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
Working capital is current assets minus current liabilities: cash, stock and money customers owe you, less what you owe suppliers and other short-term bills. A practical estimate of how much you need is your daily cost of goods multiplied by your cash conversion cycle, the days between paying for stock and collecting cash from its sale. Shorten that cycle first, through faster collection, leaner stock and longer supplier terms, before borrowing to fund it.
The formula
Working capital = current assets − current liabilities. Current means due or expected to turn into cash within a year.
| Example only | ₦ |
|---|---|
| Cash and bank | 1,200,000 |
| Stock, at cost | 4,500,000 |
| Money owed by customers | 2,300,000 |
| Current assets | 8,000,000 |
| Owed to suppliers | 3,100,000 |
| Wages, tax and other bills due | 900,000 |
| Current liabilities | 4,000,000 |
| Working capital | 4,000,000 |
The current ratio here is ₦8,000,000 ÷ ₦4,000,000 = 2.0. A positive figure means short-term assets cover short-term bills, but most of it is stock and customer debts, not cash. Stock is valued at cost under IAS 2, at the lower of cost and net realisable value, so damaged or slow stock should be written down before you rely on it.
How much you need: the cycle method
The cash conversion cycle counts how long your money is tied up.
- Stock days
- Stock ÷ daily cost of goods sold.
- Customer days
- Money owed by customers ÷ daily sales.
- Supplier days
- Owed to suppliers ÷ daily cost of goods sold.
- Cycle
- Stock days + customer days − supplier days.
Example only, continuing the figures above, with annual cost of goods sold of ₦36,000,000 (₦100,000 a day on a 360-day year) and annual sales of ₦46,800,000 (₦130,000 a day).
- Stock days: ₦4,500,000 ÷ ₦100,000 = 45 days.
- Customer days: ₦2,300,000 ÷ ₦130,000 = 17.7, about 18 days.
- Supplier days: ₦3,100,000 ÷ ₦100,000 = 31 days.
- Cycle: 45 + 18 − 31 = 32 days.
Cash needed to fund the cycle is roughly 32 × ₦100,000 = ₦3,200,000. The balance-sheet figure for stock plus customer debts less supplier debts is ₦4,500,000 + ₦2,300,000 − ₦3,100,000 = ₦3,700,000; it is higher because customer debts include your margin. Either way, add a month of running costs, rent and wages, on top. See the cash conversion cycle explained.
What pushes the need up
- Growth. More sales mean more stock and more customer debts before the cash arrives. Growing faster than your cash allows is called overtrading; see growing too fast for your cash.
- Inflation. Each restock costs more. NBS put headline inflation at 14.63% year on year in September 2026, so the same shelf of stock needs more naira than a year earlier.
- Seasonal stock builds before festive peaks.
- Generous credit to customers, or slow-paying corporate and government clients.
- Cash handling. Under CBN rules reported in December 2025, corporate customers can withdraw ₦5 million a week in cash before a 5% charge applies, so a business that pays suppliers in cash needs to plan withdrawals or move to transfers.
Funding the gap without expensive credit
- Collect faster. Invoice the day you deliver, take deposits on large orders, follow up on the due date. In the example, collecting 7 days sooner frees 7 × ₦130,000 = ₦910,000.
- Hold less stock. Clear dead stock and use reorder levels. Cutting stock days from 45 to 35 frees 10 × ₦100,000 = ₦1,000,000.
- Agree longer supplier terms, in return for regular orders or prompt payment on the agreed date.
- Keep profit in the business. Set drawings or dividends at a level that leaves enough to fund the cycle.
- Add owner capital if the business is growing profitably and the gap is permanent.
- Borrow last, and for the right term: short-term finance for short-term needs, with the total cost compared in APR terms; see APR vs flat fee.
Together, steps 1 and 2 in the example free ₦1,910,000, more than half of the ₦3,200,000 the cycle needs, without any interest.
Signs of a working capital squeeze
- You are profitable on paper but struggle to pay suppliers on time.
- You turn down large orders because you cannot buy the stock for them.
- Salaries are paid late or from the owner's personal money.
- Customer debts older than 60 days are growing as a share of the total.
- You use expensive short-term loans to pay routine bills, then again to repay those loans.
- Shelves are full of slow lines while fast sellers run out.
Any two of these together are a reason to recalculate the cycle and act on collections and stock before the next big purchase.
Check it monthly
Work out stock days, customer days and supplier days at each month end from your balance sheet and P&L. A cycle that lengthens month after month warns of a cash squeeze before the bank balance shows it. AI tools can help with collections; see AI for accounts receivable.
Where Pryme fits
Sending invoices from a Pryme Business Account on the day you deliver starts the collection clock early, and the Finance agent can prepare a list of overdue customers and draft reminders for you to approve.
Questions people ask
How do I calculate working capital?
Subtract current liabilities (suppliers, wages and tax due, other short-term bills) from current assets (cash, stock at cost and money customers owe you).
How much working capital does a small business need?
Roughly your daily cost of goods multiplied by your cash conversion cycle in days, plus about a month of running costs. Work it out from your own figures.
What is a good working capital ratio?
Many lenders look for current assets above current liabilities, but a high ratio full of slow stock or old customer debts is weaker than it looks. Focus on how quickly assets turn into cash.
How can I increase working capital without a loan?
Collect from customers faster, take deposits, hold less stock, agree longer supplier terms and leave more profit in the business.
Sources
- IFRS Foundation: IAS 2 Inventories (2024 issued standards) · accessed Oct 2026
- Voice of Nigeria: Nigeria's headline inflation drops to 14.63 per cent (NBS CPI September 2026, 16 Oct 2026) · accessed Oct 2026
- Daily Trust: CBN ends cash deposit limits, raises weekly withdrawals (3 Dec 2025) · 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.