GlossaryAccounting & Bookkeeping
Dunning
Also called: dunning process, payment chasing
What is Dunning?
Dunning is the structured process of chasing overdue invoices — a defined sequence of reminders, statements and escalations triggered by how far past due an account is, rather than by when someone remembers.
A dunning ladder for a small business
- 7 days overdue — automated reminder
- 30 days — account statement sent
- 45 days — phone call from a named person
- 60 days — formal notice
- 90 days — credit hold and a recovery decision
Why it works
The point is that it runs on a schedule, so collections do not depend on the owner's mood or availability. Businesses that dun consistently typically pull days sales outstanding down by several days, which is usually cheaper than any financing they could arrange instead.
Frequently asked questions
Consistent, polite and predictable chasing tends to protect relationships. What damages them is silence followed by an angry call at 90 days.