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
Start with dated reminders, then a formal letter of demand. If the client is in Lagos and the debt is a fixed sum of up to ₦5,000,000, the Lagos Small Claims Court practice direction (2023) provides a demand form giving 14 days, then a complaint, with a target of judgment within 60 days of filing. Edo State has a similar court. Larger or disputed claims usually need a Nigerian lawyer.
First, find out why
Late payment from a Nigerian client is not always refusal. Common causes are a missing purchase order, a withholding tax question, foreign currency the client cannot easily buy, or a finance team that never received the invoice. One call to the person who commissioned the work often resolves more than three emails to a general inbox.
The escalation ladder
- Friendly reminder on the due date, with the invoice attached again.
- Second reminder after 7 to 14 days, copying the finance contact, asking for a payment date.
- Call or video meeting to agree a date or a plan, confirmed by email afterwards.
- Formal letter of demand: amount, invoice references, the work delivered, a final date, and what you will do next.
- Court or other legal steps in Nigeria, through a lawyer if the amount justifies it.
Keep everything in writing. A clear trail of delivered work, accepted invoices and unanswered reminders is the evidence any court will want.
Lagos: the Small Claims Court
Lagos State has small claims courts under a Practice Direction that took effect on 28 April 2023. The copy we read sets out:
- Claims covered
- A liquidated money demand of not more than ₦5,000,000, excluding interest and costs
- Where
- Designated Magistrates' Courts; the claimant or defendant must reside or carry on business in Lagos, or the cause of action must have arisen there
- First step
- A letter of demand on Form SCA 1, giving 14 days to pay
- Filing
- A complaint on Form SCA 2 with supporting documents such as contracts and receipts
- Timetable
- Defence within 6 days of service; settlement within 7 days; hearing within 30 days; judgment within 14 days; filing to judgment within 60 days
- Fees
- The direction refers to appropriate filing fees but does not state amounts
For an Irish freelancer, the relevant link is that the defendant carries on business in Lagos. Whether you can file without someone acting for you in Lagos, and how the court deals with a claimant abroad, are practical points to confirm with the court registry or a Lagos lawyer before you start.
Edo State's small claims practice direction, in force since 2 March 2020, also covers claims up to ₦5,000,000 with a 60-day target. For clients in other states, check whether that state has its own small claims procedure.
A worked example
Example. Bisi, a Dublin-based copywriter, is owed ₦3,200,000 by an Ikeja agency for a completed campaign. Two reminders go unanswered. She sends Form SCA 1 giving 14 days. On day 15, with no payment, a Lagos lawyer files Form SCA 2 on her behalf with the contract, delivery emails and invoices. Her claim is under ₦5,000,000, so it fits the small claims route. Had the invoice been in euro, the claim would need a naira figure; agree with the lawyer which rate and date to use.
Above ₦5 million, or disputed
- A larger claim, or one where the client says the work was defective, generally goes to the regular courts or to whatever dispute route your contract sets, such as arbitration.
- Your contract's governing-law and jurisdiction clauses matter here; see which law applies to your contract.
- Weigh the cost of a lawyer and the time involved against the sum owed. A negotiated payment plan is often worth more than a judgment you must then enforce.
The Irish tax angle
You will usually have already reported the invoice as income. Section 81(2)(i) of the Taxes Consolidation Act 1997 disallows deductions for debts "except bad debts proved to be such to the satisfaction of the inspector". If the debt becomes truly bad, keep the evidence of your efforts: reminders, demand letter, any legal advice. It supports a bad-debt deduction.
Preventing it next time
- Take a deposit before starting, especially with new clients.
- Invoice in stages tied to milestones.
- Agree currency, payment method and WHT treatment in the contract; see invoicing a Nigerian client.
- Pause work when an invoice is overdue beyond an agreed number of days.
What to put in the letter of demand
- The client's registered name and address, and the person responsible.
- Each unpaid invoice: number, date, amount and currency.
- A short account of the work delivered and when it was accepted.
- The total owed and the date by which it must be paid; 14 days matches the Lagos Form SCA 1.
- What you will do if it is not paid, stated plainly and without threats you do not intend to carry out.
Where Pryme fits
A Pryme Business Account gives you naira account details, which can remove one excuse for not paying: the client pays in naira locally. The Finance agent can prepare reminders and an aged list of what is owed, for you to approve before anything is sent. See Finance agent and business multicurrency.
Questions people ask
Can I sue a Nigerian client from Ireland?
Yes, through the Nigerian courts, usually with a Nigerian lawyer. In Lagos, small fixed-sum debts up to ₦5,000,000 can go to the Small Claims Court.
What is the first step in the Lagos Small Claims Court?
A letter of demand on Form SCA 1, giving the debtor 14 days, under the 2023 Practice Direction.
How long does a Lagos small claim take?
The Practice Direction targets judgment within 60 days of filing.
Can I deduct an unpaid invoice from my Irish tax?
Section 81 TCA 1997 allows a deduction for bad debts proved to the satisfaction of the inspector. Keep evidence of your collection efforts.
Sources
- Lagos State Practice Direction on Small Claims Court 2023 · accessed Oct 2026
- Edo State Small Claims Court Practice Directions (in force 2 Mar 2020) · accessed Oct 2026
- Taxes Consolidation Act 1997, section 81: General rule as to deductions (Irish Statute Book) · 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.