---
title: "What is dunning?"
description: "Dunning explained in plain English: definition, how it works, an example, and how it appears in QuickBooks and Xero."
url: https://ledgerbpo.com/glossary/dunning/
updated: 2026-09-11
publisher: LedgerBPO (SS Support Network LLC)
language: en-US
---

# What is dunning?

Glossary

Dunning is the structured process of reminding customers about overdue invoices, typically through a series of emails, letters, or calls that increase in urgency the longer a balance stays unpaid.

Updated September 2026

## How dunning works

A dunning process usually starts with a friendly reminder a few days before or after the due date, then moves to firmer emails and eventually a phone call as an invoice ages further past due. Each step is planned in advance, so customers get consistent, predictable communication rather than random follow-up. The exact timing and number of steps in a dunning sequence usually depends on the size of the invoice and the customer relationship.

A well-run dunning process balances collecting payment with keeping the customer relationship intact, especially for repeat customers or important accounts. Businesses often track a promise-to-pay date when a customer commits to a payment, then follow up again if that date passes without payment received. Larger, high-value invoices often get a more personal approach earlier in the process rather than waiting for the standard automated sequence to run its course.

## Example

An invoice due on the 1st gets a friendly email reminder on the 5th if unpaid. By the 20th, with still no payment, a firmer email goes out referencing the 20 days past due status. By the 35th, a phone call is made, and the customer promises to pay by the 40th, which is logged and tracked.

## Dunning in QuickBooks Online vs Xero

QuickBooks Online can send automatic reminder emails for overdue invoices under its Reminders settings. Xero offers similar automated invoice reminders under its invoicing settings, with customizable timing and message templates. Neither tool makes collection phone calls, which still require a person to follow up directly. Neither platform tracks a promise-to-pay date or logs call notes, which usually requires a simple spreadsheet or a dedicated tool.

## Common mistakes

- A business skips the early friendly reminder stage and jumps straight to a firm demand, which damages the customer relationship over a minor, easily resolved delay.
- Dunning cadences are set once and never adjusted for invoice size, so a small invoice and a very large one get the exact same reminder schedule.
- Promise-to-pay dates are not tracked or followed up on, so a customer who breaks their word quietly slips through without anyone noticing for weeks.

## Why it matters

Dunning is the structured follow-up that turns an overdue invoice into cash instead of a write-off. A business without a consistent dunning process collects more slowly, ties up cash that could cover payroll or inventory, and risks damaging customer relationships with inconsistent or overly aggressive reminders. For owners and finance managers, a disciplined dunning cadence protects cash flow while keeping important customer relationships intact.

## Related terms

- [Aging report](https://ledgerbpo.com/glossary/aging-report/)
- [Credit memo](https://ledgerbpo.com/glossary/credit-memo/)
- [Accounts receivable](https://ledgerbpo.com/glossary/accounts-receivable/)
- [All terms](https://ledgerbpo.com/glossary/)

## How LedgerBPO handles dunning

Our DunningDesk process runs a set cadence of emails and calls for every overdue invoice, logging each promise to pay and following up if it is missed. A dedicated accountant handles the communication under your brand, so customers hear from your business, not a third party. You get faster collections without the awkward follow-up calls. We log every promise to pay and follow up automatically if the promised date passes without payment.

[Reminders that get invoices paid without souring relationships](https://ledgerbpo.com/services/payment-reminders/)

Next step

## Books closed. Invoices paid. Every month.

Tell us what is going on with your books or billing. You will hear from a named person within 1 business day, with a custom quote and a plan for the first close.

- Reply from a named person within 1 business day
- No setup fee, month-to-month
- Your software, your data, no lock-in

Start with a custom quote

[Get a custom quote](https://ledgerbpo.com/get-a-quote/) [Book a 20-minute call](https://ledgerbpo.com/book-a-call/) Or call [+1-657-777-0006](tel:+16577770006) during US, UK or Australian business hours.

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Source: https://ledgerbpo.com/glossary/dunning/ · Contact: https://ledgerbpo.com/contact/ · Full site map for agents: https://ledgerbpo.com/llms.txt