and partner at Menzies LLP 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.”
The number of overdue invoices nationally in Q1 2026 rose to 17.48 million, up 3% on the same period last year, with the West Midlands recording the highest number (3.05 million), followed by Greater London (2.91 million) and Scotland (2 million).
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. The new Small Business Protections (Late Payments Bill) will impose maximum payment terms of 60 days, enforce interest for late payments and give the Small Business Commissioner new powers, including the ability to fine businesses that persistently pay their suppliers late.
