Dunning

Dunning is an automated process for recovering overdue payments from customers. It involves a series of planned and escalating communication attempts and recovery actions.

The process runs through automated workflows triggered by factors like payment due dates, account status, and payment history. It usually starts with gentle reminders via email or SMS, escalates to formal notices and final demands, and may end with account suspension or service termination. Intelligent scheduling helps choose the best time for outreach, based on time zones, past responses, and customer behavior.

Effective dunning relies on multi-channel communication. This includes personalized email campaigns, real-time SMS alerts, automated calls using interactive voice response (IVR), and formal postal letters. Advanced platforms personalize the message tone, payment options, and content based on customer segments, debt age, and account value.

Modern systems also use smart retry logic. They automatically retry failed payments using saved cards, updated account details, or alternative methods before starting the recovery workflow. Compliance with laws like the Fair Debt Collection Practices Act (FDCPA), the General Data Protection Regulation (GDPR), and other local rules is built in, with audit logs for legal traceability.

Customer experience remains central to modern dunning. Features like self-service portals, flexible payment plans, dispute resolution, and clear account status updates help reduce friction. Machine learning models enhance these efforts by predicting payment outcomes, improving timing, and choosing the best communication strategy for each case. This boosts revenue recovery while reducing churn and protecting long-term relationships.