What is the dunning process?

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The dunning process is the structured sequence of communications sent to customers who have not paid invoices by their due date. It begins with gentle reminders before or on the due date and escalates through progressively firmer communications as the invoice ages — ultimately leading to formal collection action if payment is not received.

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A typical dunning sequence

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Pre-due date (T-7 days). Friendly payment reminder: invoice details, due date, payment methods.

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Due date (T+0). Payment due today reminder: invoice reference, amount, payment link.

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First overdue (T+7 days). Polite first overdue notice: note that payment has not been received, request immediate payment.

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Second overdue (T+14 days). Firmer reminder: flag that the account is overdue, note potential impact on credit terms.

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Third overdue (T+30 days). Senior escalation: communication from a senior contact, request for a call to discuss.

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Final notice (T+45–60 days). Formal demand: notice that the account will be referred to collections or legal action if payment is not received within a defined period.

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Why dunning automation matters

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Manual dunning — someone reviewing an aging report and drafting individual emails — is time-consuming and inconsistent. Automated dunning sends the right message at the right time for every overdue invoice, without requiring manual intervention for routine cases. Collectors focus their time on accounts that do not respond to automated sequences and require personal engagement.

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Related: Collections management · Accounts receivable (AR) · Order-to-Cash (O2C) · Days Sales Outstanding (DSO)