Finance jargon makes simple things sound hard. Here are the terms you'll meet running a Nigerian company, each explained in a sentence or two.

Accounting and reports

Accrual accounting: Recording income when you invoice and expenses when you incur them, whether or not cash has moved. It shows true performance. Compare cash basis.

Aged payables: Your unpaid bills grouped by how overdue they are (coming due, 1–30, 31–60, 61–90, 90+ days).

Aged receivables: Unpaid client invoices grouped by how overdue they are. The 90+ days column is where bad debts start.

Balance sheet: A snapshot of what the company owns (assets), owes (liabilities) and the owners' stake (equity) on a given date.

Bill: An invoice you've received from a supplier and haven't paid yet.

Cash basis: Recording income and expenses only when money actually moves. Simple, but it can hide what you owe and are owed.

Cash flow: Money coming in and going out over a period. A profitable company can still run short of cash.

Chart of accounts: The list of categories (income, expense, asset, liability accounts) your books are organised into.

Cost of sales: Direct costs of delivering your work, such as freelancers, production and media. Subtract them from income to get gross profit.

Depreciation: Spreading the cost of equipment over its useful life, instead of treating it all as an expense on day one.

Gross profit: Income minus cost of sales.

Net profit: What's left after all expenses. Before tax, unless stated.

Profit and loss statement (P&L): Income minus expenses over a period. Also called the income statement. See P&L explained.

Reconciliation: Checking that your books match your bank statement and explaining any differences.

Retainer: A fixed monthly fee for ongoing services, usually billed in advance.

Tax

CIT (company income tax): Tax on a company's profit: 30% for companies that aren't small, 0% for small companies from 2026.

Development levy: A 4% levy on assessable profit for companies that aren't small, replacing four older levies from 2026.

E-invoicing (MBS): The NRS's Merchant-Buyer Solution, a mandatory electronic invoicing system being phased in from large to smaller taxpayers.

Input VAT: VAT you pay on business purchases. Since 2026 it's recoverable on services and fixed assets that relate to your taxable supplies.

NRS (Nigeria Revenue Service): The federal tax authority that replaced the FIRS. It collects CIT, VAT, the development levy and WHT on payments to companies.

NTA (Nigeria Tax Act 2025): The main tax law in force from 1 January 2026. See the NTA explained.

Output VAT: VAT you charge clients on your invoices.

Small company: Under the NTA, a company with turnover of ₦100m or less and fixed assets of ₦250m or less that doesn't provide professional services. It pays 0% CIT. See the small company exemption.

SIRS (State Internal Revenue Service): The state tax authority. It collects PAYE and WHT on payments to individuals.

Tax clearance certificate (TCC): Proof that a company is up to date with its taxes, often needed for government and large corporate contracts.

TIN (Tax Identification Number): Your company's tax ID. It belongs on every invoice.

VAT (value added tax): A 7.5% tax on most goods and services, filed monthly by the 21st. See VAT for service companies.

WHT (withholding tax): An advance tax deducted from payments, usually 5% on professional fees and 2% on supplies, and credited against the recipient's income tax. See withholding tax.

WHT credit note: Proof that WHT deducted from you was remitted. You need it to claim the credit.

Payroll

Gross pay: Total pay before deductions: basic, housing, transport and other allowances.

ITF: Industrial Training Fund: 1% of annual payroll for employers with 5+ staff or ₦50m+ turnover.

Net pay (take-home): Gross pay minus PAYE, pension and other deductions.

NHF: National Housing Fund: 2.5% of basic salary for registered employees.

NSITF: Nigeria Social Insurance Trust Fund: 1% of monthly payroll paid by employers for the Employee Compensation Scheme.

PAYE (pay as you earn): Income tax deducted from employees' salaries and remitted to the state by the 10th of the next month. See how to calculate PAYE.

Pension (contributory): 8% of pay from the employee and 10% from the employer, paid into the employee's retirement savings account.

PFA (pension fund administrator): The licensed company that manages an employee's pension savings.

Rent relief: From 2026, 20% of an employee's annual rent (up to ₦500,000) is deducted before PAYE is calculated.

RSA PIN: The unique number for an employee's Retirement Savings Account.

Getting paid

Deposit / mobilisation fee: A payment made before work starts, often 30–70% on projects. See mobilisation fees and deposits.

Milestone billing: Invoicing parts of a project when agreed deliverables are approved.

PO (purchase order) number: The client's internal reference for approving your work. Many companies won't pay an invoice without it.

Payment terms: How long a client has to pay, such as "net 30" (30 days from the invoice date).