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
A distributor protects itself by giving each trade customer a written credit limit and payment term, then checking every new order against that limit and the customer's overdue balance before goods leave the warehouse. On a Pryme Business Account the Sales agent runs that check on each order and flags any that would breach the limit or that come from a customer with overdue invoices; a person decides whether to release, reduce or hold the order.
Why credit limits matter in distribution
Wholesale and distribution businesses in Nigeria often sell on credit to retailers, supermarkets and sub-distributors, because that is how the trade works. The margin is thin and the volumes are large, so one retailer who stops paying can wipe out a month's profit. A credit limit turns a vague relationship ("he is a good customer") into a number that sales staff, warehouse and owner all respect.
Setting the limit
There is no formula that suits every trade, but a sensible limit usually reflects:
- How long the customer has bought from you and how they have paid.
- Their typical monthly order and your payment term (for example, 14 or 30 days).
- What security you hold, such as a guarantor, a deposit or post-dated cheques.
- How much of your own working capital you can afford to have outstanding with one customer.
Write the limit and term into a short credit agreement signed by the customer. Review it every few months, and lower it as soon as payment patterns slip. See a credit sales policy for small businesses for a fuller template.
A note on post-dated cheques
Some distributors take post-dated cheques as security. Under the Dishonoured Cheques (Offences) Act, as published by PLAC, obtaining credit with a cheque that is dishonoured for lack of funds when presented within three months of its date can be an offence. That does not make a cheque a guarantee of payment; it is one tool, and legal steps cost time and money. This is information, not legal advice.
The order check, step by step
- Take the customer's current outstanding balance.
- Add the value of the new order.
- Compare the total with the credit limit.
- Check whether any invoice is past its due date, and by how long.
- Release the order if both tests pass; otherwise refer it to a person.
Worked example
Example only. A retailer has a ₦5,000,000 limit on 30-day terms. Outstanding balance ₦3,800,000, of which ₦900,000 is more than 30 days old. A new order comes in for ₦1,600,000.
- Outstanding plus new order
- ₦3,800,000 + ₦1,600,000 = ₦5,400,000
- Over the limit by
- ₦400,000
- Overdue balance
- ₦900,000
- Result
- Refer to a person
Sensible options: ask the retailer to clear the ₦900,000 overdue invoice first, which brings the total to ₦4,500,000 and inside the limit; or reduce the order to ₦1,200,000; or take part payment upfront. Raising the limit to fit the order is the option that most often leads to bad debt.
What the Sales agent does
Pryme Business Accounts include a Sales agent, built by Pryme Intelligence. For a distributor it acts as the order desk's checklist.
- Keeps each customer's limit and term as set by the business; it cannot change them.
- Checks every new order against the outstanding balance and the limit, and against overdue invoices.
- Releases nothing on its own judgement: orders that pass go to the warehouse queue under the rules you set; orders that fail are flagged with the numbers and suggested options.
- Drafts the message to the customer, for example asking for the overdue payment before dispatch.
- Records who approved any order over the limit, and when.
Above the ceiling the business sets, a named person must approve. That record matters: when a large debt goes bad, you can see whether it came from a limit breach someone agreed to.
When a good customer keeps hitting the limit
A retailer who pays on time but keeps reaching the limit is a growth signal, not a risk. Review the limit with evidence: six months of on-time payment, rising order values, and no disputes. Raise it in steps rather than all at once, and confirm the change in writing to the customer so they know the new figure and the same term still applies.
The opposite case matters more. A customer who used to pay in 20 days and now pays in 45 is telling you something about their own cash. Lower the limit or shorten the term early, while the relationship is still good, rather than after the first invoice goes 90 days overdue. A monthly aged-debtors review, sorted by days overdue, is the simplest way to see this coming; the aged debtors list template shows the layout.
Tax points that affect the balance
When a company customer pays, it may deduct withholding tax. PwC's summary of the 2024 WHT Regulations lists 2% on supply of goods where the supplier is not the manufacturer, with goods manufactured or produced by the supplier exempt. A distributor will often see that 2% gap; record it as WHT pending receipt, not as an unpaid balance, or the order check will wrongly treat the customer as owing. See tracking WHT deductions.
Where Pryme fits
If orders, invoices and payments run through a Pryme Business Account, the Sales agent sees the live balance for each retailer, so the credit check uses today's numbers rather than last week's spreadsheet. Retailers can pay into dedicated virtual accounts so payments match to the right customer; read how businesses use virtual accounts.
Questions people ask
How do I set a credit limit for my customers?
Base it on their payment history, typical monthly order, your payment term, any security you hold and how much you can afford to have outstanding. Put it in writing and review it regularly.
Should I supply a customer who owes me?
Check whether the debt is overdue and whether the new order keeps them within their limit. If not, ask for payment or reduce the order before dispatch.
Is a post-dated cheque a guarantee of payment in Nigeria?
No. The Dishonoured Cheques (Offences) Act can make a bounced cheque an offence, but recovery still takes time and cost.
Can the Sales agent raise a customer's credit limit?
No. Limits are set by the business. The agent checks orders against them and refers breaches to a person.
Sources
- PwC Nigeria: Highlights of the Deduction at Source (Withholding) Regulations 2024 (Jul 2024) · accessed Oct 2026
- PLAC Laws of Nigeria: Dishonoured Cheques (Offences) Act · 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.