What is dunning?

Dunning is a process that companies use to collect outstanding debts from customers. It involves sending reminders, notifications, and requests for payment to customers who have not paid their bills on time. The goal of dunning is to encourage customers to settle their debts and avoid the need for more aggressive collection actions.

Dunning typically involves a series of escalating communications, starting with friendly reminders and progressing to more assertive demands for payment. These communications may be sent via email, letter, or phone call, depending on the company's preferred methods of communication.

Dunning can be a time-consuming process for businesses, especially if they have a large number of outstanding invoices. However, it is an important part of maintaining healthy cash flow and ensuring that the company receives payment for its products or services.

Many companies use software or automated systems to manage their dunning process, making it easier to track outstanding debts, send reminders, and follow up with customers who have not paid. This can help businesses streamline their collections efforts and improve their chances of recovering overdue payments.