Unpaid invoices are a common challenge for companies trading with Nigerian buyers, especially in import/export, FMCG and wholesale distribution. For international suppliers, the combination of distance, different legal systems and complex logistics can make recovery feel daunting. Yet with the right structure and partners, it is possible to recover unpaid invoices in Nigeria while protecting commercial relationships.

Understanding why unpaid invoices happen in Nigeria

To recover unpaid invoices in Nigeria effectively, it helps to understand the underlying causes. Frequent reasons include:

• FX and liquidity constraints – Nigerian buyers may struggle to access foreign currency or experience cash flow gaps due to delayed customer payments.

• Documentation gaps – Incomplete contracts, unclear payment terms, or missing shipping documents (BL, commercial invoice, packing list, Form M, Pre-Arrival Assessment Report, etc.) can slow or block payment.

• Disputes over quality or quantity – Where inspection or acceptance procedures are not clearly defined, buyers may withhold payment.

• Weak internal controls – Smaller distributors and retailers may lack structured credit management and payment approval workflows.

A realistic recovery strategy accounts for these factors and aims to resolve issues commercially before escalating to formal debt collection or litigation.

Strengthen contracts to recover unpaid invoices in Nigeria

The most effective way to recover unpaid invoices in Nigeria is to reduce the risk before a shipment leaves the warehouse. Key contract and documentation points include:

• Clear payment terms – Specify currency, payment method, due dates, and any grace period. For higher-risk buyers, consider advance payment, letters of credit (LCs) or part-payment before shipment.

• Ownership and risk transfer – State when title passes and under which Incoterms the goods are sold. This can be critical if you need to suspend deliveries.

• Interest and late payment clauses – Include reasonable, enforceable interest on overdue amounts and recovery of legal or collection costs where local law permits.

• Dispute resolution – Decide whether disputes will be resolved in Nigerian courts, through arbitration (e.g., Lagos Court of Arbitration) or in another jurisdiction, and ensure this is workable for both parties.

• Governing law – Choose applicable law carefully, particularly where you have a mix of local Nigerian and foreign counterparties.

Wigmore Trading works with suppliers to ensure that contracts, commercial invoices and shipping documents are aligned, reducing ambiguity that often leads to payment delays or non-payment.

Credit control processes to reduce and recover unpaid invoices in Nigeria

Good credit management is essential when trading on open terms with Nigerian buyers. Practical steps include:

• Credit checks and KYC – Verify company registration, directors and trading history. Check trade references and payment behaviour with other suppliers.

• Credit limits and review cycles – Set realistic credit limits and regularly review exposure based on order volume and payment performance.

• Structured reminders – Implement a timeline of statements, friendly reminders and formal demand letters as soon as invoices become overdue.

• Blocking further shipments – Have a clear internal rule for placing accounts on hold until past-due invoices are settled.

• Using local expertise – Work with local partners who understand Nigerian business culture and can speak directly with debtors in-country.

As a regional distributor, Wigmore Trading can act as a credit and collection interface, helping suppliers monitor exposure, follow up overdue invoices and maintain professional dialogue with Nigerian customers.

Legal options to recover unpaid invoices in Nigeria

When internal efforts fail, you may need to escalate recovery of unpaid invoices in Nigeria through legal or quasi-legal channels. Common options include:

• Formal demand letters from Nigerian counsel – A letter of demand issued by a local law firm can signal seriousness and often triggers repayment or a negotiated settlement.

• Negotiated payment plans – Where buyers face temporary cash constraints, structured instalment plans with clear milestones may recover more than immediate litigation.

• Debt recovery actions in court – Creditors can sue for the unpaid amount, interest and agreed costs, subject to the terms of the contract and Nigerian civil procedure.

• Arbitration or mediation – If the contract includes an arbitration clause, claims may be resolved through local or international arbitration centres.

Choosing the right path depends on the size of the debt, the strength of your documentation, and whether you wish to preserve the commercial relationship. Professional advice from lawyers and experienced trade partners is essential before committing to litigation.

Using local partners to recover unpaid invoices in Nigeria

Distance and lack of local presence are major obstacles for overseas suppliers. A trusted partner on the ground can:

• Verify debtor status – Check whether the business is still trading, identify key decision-makers, and understand the real reason for non-payment.

• Engage in face-to-face negotiations – In Nigeria’s relationship-driven market, in-person conversations can unlock faster solutions than remote email follow-ups.

• Coordinate logistics holds – Where appropriate, suspend or re-route shipments to reduce further exposure while discussions continue.

• Support documentation and compliance – Ensure that all trade, customs and banking paperwork required for payment is complete and consistent.

Wigmore Trading combines regional logistics capability with local market knowledge, helping suppliers structure deals, manage risk and, where necessary, pursue overdue invoices in a structured way.

Practical steps to start recovering unpaid invoices in Nigeria

If you are currently dealing with unpaid invoices in Nigeria, a structured action plan can improve your chances of recovery:

1. Gather all documentation – Contracts, POs, invoices, delivery notes, proof of delivery, correspondence, and any quality/inspection reports.

2. Reconcile account balances – Confirm the outstanding amount with the debtor and identify any disputed lines early.

3. Escalate communication – Move from informal reminders to formal, dated communications, including a clear deadline for payment.

4. Assess leverage – Consider open orders, future business, local reputation and any security or guarantees in place.

5. Engage local support – Partner with a firm experienced in Nigerian trade, logistics and collections to advise on the most effective next steps.

6. Decide on legal escalation – For larger debts or repeated non-payment, take advice on issuing a demand letter or commencing legal or arbitral proceedings.

A balanced approach that combines commercial negotiation, sound documentation and local support generally delivers better results than relying on legal action alone.

Conclusion: turn unpaid invoices into controlled risk

Recovering unpaid invoices in Nigeria is not just a legal exercise; it is a strategic part of managing cross-border trade risk. By strengthening contracts, tightening credit control and using experienced local partners, suppliers can protect cash flow while still serving a growing Nigerian market.

Wigmore Trading can help monitor customer risk, manage documentation and support commercial or legal recovery efforts when invoices go unpaid, allowing you to stay focused on your core business.

Contact Wigmore Trading today to streamline your sourcing, distribution and recovery processes.