Dunning Letter

What is a dunning letter?

A dunning letter is a written notice requesting payment of a past-due amount. Dunning letters escalate in tone through a series, from friendly reminders to formal demands. The term comes from the verb 'to dun,' meaning to make persistent demands for payment. Effective dunning sequences balance firmness with professionalism to preserve client relationships while pursuing payment.

Building a dunning sequence

A typical sequence includes four to six letters over 90 days. Day 7 past due: friendly reminder assuming oversight. Day 30: firmer reminder requesting immediate attention. Day 45: notice of pending late fees or service suspension. Day 60: demand with collection referral warning. Day 75: final notice before collection. Adjust timing and tone to your industry and client relationships.

Automating dunning

Accounting software can trigger dunning letters automatically based on aging. Automation ensures consistency and saves time. Review automated messages periodically to ensure appropriate tone. Exclude certain clients from automated sequences when personal handling is warranted. The goal is an efficient process, not robotic communication.