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 software startup should recognise subscription revenue as the service is delivered, not when cash arrives, so an annual plan paid upfront is spread across twelve months. Keep dollar income in dollar records and convert to naira on the date of each transaction, and run payroll with PAYE converted at the CBN official rate for staff paid in foreign currency. Nigerian law requires records supporting your tax position to be kept for at least six years.
Why software is different
A shop sells a product and the sale is finished. A software company usually sells access over time, often billed in advance, sometimes in dollars, with most of its costs in salaries. If the books treat cash received as revenue, the company looks richer in the month annual plans renew and poorer the rest of the year, and investors who read the numbers will not trust them.
Revenue recognition: the IFRS 15 approach
IFRS 15, the standard on revenue from contracts with customers, sets five steps: identify the contract, identify the separate promises in it (performance obligations), set the price, split the price across the promises, and recognise revenue as each promise is met. The IFRS Foundation notes that services are typically recognised over time. For a subscription, that means month by month.
Worked example: an annual plan paid upfront
| Item | January | February to December (each month) |
|---|---|---|
| Cash received | ₦1,200,000 | ₦0 |
| Revenue recognised | ₦100,000 | ₦100,000 |
| Deferred revenue (liability) at month end | ₦1,100,000 | Falls by ₦100,000 each month to ₦0 |
If the same contract includes a one-off onboarding service worth ₦200,000 on its own and the subscription alone is worth ₦1,000,000, the price is split across both promises. Onboarding revenue is recognised when onboarding is done; the rest is spread over the year. Your accountant decides the exact treatment, but the bookkeeper must record contracts in enough detail (start date, term, items) for that to be possible.
Dollar income
Many Nigerian software companies bill some clients in dollars. Keep a separate ledger for each currency account, record each invoice and receipt in the original currency, and record the naira equivalent using the rate on the transaction date, noting the rate source. When you convert dollars to naira, record the conversion as a transfer between your own accounts, not as revenue, and record any difference between the booked rate and the rate you received as an exchange gain or loss.
Separately, check whether foreign clients' fees are export services for VAT. The Nigeria Tax Act 2025 zero-rates exported services (section 187, as summarised by Mondaq in May 2026), but the services must actually qualify. Our guide to billing SaaS customers in naira and dollars covers VAT and collection.
Payroll
Salaries are usually the largest cost. Run payroll every month with a payslip for each person, PAYE worked out on the 2026 bands (0 per cent on the first ₦800,000 a year, then 15 per cent on the next ₦2.2 million, rising to 25 per cent above ₦50 million, as DLA Piper Africa summarised in August 2026), and pension where you have three or more employees. DLA Piper notes that pay in foreign currency is converted at the CBN official rate at the time paid for PAYE. Contractors abroad are not on payroll; record them as supplier costs with their invoices.
If you have the Startup Act label, check what employee tax incentives apply to you; see getting the Startup Act label.
Grants, investors and project costs
If you raise money, investors will ask for monthly accounts and a cap table, and grant funders often require spending to be shown against a budget. Tag each cost with a project or grant code when you record it rather than trying to split costs months later. Record investor money as share capital or as a liability (for convertible notes or SAFEs) according to the signed documents, never as revenue. Keep the signed agreements with the books, since the accountant needs them to classify each receipt.
A simple monthly close
- Reconcile every bank and currency account to its statement.
- Post revenue recognised for the month from your subscription schedule, and update deferred revenue.
- Post payroll, PAYE and pension liabilities, and record when each was paid.
- Record software subscriptions, cloud hosting and other costs with invoices attached.
- Review receivables by customer and age.
- Produce a profit and loss, balance sheet and cash summary.
Section 31 of the Nigeria Tax Administration Act 2025 requires books and records sufficient to determine tax liability, kept in English for at least six years after the year of assessment. Companies file a self-assessment return every year whether or not tax is due, and PwC's summary (May 2026) puts the deadline at six months after the accounting year end. A company with turnover of ₦100 million or less and fixed assets of ₦250 million or less is a small company paying 0 per cent company income tax. For VAT, Forvis Mazars notes that professional service providers are excluded from the small business definition; check where your business sits for each tax. A chart of accounts with separate deferred revenue and currency accounts makes all of this easier.
Where Pryme fits
A Pryme Business Account holds naira, dollars, pounds and euros with local details for each, so dollar receipts stay in dollars until you choose to convert, and each currency has its own statement to reconcile. The Finance agent can prepare the month-end reconciliation for you to approve.
Questions people ask
How should a SaaS startup record annual subscriptions in Nigeria?
Record the cash as deferred revenue and recognise one twelfth as revenue each month as the service is delivered, in line with IFRS 15.
Which exchange rate do I use to record dollar income?
Use the rate on the transaction date and note its source. For PAYE on salaries paid in foreign currency, DLA Piper notes the CBN official rate at the time paid applies.
How long should a Nigerian startup keep its records?
At least six years after the year of assessment, in English, under section 31 of the Nigeria Tax Administration Act 2025.
Does a small tech startup pay company income tax?
A small company (turnover up to ₦100 million and fixed assets up to ₦250 million) pays 0 per cent. Professional service providers are excluded from the small business definition for VAT, so check your classification for each tax.
Sources
- IFRS 15 Revenue from Contracts with Customers (IFRS Foundation) · accessed Oct 2026
- Nigeria Tax Administration Act 2025 (gazette copy) · accessed Oct 2026
- FAQs on payroll taxes and employer liability (DLA Piper Africa) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria corporate tax administration · accessed Oct 2026
- Nigeria's tax reform in focus: 2025 NTA VAT key business changes (Forvis Mazars) · accessed Oct 2026
- Examination of the VAT provisions under the Nigeria Tax Act 2025 (Mondaq) · 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.