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
There is no legal rule: the deposit is a commercial choice, set higher for new clients, short jobs or work with large upfront costs, and lower for trusted repeat clients. Write it into the proposal as a condition: work starts when the deposit is received in full. State the currency, the due date, what the deposit covers, whether it is refundable, and that Nigerian withholding tax, if deducted, is shown on the client's receipt.
Working for Nigerian clients from abroad means you are far from any court that would hear a dispute, and chasing an unpaid invoice across borders is slow. A deposit is your most effective protection: it tests the client's commitment, funds your early work and limits how much you can lose. There is no legal rule on how much to ask; it is a commercial choice. This guide gives a way to decide, wording you can adapt, and the tax point that catches many freelancers.
How much to ask for
| Situation | Example deposit range | Reason |
|---|---|---|
| New client, no history | 40% to 50% | Highest risk of non-payment |
| Short job, under a month | 50% to 100% | Little time to recover if unpaid |
| Repeat client with a good record | 20% to 30% | Trust earned |
| Large upfront costs (travel, licences, crew) | Costs plus a share of fees | You should not fund the client |
| Long project with milestones | First milestone paid upfront | See milestone structures |
These ranges are labelled examples, not rules or market data. Adjust for the client's size, how they found you and how much of the work is front-loaded. For longer projects, combine the deposit with staged payments; see milestone payments on Nigerian tech projects.
Wording for the proposal
Put the deposit in the price section, not in the small print. A version you can adapt:
- Say "received in full", so a partial payment does not start the clock.
- State the currency and the account details on the deposit invoice.
- Say whether the deposit is refundable, partly refundable or retained on cancellation.
- Link start date and delivery dates to the deposit date, not the proposal date.
Cancellation terms sit naturally beside the deposit; see kill fee clauses.
Withholding tax and the deposit
Nigerian companies deduct withholding tax from payments to suppliers, and BusinessDay's July 2024 explainer on the 2024 regulations notes that the obligation arises on the earlier of payment or settlement, so expect it on the deposit, not just on the final invoice. PwC's summary (reviewed 29 May 2026) gives 10% for professional and consultancy fees paid to non-residents.
Example only. Your fee is $6,000 and the deposit 40%, so the deposit invoice is $2,400. If the client deducts 10%, you receive $2,160 and should get a receipt for $240. If you agreed a net fee instead, the client must pay $2,400 ÷ 0.9 ≈ $2,666.67 for you to receive $2,400. Settle which before the proposal is signed. The 2024 regulations, summarised by Danol Partners, list what the receipt should show: your name, address and Tax ID, the nature of the payment, the gross amount and the amount deducted.
Explaining the deposit to a Nigerian client
Most established Nigerian businesses are used to paying deposits to suppliers, but some first-time clients, especially individuals and small startups, push back. Explain it in terms of their benefit: the deposit reserves your time from a fixed date, and it is credited against the final invoice, so it is not an extra cost. Offer a smaller first deliverable if the client is nervous, such as a paid discovery week, which lets both sides test the relationship before committing to the full fee.
Large companies may need the deposit to go through vendor onboarding and a purchase order before they can pay anything. Ask at proposal stage how long that takes, and set the start date from when the deposit is received rather than from when the purchase order is raised. If the client needs a proforma invoice for internal approval, send one marked clearly as proforma, followed by the actual invoice.
Currency and receipts
Issue the deposit invoice in the currency agreed for the whole project, and say on it that the amount will be credited against the final invoice. When the deposit arrives, send a receipt; when the final invoice goes out, show the deposit as a line deducted from the total. This keeps both sets of books aligned, which matters when the client's auditors later match your invoices against its withholding tax receipts.
If the deposit does not arrive
- Do not start work, even if the client says the payment is "on the way".
- Send a short reminder with the invoice attached and the new start date.
- If the client's finance process needs vendor onboarding first, complete it promptly; see vendor onboarding documents.
- If the delay continues, release the time you reserved and tell the client in writing.
Where Pryme fits
Send the deposit invoice from Pryme invoicing with local account details for the currency the client pays in. The Finance agent prepares reminder drafts for unpaid invoices and nothing is sent until you approve. See business multicurrency accounts.
Questions people ask
How much deposit should I ask a Nigerian client for?
There is no rule. Set it by risk: more for new clients, short jobs and upfront costs, less for repeat clients with a good record. The ranges in the table are examples.
Should I start work before the deposit clears?
No. Write "received in full" into the proposal and start the day after.
Will a Nigerian company deduct tax from my deposit?
Usually yes. The obligation arises on payment, and PwC gives 10% for professional fees paid to non-residents. Ask for the receipt.
Is a deposit refundable if the client cancels?
Only if your contract says so. State it clearly in the proposal.
Sources
- BusinessDay: Nigeria's withholding tax reforms, key changes and implications (11 Jul 2024) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, corporate withholding taxes (reviewed 29 May 2026) · accessed Oct 2026
- Mondaq (Danol Partners): Overview of the Deduction of Tax at Source (Withholding) Regulations 2024 (16 Oct 2024) · 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.