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Dunning letters are an essential resource for any business who sells to customers on credit. These letters essentially tell your clients, “you’re overdue on an invoice and here is how to pay us,” but writing one that helps you get a step closer to collecting payment is not easy. You have to do more than simply write up a letter or email, send it out, and wait to get a check in the mail. Here are five steps to follow to increase the likelihood that your dunning letters actually lead to collection.


At what point will you send out your dunning letters? Most companies reach out to customers about overdue invoices at 30 days, 60 days, 90 days, and 120 days beyond terms. These are pretty standard for most and are a good rule of thumb, but feel free to adjust them on an individual customer basis or based on your business and industry requirements.


When you see that a customer has reached the point where a dunning letter is required, be sure to carefully gather current information on the invoice and the account in question. If you’re using aging reports and spreadsheets to manage accounts receivable, ensure that they have been updated to reflect accurate information.

For example, if you are working off of documents that are a month old, your customer could have paid a portion or even the full amount of the invoice in question and sending them dunning letters to the contrary is not only a waste of your time and materials, but can come across as unprofessional and annoying to the customer.

Due to the static nature of spreadsheets and the high risk for error in manual data entry processes, many businesses have decided to move to more modern tools for managing invoices and the related data using automated accounts receivable software.


As you send dunning letters to your customers, it’s important to remain professional and tailor the message and tone to fit the individual situation. For example, in the case where you’re sending out a 30 day dunning letter, the customer very well may not have ever received the invoice in the first place; so sending an aggressive letter that may be better suited for those customers at 120 days past due would not be appropriate or effective.

Having a series of letters that make sense for various stages of the collection process is a great way to quickly draft and send the right message at the right time.


While sending dunning letters through the mail is a common way to get letters to customers, more and more organizations are sending late payment notifications via email. Not only is this a faster and less expensive way to complete this task, but customers are more responsive according to a recent survey results which found that 45% of companies find email to be their most effective mode of communication for customers. When you begin communicating with customers electronically, you can even automate the process to ensure dunning letters are still being sent despite how busy you are completing other tasks.


After you send the letter, don’t just check it off of your to-do list and forget about it; follow up on it. In some cases when the outstanding payment is especially large or far past due, a follow up phone call may be required. In other situations it’s important to make sure that if the invoice continues to go unpaid, that another letter is sent at the next milestone (60 days, 90, 120). Following up is where many businesses fall flat since it takes time to track this all manually when you have so many other tasks and activities to manage. As mentioned in the above section, automating the process can be extremely helpful to ensure such steps are always being taken.

If you’re still not getting paid even after sending these letters, start the process all over again at the next milestone and be sure your sending the right message at the right time.


Need more help writing dunning and collection letters?
Use our templates here.


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