Dunning
Overview
Dunning – Business Overview and Usage
Dunning is a business document used to manage and control the follow‑up process for overdue customer payments. It helps organizations apply a structured, professional, and consistent approach to reminding customers about unpaid invoices, reducing delayed payments and improving cash flow.
Rather than relying on ad‑hoc reminders, Dunning provides a formal record of when reminders are issued, what level of urgency applies, and what actions may follow if payment is not received.
Purpose in Business Operations
Dunning is used to:
- Track overdue receivables in a structured way
- Issue payment reminders at different severity levels
- Maintain a clear history of communication with customers
- Support disciplined credit control and collections
- Protect customer relationships while enforcing payment terms
It acts as a bridge between invoicing and more serious collection actions.
Prerequisites and Setup Requirements
Before using Dunning, the following should be in place:
- Customers with defined payment terms
- Sales invoices issued and posted
- Clear credit and collections policies (e.g., reminder timing, escalation rules)
- Defined dunning levels (such as gentle reminder, warning, final notice)
- Standard communication templates aligned with company tone and legal requirements
This ensures dunning activities are consistent and aligned with business policy.
Typical Workflow and Business Process Fit
Invoice Becomes Overdue
A customer does not pay an invoice by the agreed due date.Dunning Record is Created
A Dunning document is generated for the overdue invoice, capturing the amount, customer, and overdue status.Apply Dunning Level
The document assigns a reminder level based on how long the invoice has been overdue.Customer Communication
A reminder is sent to the customer, clearly stating the outstanding amount, due date, and next steps.Escalation if Needed
If payment is still not received, a new Dunning entry or a higher level is applied, increasing urgency.Resolution or Further Action
Once payment is received, the dunning process stops. If not, the case may move to credit hold, legal action, or external collection.
Key Business Scenarios Where Dunning Is Essential
- Managing large volumes of customer invoices
- Enforcing payment discipline without damaging customer relationships
- Supporting finance teams in structured collections work
- Preparing audit‑ready records of payment follow‑ups
- Reducing reliance on manual tracking and informal reminders
It is especially valuable for businesses offering credit terms to customers.
Important Considerations for Users
- Use the right tone: early dunning should be polite, later stages more firm
- Ensure reminders align with customer agreements and local regulations
- Avoid over‑dunning important or strategic customers without review
- Regularly monitor dunning status to prevent escalation gaps
- Treat Dunning as a relationship management tool, not just a payment chase
When used correctly, Dunning strengthens cash flow while maintaining professionalism and trust.
In summary, Dunning is a critical business tool for managing overdue payments in a controlled, transparent, and customer‑aware manner. It supports healthy financial operations and disciplined credit management across the organization.
Basic Information
- Module: Accounts
- Document Type: Other
Fields
| Field Name | Label | Type | Required | Options | Description |
|---|---|---|---|---|---|
| naming_series | Series | Select | DUNN-.MM.-.YY.- | Auto-generated Dafater dunning reference number series | |
| customer | Customer | Link | ✓ | Customer | Customer receiving the dunning notice |
| customer_name | Customer Name | Data | - | Customer name for display and communication | |
| company | Company | Link | ✓ | Company | Company issuing the dunning notice |
| posting_date | Date | Date | ✓ | - | Date when dunning is recorded |
| posting_time | Posting Time | Time | - | Time when dunning is recorded | |
| status | Status | Select | Draft, Resolved, Unresolved, Cancelled | Current processing status of the dunning | |
| currency | Currency | Link | Currency | Transaction currency for dunning amounts | |
| conversion_rate | Conversion Rate | Float | - | Exchange rate to company currency | |
| dunning_type | Dunning Type | Link | Dunning Type | Configured dunning level and rules | |
| rateofinterest | Rate of Interest (%) Yearly | Float | - | Annual interest rate applied on overdue amounts | |
| overdue_payments | Overdue Payments | Table | Overdue Payment | List of overdue invoices included in dunning | |
| total_interest | Total Interest | Currency | currency | Calculated total interest on overdue payments | |
| dunning_fee | Dunning Fee | Currency | currency | Additional fee charged for dunning | |
| dunning_amount | Dunning Amount | Currency | currency | Total dunning charges in transaction currency | |
| basedunningamount | Dunning Amount (Company Currency) | Currency | Company:company:default_currency | Total dunning charges in company currency | |
| spacer | Spacer | Data | - | Internal spacing field for layout purposes | |
| total_outstanding | Total Outstanding | Currency | currency | Total outstanding amount including overdue invoices | |
| grand_total | Grand Total | Currency | currency | Final payable amount including interest and fees | |
| language | Print Language | Link | Language | Language used for printed dunning letter | |
| body_text | Body Text | Text Editor | - | Main content of the dunning letter | |
| letter_head | Letter Head | Link | Letter Head | Letterhead used for dunning communication | |
| closing_text | Closing Text | Text Editor | - | Closing message of the dunning letter | |
| income_account | Income Account | Link | Account | Account to record dunning income | |
| cost_center | Cost Center | Link | Cost Center | Cost center for dunning revenue allocation | |
| amended_from | Amended From | Link | Dunning | Reference to the original dunning document | |
| customer_address | Customer Address | Link | Address | Customer address used in dunning letter | |
| address_display | Address | Small Text | - | Formatted customer address for display | |
| contact_person | Contact Person | Link | Contact | Primary customer contact for dunning | |
| contact_display | Contact | Small Text | - | Formatted contact details for display | |
| contact_mobile | Mobile No | Small Text | Phone | Customer contact mobile number | |
| contact_email | Contact Email | Data | Customer contact email address | ||
| company_address | Company Address | Link | Address | Company address shown on dunning letter | |
| companyaddressdisplay | Company Address Display | Small Text | - | Formatted company address for display |
Child Tables
Overdue Payments (Overdue Payment)
| Field Name | Label | Type | Required | Options | Description |
|---|---|---|---|---|---|
| sales_invoice | Sales Invoice | Link | ✓ | Sales Invoice | Related sales invoice generating the overdue payment in Dafater |
| payment_schedule | Payment Schedule | Data | - | Scheduled installment reference for tracking overdue amounts in Dafater | |
| dunning_level | Dunning Level | Int | - | Current reminder escalation level applied for overdue collection in Dafater | |
| payment_term | Payment Term | Link | Payment Term | Payment terms governing due dates and overdue conditions in Dafater | |
| description | Description | Small Text | - | Additional notes explaining the overdue payment context in Dafater | |
| due_date | Due Date | Date | - | Date when payment was originally due as per Dafater | |
| overdue_days | Overdue Days | Data | - | Number of days payment is overdue calculated by Dafater | |
| modeofpayment | Mode of Payment | Link | Mode of Payment | Expected or used payment method for settling overdue amount in Dafater | |
| invoice_portion | Invoice Portion | Percent | - | Percentage of invoice amount covered by this overdue payment in Dafater | |
| payment_amount | Payment Amount | Currency | currency | Amount expected or collected against overdue invoice in Dafater | |
| outstanding | Outstanding | Currency | currency | Remaining unpaid amount after payments and adjustments in Dafater | |
| paid_amount | Paid Amount | Currency | currency | Total amount already paid against this overdue item in Dafater | |
| discounted_amount | Discounted Amount | Currency | - | Amount reduced through discounts applied on overdue payment in Dafater | |
| interest | Interest | Currency | currency | Interest charged on overdue amount based on Dafater rules |
Permissions
| Role | Read | Write | Create | Delete | Submit | Cancel |
|---|---|---|---|---|---|---|
| Accounts User | ✓ | ✓ | ✓ | ✓ | ||
| Accounts Manager | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| System Manager | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
Related DocTypes
| DocType | Relationship | Module |
|---|---|---|
| Account | Links to | Accounts |
| Address | Links to | Contacts |
| Company | Links to | Setup |
| Contact | Links to | Contacts |
| Cost Center | Links to | Accounts |
| Currency | Links to | Geo |
| Customer | Links to | Selling |
| Dunning | Links to | Accounts |
| Dunning Type | Links to | Accounts |
| Language | Links to | Core |
| Letter Head | Links to | Printing |