What is dunning and how does it work for invoice collection?
What is dunning and how does it work for invoice collection?
Short answer
Dunning is the systematic process of sending escalating reminders to customers with overdue invoices — progressing from friendly reminders to formal demands over days or weeks until payment is received or the account is escalated.
Dunning is the structured sequence of contacts a business makes after an invoice goes unpaid. A typical sequence starts with a gentle email reminder shortly after the due date, moves to a firmer written notice at 14-30 days past due, adds a phone call or AI voice contact at 30-45 days, and ends in a final demand letter at 60-90 days before referral to collections or legal action. The word "dunning" comes from 17th-century English slang for persistently demanding payment.
The goal is to recover payment through progressively firmer but always professional contact, without damaging the customer relationship unnecessarily and without going to court too soon. A well-designed sequence accounts for the fact that many overdue invoices are forgotten, lost in email, or waiting on an internal approval. Earlier contacts catch those without escalation. Later contacts address customers who are genuinely unwilling or unable to pay.
Modern dunning goes beyond email. Voice contact (phone call or AI-assisted voice call) is significantly more effective than email at the 14-45 day stage, because it requires a real-time response and doesn't let the customer defer indefinitely. Syntharra automates the voice contact layer, placing calls at the optimal point in the follow-up sequence and logging outcomes back to your accounting system.