Many businesses that work with local authorities are facing a 'postcode lottery' to determine whether their accounts are settled on time, or whether they must deal with late payments from their council customers, says the Forum of Private Business.

The claim is significant because, back in 2008, the government called for councils to pay their suppliers' invoices in no more than ten days - a way to keep small businesses' cashflow healthy, as well as to ensure liquidity within the wider economy as a whole.

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Following on from the news that UK PLC's are sitting on a staggering £64 billion excess of capital the latest figures from Bacs Payment Schemes show overdue payments to UK SMEs are now at a record breaking all-time high of £35.3 billion.

The data was compiled at the end of 2011, and showed a £2 billion increase in late payments in the space of just six months.

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Late payments to creditors by UK PLC’s are being used to add to the working capital companies have at their disposal, according to a new report from Deloitte.

The professional services provider has analysed the working capital performance of 20,800 companies with global operations over the past five years, enabling it to compile a £64 billion estimate of excess working capital in the UK - a rise of £3 billion since 2010.

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Local authority late payments are almost as much of a problem now as when, in 2008, the government first introduced a ten-day target for settling its invoices in the regions, reports the Forum of Private Business.

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A headline-grabbing report from the Forum of Private Business and Graydon reveals that formal credit control processes are in place at fewer than half of the UK's small businesses.

The survey looked at 500 companies across the UK, and just 44% said they had formal credit control procedures to fall back on if they are not paid promptly by debtors.  However, many others admitted to making use of a spur-of-the-moment approach to payments, with 16% juggling payments as they go along and 38% mixing formal credit control processes with informal payment-chasing.

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We always say that a sensible approach to invoicing can help to cut down on the number of problems you face - and that's still true. Chasing up invoices, making sure they've been received by the client, and querying any payments as soon as they become overdue can all help to encourage clients to pay up on time.

But when an invoice goes unpaid, it's easy to find yourself becoming more and more lenient in the hope that your client will eventually pay - while they become less and less reasonable in their reasons for delaying.

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Many SMEs are aware of the importance of a 'level playing field' when it comes to prompt payments - including the right to be paid on time by big brands, without them using their clout to negotiate longer terms, or their complexity as an excuse for failing to pay at all.

But when you start trading across borders, things can very quickly become even more complicated, because in other countries, even small business clients might be used to significantly different payment terms than they would be in the UK.

Ireland has announced the wording of its Code of Conduct on Prompt Payments, a voluntary charter similar to that in place in the UK.

Small business minister John Perry announced the Code on July 1st; it is supported by the Department of Jobs, Enterprise and Innovation.

Daring to speak out about late payment on Twitter could cost one woman £120,000 in fines and legal costs - all because of an unpaid £146 invoice.

The BBC reports that 55-year-old Lesley Kemp of Milton Keynes carried out £146 of transcription work for a company based in Qatar.

But when Resolution Productions paid her late - and expected her to cover the cost of their own £25 bank charges - Ms Kemp vented her frustrations on Twitter.

Many small businesses are caught out when clients refuse to pay their invoices. For a small startup, a handful of unpaid invoices can make the difference between a healthy bank balance and a full-on cash flow crisis.

When your non-paying client is located outside of the UK, unpaid invoices become even more of a headache. Chasing the debt yourself might be expensive, impractical and fruitless. If you’ve researched debt collection online, you’ll probably have noticed that there’s plenty of self-help when your client is in the UK - but if they’re overseas, there’s very little official advice on what you should do.