To manage trade receivables in Nigeria, set credit limits by customer, age every invoice monthly, and track cash collected, not just sales booked. Q1 2026 results show why. Ten listed consumer goods companies grew combined profit 19.6% while their trade receivables rose 21.7% to ₦515.3 billion, according to BusinessDay.
Profit that sits in a customer's account is not cash. Here is what the numbers show and how to protect your own working capital.
What did Q1 2026 results show about receivables?
BusinessDay reviewed ten consumer goods companies on 9 May 2026. Combined profit rose to ₦307.5 billion from ₦255.2 billion. Revenue barely moved, at ₦1.78 trillion against ₦1.76 trillion. Trade receivables climbed to ₦515.3 billion from ₦423.4 billion.
Company by company, the gap between profit and cash was wide:
- Nestlé Nigeria: profit rose to ₦38.9 billion, but operating cash flow fell to ₦56.8 billion from ₦114.3 billion. Receivables went from ₦5.4 billion to ₦26.9 billion.
- BUA Foods: profit rose to ₦142.3 billion, while operating cash flow dropped to ₦8.4 billion from ₦29.1 billion. Receivables grew to ₦85.1 billion from ₦20.4 billion.
- NASCON Allied Industries: receivables rose to ₦60.2 billion from ₦17.8 billion, and operating cash flow fell 58%.
Not every company slipped. Dangote Sugar Refinery moved operating cash flow from negative ₦7.9 billion to positive ₦139.5 billion, and BusinessDay reported that it cut receivables significantly.
Why are Nigerian companies selling on credit?
Customers are squeezed. Headline inflation eased to 14.63% in September 2026 from 15.39% in August, according to the National Bureau of Statistics as reported by Tekedia. That is relief, but prices are still far above what most buyers budgeted for. BusinessDay cited a BCG survey in which 83% of households were cutting discretionary spending.
Distributors respond by asking for longer payment terms. Suppliers agree to protect volumes. The sale is booked, the profit appears, and the cash arrives late or not at all.
How do late payments hurt your working capital?
Every extra day of credit is a day you fund your customer. With a policy rate of 23% after the September cut, according to Nairametrics, that funding is not cheap. If you borrow to cover the gap, a 60-day delay on a ₦100 million invoice costs about ₦3.8 million in interest at 23% a year (₦100 million x 23% x 60/365).
Late payment also raises audit risk. Auditors test whether old balances are recoverable. If you have not provided for them, expect an adjustment that lowers profit after the books are closed.
How do you control trade receivables? A five-step plan
1. Set a credit limit per customer. Base it on payment history and size, and get a director to approve any exceptions.
2. Age your invoices every month. Group balances into current, 1 to 30 days late, 31 to 60, 61 to 90 and over 90. Review the over 60 bucket with the sales head.
3. Track days sales outstanding. Divide receivables by revenue and multiply by the days in the period. Set a target and report it next to profit.
4. Link sales incentives to collection. Pay commission when cash arrives, not when the invoice is raised.
5. Provide for losses under IFRS 9. Use a provision matrix that applies historical loss rates by age band, adjusted for current conditions.
If cash is still tight, factoring is an option. We covered the proposed law in our note on Nigeria's Receivables Financing Bill and the lender side in our guide to cash-flow lending.
What this means for your business
Before you sign off Q4 numbers, ask your finance team for three figures: receivables aged over 60 days, days sales outstanding compared with last year, and the provision held against old balances. If receivables are growing faster than revenue, find out why this month, not at year end.
Companies that collect well in a tight market borrow less and give their auditors fewer reasons to adjust profit.
FAQ
What is a good days sales outstanding figure in Nigeria?
There is no single benchmark. It depends on your sector and your agreed terms. A useful rule is that actual days should sit within about 10 days of the terms you offer, and the trend should be flat or falling.
Do I have to provide for doubtful receivables?
Yes, if you report under IFRS. IFRS 9 requires an expected credit loss allowance on trade receivables from day one, not only when a customer defaults. Most companies use a provision matrix based on ageing.
Is a bad debt tax deductible in Nigeria?
Generally, a debt is deductible only when it is actually bad or doubtful and you can show you tried to collect it. A general provision is usually not enough. Keep written evidence of your recovery steps and confirm treatment with your tax adviser before you claim.
Need help with credit control policies, IFRS 9 provisioning or a receivables review before year end? Contact VOG Global at vog.global. We will review your debtors book and help you protect your cash.
Sources: BusinessDay (Q1 2026 consumer goods results, 9 May 2026), Tekedia reporting National Bureau of Statistics (September 2026 inflation), Nairametrics (CBN policy rate, 22 September 2026), IFRS 9 Financial Instruments.