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
The IRS lets you use any recordkeeping system that clearly shows income and expenses, but every naira amount must be reported in dollars, and the IRS publishes no naira rate, so you must convert at a posted rate, generally the spot rate on the day you received or paid, and use it consistently. Keep invoices, bank or deposit records, withholding receipts and expense evidence for at least three years, six if income could be understated by more than 25%, and longer for property.
Being paid by a Lagos client in naira one month and a Chicago client in dollars the next produces two sets of records in two currencies. The IRS does not mind how you organise them, but it needs to be able to follow every figure on your Schedule C back to a document, in dollars. Here is what to keep and how. This is information, not tax advice.
What the IRS expects to see
The IRS page on what records to keep (reviewed 3 August 2026) lists supporting documents:
| For | Examples the IRS lists | Naira-specific additions |
|---|---|---|
| Income (gross receipts) | Deposit information, receipt books, invoices, Forms 1099-MISC | Nigerian bank statements, client payment advices, withholding tax receipts |
| Expenses | Cancelled cheques or other proof of payment, account statements, card receipts and statements, invoices | Naira receipts for spending in Nigeria; transfer receipts |
It adds that electronic records are acceptable and the same requirements apply to them as to paper.
Converting naira to dollars
The IRS yearly average exchange rate table (reviewed 17 September 2026) has no naira row. The IRS says it has no official rate and accepts any posted rate used consistently, and that you generally use the spot rate on the date the income was received, paid or accrued. To convert, divide the naira amount by the rate in naira per dollar.
- Pick a source you can show later. The CBN publishes official exchange rate data and monthly averages on its rates page.
- Use the same source all year and record the rate next to each transaction.
- For many small naira expenses, keep a note of how you converted them, such as the rate for each day.
- If you converted naira to dollars yourself, keep the conversion record: it shows the rate you actually got.
Worked example (illustration only)
- 10 March
- Client pays ₦3,000,000; example rate ₦1,500 per $; income $2,000.00
- 2 May
- Client pays ₦2,700,000 after 10% withholding on ₦3,000,000; example rate ₦1,450 per $; gross income ₦3,000,000 = $2,068.97; withholding ₦300,000 = $206.90
- 15 June
- Hotel in Abuja ₦180,000 for a client trip; example rate ₦1,440 per $; expense $125.00
- Record
- For each line: date, naira amount, rate, source, dollar amount, document
These rates are illustrations, not current figures. More on rate choice: converting naira invoices to USD for Schedule C.
How long to keep records
| Period | When it applies (IRS, reviewed 30 June 2026) |
|---|---|
| 3 years | General rule for income tax records |
| 6 years | If you do not report income you should report and it is more than 25% of gross income shown |
| 7 years | Claims for a loss from worthless securities or a bad debt deduction |
| Indefinitely | If you do not file a return or file a fraudulent one |
| 4 years | Employment tax records, after the tax is due or paid, whichever is later |
| Until the limitation period ends for the year you dispose of property | Property records, for depreciation and gain or loss |
A naira bad debt, for example a Nigerian client who never pays an invoice you had reported as income, sits in the seven-year category. The Nigerian side may have its own periods if you file there.
A simple system that works
- One business account per currency, used only for the business.
- A numbered invoice register, with currency, amount, and date paid.
- A monthly ledger with naira amount, rate, source and dollar figure for each line.
- A folder per year for withholding receipts from Nigerian clients.
- Receipts photographed the day you get them, especially naira cash receipts on trips.
- A short note of your rate policy, kept with the year's records.
Mistakes that cause trouble later
- Mixing family transfers and client income in one Nigerian account, so you cannot show which deposits were business income. Gifts from family are not business income, but you need records to prove which is which.
- Recording income net of withholding tax, then being unable to support the foreign tax credit.
- Switching rate sources mid-year because one gives a better figure. The IRS accepts a rate used consistently.
- Relying on a Nigerian bank app that no longer opens on a new phone. Download statements regularly.
- Keeping no record of a naira bad debt, so the deduction cannot be supported.
A short monthly routine prevents most of these: download each account's statement, match every deposit to an invoice or mark it as personal, record the rate for each naira line, and file the month's receipts. Twenty minutes a month is much less work than rebuilding a year from bank apps in April.
Where Pryme fits
A Pryme Business Account holds naira and dollars in separate balances, so each payment is recorded in the currency it arrived in, with dated statements. Any conversion through Swap shows the rate and fee before you approve, and the record keeps that rate. Verifiable statements through VerifyDoc.ai are on the receipts page, and invoicing keeps the register.
Questions people ask
What exchange rate should I use for naira income on my US return?
The IRS has no official naira rate. It accepts any posted rate used consistently, generally the spot rate on the day you received the income.
How long should a freelancer keep tax records?
Generally three years, six if income could be understated by more than 25%, seven for bad debts, and longer for property, per the IRS.
Are scanned receipts acceptable to the IRS?
Yes. The IRS says electronic records are acceptable and the same requirements apply as for paper.
Do I record the amount before or after Nigerian withholding tax?
Record the gross fee as income and the withholding separately, with the receipt.
Sources
- IRS: What kind of records should I keep (reviewed 3 Aug 2026) · accessed Oct 2026
- IRS: How long should I keep records? (reviewed 30 Jun 2026) · accessed Oct 2026
- IRS: Yearly average currency exchange rates (reviewed 17 Sep 2026) · accessed Oct 2026
- Central Bank of Nigeria: Monthly average exchange rates · 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.