AI agents for business finance: what they can and can't do
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The short answer
Start with documented reminders, offer a payment plan, then send a formal letter of demand. For a Lagos client owing up to ₦5,000,000, the Lagos Small Claims Court is the realistic route: a Form SCA 1 demand giving 14 days, then a complaint, with a 60-day target to judgment and virtual hearings allowed.
The work was delivered, the invoice went out, and the Nigerian client has gone quiet. From South Africa, chasing a debt in Lagos feels hard, but there is a sensible order to it, and Nigerian procedure has tools a freelancer can use without hiring a large firm. This guide sets out the steps from first reminder to court, and when each makes sense.
Step 1: firm, documented reminders
- On the due date, send a short reminder with the invoice attached.
- After seven days, send a second reminder naming the contract, the amount and the date, and ask when payment will be made.
- Call or send a voice note to the person who commissioned the work, then confirm in writing what they said.
- Escalate to the finance manager or a director. Many late payments are approvals stuck with one person.
Keep everything in writing. A later claim depends on showing that the work was accepted and that the debt is an agreed sum. Practical chasing tactics are covered in chasing a Nigerian client's late payment from abroad; this guide focuses on the formal steps.
Step 2: a payment plan or partial payment
If the client is short of cash rather than refusing, offer instalments with dates, confirmed in writing. A partial payment is also an admission that money is owed, which helps if you later go to court.
Step 3: a letter of demand
A letter of demand states the debt, the basis (contract and invoice), the deadline and what you will do if unpaid. In Lagos it is more than a formality: the Lagos State Practice Direction on the Small Claims Court (2023) requires a letter of demand in its Form SCA 1, giving the debtor 14 days to pay, before you can file a small claim. A demand from a Nigerian lawyer often gets a response a freelancer's emails do not.
Step 4: the Lagos Small Claims Court
For many freelance debts this is the realistic option. Under the Lagos Practice Direction (copy dated December 2025 on the Lagos MEPB site):
| Feature | What the Practice Direction says |
|---|---|
| Claim size | A liquidated money demand of up to ₦5,000,000, excluding interest and costs |
| Connection to Lagos | The claimant or defendant lives or does business in Lagos, or the cause arose there |
| Start | Letter of demand (Form SCA 1, 14 days), then a complaint (Form SCA 2) with the contract and invoices |
| Representation | Parties may represent themselves; companies through a secretary or principal officer |
| Speed | Filing to judgment within 60 days, as a target |
| Hearings | Virtual hearings are allowed |
| Fees | "Appropriate filing fees"; no amounts stated |
A client in Lagos with an unpaid invoice under ₦5 million fits this procedure. Virtual hearings help from South Africa, but you may still need someone in Lagos to file papers; budget for that.
Larger debts and other routes
- Above ₦5 million: the claim goes to the ordinary courts, with lawyers, longer timelines and higher costs. Weigh the amount against the likely cost and time.
- Arbitration or mediation: if your contract has an arbitration clause, that is the route. Nigeria's Arbitration and Mediation Act 2023 makes mediated settlements binding and enforceable. See arbitration with a Nigerian client.
- A South African judgment: to enforce it in Nigeria you would need to register it there. Global Legal Post's April 2026 guide says registration must generally happen within 12 months of judgment unless the court extends time, and lists refusal grounds such as lack of notice or jurisdiction. That is slower than suing in Lagos directly.
Is it worth it?
Example (illustrative only): an invoice of ₦1,500,000 is three months overdue. A lawyer's demand letter costs, say, ₦100,000; if that fails, a small claim adds filing fees and someone to file for you. If the client pays after the demand, the recovery is ₦1,400,000 net of the letter (1,500,000 - 100,000). Against a debtor that has stopped trading, even a judgment may not be collectable.
Prevent it next time
- Take a deposit before starting: see upfront deposits for Nigerian clients.
- Put late-payment interest in the contract: see late payment interest clauses.
- Bill in milestones and hold back final files until paid.
- Choose a governing law and forum you can use, such as Lagos courts for a Lagos client.
Check the client properly before the next job, too. Confirm the company's registered name and RC number on the CAC portal, make sure the contract is signed by someone with authority, and note the company's registered address, because that is where formal papers are served. A client that will not give these details before work starts is telling you something about how a dispute would go.
Where Pryme fits
Pryme invoicing keeps a dated record of each invoice and reminder, and the Finance agent can prepare reminders on schedule for you to approve; nothing is sent without your approval.
Questions people ask
How do I recover money from a Nigerian client?
Send documented reminders, then a letter of demand. For Lagos clients owing up to ₦5 million, the Lagos Small Claims Court offers a quicker route with self-representation allowed.
What is the limit for the Lagos Small Claims Court?
A liquidated money demand of up to ₦5,000,000, excluding interest and costs, under the 2023 Practice Direction.
Can I sue a Nigerian client from South Africa?
Yes. The Lagos procedure allows virtual hearings, but you may need someone in Lagos to file. A South African judgment must be registered in Nigeria to enforce it.
Is a letter of demand required before suing in Lagos?
For small claims, yes: Form SCA 1 must be served first, giving the debtor 14 days to pay.
Sources
- Lagos State Practice Direction on Small Claims Court 2023 (Lagos MEPB copy, Dec 2025) · accessed Oct 2026
- Global Legal Post (Streamsowers & Kohn): enforcement of judgments, Nigeria (11 Apr 2026) · accessed Oct 2026
- Mondaq: salient provisions of Nigeria's Arbitration and Mediation Act 2023 · 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.