Wolverhampton City Council owes £6 million in unpaid bills to West Midland subcontractors after a backlog in a new computer system left thousands of invoices unsettled, it can be revealed today.
The council has not paid around 3,500 invoices charged to the authority, with some dating back as late as March.
One businessman told how he is owed £250,000 alone.
The council's £8.3 million Agresso computer system went live on April 1, with chiefs saying it would save millions in the long run.
It meant shutting down its 30-year-old 'mainframe' system for a week before the switchover, but has caused a backlog of thousands of unpaid invoices.
Council bosses today said they anticipated problems with the system, but admitted no warning was sent out to companies about the possible delays in payments.
Mark Taylor, assistant director finance, said: "It was inevitable there were going to be difficulties with an organisation of this size and there were likely to be disruptions but I don't think we could have done a better job.
"The companies we dealt with were aware of the change of system and most were savvy and knew there may be disruptions with invoices."
Mr Taylor added: "We delivered the system on budget and on time. We believe that April 1 was the correct time to introduce the system because it was cleaner and meant we had one financial year on one system as opposed to two."
The council says it deals with 160,000 invoices a year at a cost of around £360 million.
It averages 30,000 invoices per month which equates to £30 million.
Civic Centre bosses said that they would prioritise businesses who need payment the most.
Lisa Taylor, who is the hub manager at the council, said: "We have experienced delays in payments to some of our suppliers and we would like to apologise for that. We are very sorry for any impact it may have caused because our suppliers are very important to us. We have been in contact with them every day. We will look to pay those who require urgent payment as a priority. This will be considered by how much is owed and for how long they have been without payment."
Agresso is provided by London-based firm Agilisys, which is helping with the implementation of the system.
Wolverhampton City Council says that they will recoup the cost of Agresso within three years and make a £3.4 million saving for each year after, on the computer and back-office system.