Dunning

Meaning & Definition

The process by which reminders or notices are issued to collect overdue amounts is called dunning. In the context of an organization, this means following up systematically (i.e., through emails, letters, etc.) on employees, vendors or clients regarding overdue amounts owed. Dunning also includes regular communications with employees, vendors or clients about unpaid commercial obligations.

Important features of Dunning

• Assists in recovering overdue payments in a timely manner.
• Enhances cash flow and maintains discipline with finances.
• Automated processes allow for fewer manual follow-ups.
• Provides obvious records for reconciling and auditing purposes.
• Promotes open communication regarding outstanding debts and collections.

Applicable Regulations & Policies 

Dunning does not have any statutory obligations connected to it specifically, but dunning should be performed in accordance with contractual obligations, industry standards, and the laws of the Courts with respect to harassment and unfair practices related to recoverings.