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.
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.
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.
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.