dunning

Dunning is the systematic process of communicating with customers to prompt payment of overdue invoices. In business and accounting, it encompasses both the notices sent to debtors and the overall procedure used to pursue delinquent accounts. The term is commonly used in finance, receivables management, and credit control.

The dunning process typically follows a structured cycle. It starts with a gentle reminder after a payment due date passes, followed by more assertive notices at set intervals. Messages usually include the invoice number, due date, current balance, and payment options. Some systems label steps as first, second, and third reminders, or as soft, firm, and final notices. Escalation may involve different channels, such as email, mail, or phone contact, and may trigger late-fee assessments according to company policy or contract terms.

Modern dunning is often automated through accounting or enterprise resource planning software. Automation helps standardize tone, tracking, and reporting, while allowing human review for disputes. Compliance considerations include privacy, fair debt collection laws, and avoiding harassment or misleading statements. Records of communications, promised payment dates, and agreed settlements are maintained for audit and credit risk management.

The term dunning is also used as a surname and in historical contexts unrelated to debt collection. It is not to be confused with the Dunning-Kruger effect, which describes a cognitive bias in knowledge assessment.