Dunning is the process of following up overdue or failed payments through a planned sequence of reminders and actions. In a UK finance team, it usually forms part of credit control. The term also appears in subscription software, where it can include payment retries and requests to update an expired card.
For a telecoms reseller collecting recurring service invoices and usage charges, that distinction helps when choosing software. A reminder sequence for unpaid invoices needs to account for disputes, promises to pay and customer circumstances. A failed-card workflow also needs information from the payment provider, including whether another collection attempt is appropriate.
Key Takeaways
- Dunning is the reminder and follow-up part of credit control.
- A useful process adapts to payments, disputes and agreed arrangements.
- Timings are a business policy decision, subject to the rules that apply to the customer and service.
- Payment retries and invoice reminders need to share the current account position.
What Is Dunning?
A dunning process sets out when to contact a customer about a payment, which channel to use and when a member of staff should review the account. Software can schedule routine reminders and record the outcome, giving the next person who handles the account the history they need.
A dunning letter is one of those reminders. It should identify the invoice, amount outstanding, due date and payment options, with a contact route for queries. Later correspondence can explain the next proposed action, provided that action is appropriate and authorised.
Dunning appears frequently in billing software and technical documentation. In customer correspondence, a subject such as “Payment reminder for invoice 1234” is more informative than an internal process label. Our credit control feature uses both terms to make the connection clear.
What a Dunning Process Looks Like
Consider a business invoice with 30-day payment terms. The following is an illustrative process, not a legal timetable or a recommended policy for every customer:
| Point in the process | Purpose of the contact |
|---|---|
| Before the due date, if useful | Confirm the invoice and payment arrangements |
| Shortly after the due date | Remind the customer of the outstanding amount and check for a query |
| Still unpaid after the first reminder | Request a payment date and identify the reason for the delay |
| Further follow-up | Assign a call or review to someone who can agree the next step |
| Continued non-payment | Review the evidence, customer circumstances and permitted escalation options |
The sequence should change when the facts change. A recorded payment can remove the need for a reminder. A disputed charge needs investigation, and an agreed promise to pay needs its own review date. Sending the next scheduled letter regardless of those events defeats the purpose of maintaining an account history.
Staff should be able to see which reminders were prepared, approved and sent. A queued message is not evidence of delivery. Failed correspondence needs attention so that an account does not progress on the assumption that the customer received a notice.
Dunning in Subscription Billing
Subscription dunning often starts with a failed automatic collection. The cause could be an expired card, insufficient funds, a cancelled mandate or a provider error. Those cases require different responses, so the failure reason matters as much as the fact that no payment arrived.
A retry policy should follow the payment provider’s rules and the customer’s authorisation. A request to update payment details may resolve the issue, while repeated attempts against an unusable payment method can add work without improving the outcome.
Keep collection attempts and invoice chasing connected. Otherwise a customer can receive a demand while a payment is still being processed. Payment collection and credit control serve related parts of the same account workflow.
UK Credit Control and Late-Payment Charges
For qualifying commercial debts, UK legislation provides a route to statutory interest and fixed recovery costs. Eligibility depends on the transaction and contractual terms; it should not be assumed for every telecoms account. GOV.UK explains the interest rules and recovery-cost bands.
A charge and a reminder perform different jobs. Interest records a financial remedy where it applies; a reminder communicates what is due and gives the customer a way to respond. Adding a charge will not resolve a missing purchase order, a billing error or an unresolved service complaint.
Our late payment interest calculator supports an invoice-level assessment. The product article on automated chasing and late-payment charges explains how those decisions fit into SAFE CRM.
Frequently Asked Questions
What is the difference between dunning and credit control?
Dunning concerns payment reminders and follow-up actions. Credit control is broader: it includes assessing credit exposure, agreeing terms, checking invoices, managing collections and deciding how to handle unresolved balances. A dunning sequence is one part of that process.
How many dunning letters should I send?
There is no single sequence suitable for every account. Choose a policy that reflects payment terms, the service, customer circumstances and applicable obligations. Include a review point before stronger action, and revise the sequence when a payment, dispute or arrangement changes the account position.
Does dunning always mean increasingly firm letters?
No. A process can include a courtesy reminder, a payment-link email, a call task or an internal review. The next action should address the reason for non-payment. Greater urgency may be appropriate, but a more forceful letter is not a substitute for resolving a query.
Running the Process From Billing Data
The Credit Control workspace in SAFE CRM reads the billing ledger to assess eligible accounts and prepare the next actions. Contact stages can send automatically or create correspondence for approval, depending on configuration. Current payments, holds and other eligibility checks still govern whether contact proceeds.
For the wider operating routine, see our credit control process guide. Use the aged debt report to review the outstanding balances behind the worklist, and contact us to discuss the process against your own accounts.