AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
Imported Nigerian stock should sit in your books at landed cost: what you paid the supplier, plus the transport and other charges to get it to you. IRS Publication 538 defines the cost of purchased goods as the invoice price minus discounts plus transportation or other charges incurred in acquiring them. You then expense that cost as the goods sell, using a consistent method such as FIFO or specific identification.
Why landed cost matters
If you buy aso oke, shea butter, crayfish or carvings in Lagos and sell them in the US, the supplier's price is only the start. Freight, customs duty, broker fees and the cost of converting dollars to naira all sit between the market in Nigeria and your shelf. Put them in inventory and your profit per item is right. Expense them as they occur and your margins swing from month to month and your stock value is understated.
What goes into the cost
Publication 538 (Rev. January 2022) says the cost of merchandise purchased during the year is the "invoice price minus appropriate discounts plus transportation or other charges incurred in acquiring the goods". In practice, for a shipment from Nigeria, that points to:
| Cost | Usually in inventory? | Note |
|---|---|---|
| Supplier invoice, net of discounts | Yes | Translate to USD at the rate when you paid or accrued it |
| Inbound freight and air cargo to the US | Yes | Transportation to acquire the goods |
| US customs duty and entry fees | Generally yes | A charge incurred in acquiring the goods; confirm with your preparer |
| Customs broker fee for the entry | Generally yes | Same reasoning |
| Nigerian export paperwork and local haulage to the airport | Yes | Part of getting the goods to you |
| Shipping to your customers | No | A selling expense |
| Storage after arrival, marketing | Usually no | Unless uniform capitalisation applies |
The IRS publication also notes that uniform capitalisation rules (section 263A) can add further costs to inventory for some businesses. Publication 538 describes a small business taxpayer exception for those with average annual gross receipts of $26 million or less (indexed for inflation) for the three prior tax years; that figure is as written in the 2022 revision and has been indexed since, so check the current figure in the instructions for your return.
Building landed cost: an example
Example only. Amaka imports 200 pieces of hand-woven aso oke for her New Jersey shop.
| Item | USD |
|---|---|
| Supplier invoice (paid in naira, translated at the rate on the day paid) | $4,000 |
| Air freight Lagos to Newark | $900 |
| Customs duty and entry fees | $480 |
| Customs broker | $220 |
| Local haulage and export paperwork in Lagos | $200 |
| Total landed cost | $5,800 |
| Landed cost per piece (÷ 200) | $29.00 |
Check: 4,000 + 900 + 480 + 220 + 200 = 5,800; 5,800 ÷ 200 = 29. If she sells 150 pieces this year, cost of goods sold is 150 × $29 = $4,350 and the 50 left are inventory at $1,450. The duty figure here is invented for the example; real duty depends on the tariff classification, so see duties on aso oke and lace.
Choosing a method
Publication 538 lists the ways to match cost to items sold:
- Specific identification
- Use when you can match the actual cost to each item, such as one-off carvings or paintings.
- FIFO
- Assumes the items bought first are sold first. Suits food items and anything that dates.
- LIFO
- Assumes the latest items are sold first. The IRS calls the rules complex and refers to sections 472 to 474.
- Lower of cost or market
- Compare market value of each item on the inventory date with its cost and use the lower.
For a mixed stock of Nigerian goods, many small importers use specific identification for high-value single pieces (art, carved furniture) and FIFO for everything else that is bought in batches, such as spices or soaps. Whatever you choose, write it down and apply it to every shipment.
Pick one and keep to it. Changing method is a change of accounting method and has its own IRS process.
Currency and records
The IRS says amounts on a US return must be in US dollars, using the exchange rate prevailing when you receive, pay or accrue the item (IRS foreign currency page, May 2026). For stock bought in naira, record the naira invoice, the date you paid and the rate you got, and keep the payment record with the invoice. If the rate moves between ordering and paying, the cost is what it cost on the day you paid. Our guide to FX gains and losses on naira balances covers balances held over time.
- Keep supplier invoices, airway bills or bills of lading, the customs entry summary and the broker's invoice for each shipment.
- Allocate shipment-level costs across items by quantity, weight or value, and use the same basis every time.
- Count stock at year end and reconcile the count to the books.
Where Pryme fits
A Pryme Business Account holds USD and NGN with local details, so you can pay a Lagos weaver in naira. Swap shows the rate and the fee before you approve, which gives you the rate to record against the invoice, and a verifiable receipt through VerifyDoc.ai backs the cost line.
Questions people ask
What is landed cost?
The full cost of getting goods to you: supplier price less discounts, plus freight, duty, broker fees and other charges to acquire them. It is the figure your inventory should carry.
Is customs duty part of inventory cost?
Generally yes. IRS Publication 538 includes transportation and other charges incurred in acquiring goods; duty paid on entry is such a charge. Confirm the treatment with your preparer.
Which exchange rate do I use for naira purchases?
The IRS says to use the rate prevailing when you pay or accrue the item, for a business whose functional currency is the dollar. Keep the record of the rate you got.
Do small businesses have to keep inventory?
Publication 538 describes a small business taxpayer exception based on average gross receipts (stated as $26 million, indexed, in the 2022 revision). Check the current figure and the method you then must use.
Sources
- IRS: Publication 538, Accounting periods and methods (Rev. January 2022) · accessed Oct 2026
- IRS: Foreign currency and currency exchange rates (reviewed 22 May 2026) · accessed Oct 2026
- IRS: Recordkeeping (reviewed 1 May 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.