Automated Dunning & Payment Reminders
Payment reminder, first and second dunning letter go out on fixed deadlines – but only for invoices where the payment position is unambiguous. Disputed items, instalment plans and large balances drop out of the run beforehand. The rest is chased without anyone opening the ledger.
Nobody chases late on purpose
Hardly any company chases too little because it lacks templates. It chases too late because no one owns a fixed slot for it. The aged debtors list gets reviewed when there is a quiet moment – and quiet moments are rare in the week the deadlines fall due. Weeks then pass between the due date and the first reminder, and by that point the invoice has long left the customer's field of view.
The real difficulty is not sending the letter but deciding who may be chased at all. A dunning run is only harmless once the payment position underneath it is correct: part payments, lump-sum transfers with no invoice number, credit notes still open, an early settlement discount nobody has posted yet. Every one of these small things can produce a reminder for something the customer has already paid – and that single case costs more goodwill than twenty punctual reminders earn.
So we build the reconciliation and the exceptions first, and the wording afterwards. An automation that chases correctly almost every time is not relief but a new source of error: it generates phone calls instead of saving them. The rules that take an item out of the run matter more than the rules that keep it in.
Which receivables can be chased automatically
We start with the invoice type that occurs most often and has the clearest deadlines. Further types later share the same reconciliation and the same exceptions.
Invoices with a fixed payment term
The most common starting point: recurring invoices to existing customers, a payment date fixed by the calendar, a clean payment reference. The run works here without special cases.
Interim and final accounts
In trades and construction, interim accounts run late far more often than final ones. The stages therefore depend on the type of invoice, not only on the amount.
Subscriptions and membership fees
Same amount, same date, many recipients – the case with the highest degree of automation, because a returned direct debit is the only genuine exception.
Goods supplied on account
Part deliveries and credit notes make reconciliation demanding. Without a link between delivery note and invoice you end up chasing lines that were cancelled long ago.
Public bodies and large corporates
Long payment terms, invoicing portals, mandatory purchase order numbers. Here the automation does not replace the reminder but the check on whether the invoice arrived at all.
Private customers
Different deadlines, different language, tighter rules once a customer is in default. We separate the two paths instead of hunting for wording that suits both.
Stages, deadlines and amount bands
An example dunning plan: the timeline counts from the due date, the amount bands decide whether a stage runs on its own or waits for a person to read it.
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Day 0
Due date
Payment term reached. The item is watched, nothing leaves the building.
runs -
+3 days
Payment reminder
Email with the invoice attached. No new deadline, no charge.
runs -
+10 days
First dunning
Email with a new seven-day deadline, copy to the accounts team.
runs -
+21 days
Second dunning
Email and letter. Above €5,000 only after a person has read it.
release -
+35 days
Handover
A task with a deadline and an owner instead of a fourth message.
person
An incoming payment ends the sequence at any point, including between two stages.
Amount bands
| Open balance | What the run does with it | State |
|---|---|---|
| under €50 | No reminder. The item stays open and is settled with the next invoice. | excluded |
| €50 – €5,000 | Stages 1 to 3 run without asking, using your wording and deadlines. | automatic |
| over €5,000 | From the first dunning the draft waits a day for accounts to read it. | release |
Never automatic: these items leave before the run
- Open complaint. A case is running against the invoice or a credit note has been promised.
- Instalment plan. The customer pays to a separate schedule and the instalments are tracked apart.
- Direct debit live. Collection is still in flight; a returned debit starts its own path.
- Flag in the system. Accounts only their own contact may approach, with no exception.
- Insolvency or litigation. The item is frozen and reported to the accounts team.
What matters are the two stages that need a release. Automate everything and you lose exactly the cases where a phone call achieves more than a third email.
Deadlines and thresholds are an example and are agreed with you. Consumers usually get different deadlines from business customers; whether dunning charges and interest are shown is your decision.
From open item to sent stage
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Read the open items
We read the open items from your accounting system: invoice number, amount, due date, customer and whatever flags you maintain there. What is read is today's position, not last night's export.
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Reconcile incoming payments
Bank movements are matched against the open items using payment reference, amount and customer number. Part payments and settlement discounts are allocated; anything ambiguous goes to a clearing list rather than into the run.
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Take out the exceptions
Before anything is sent, the run drops what must not be chased: complaints, instalment plans, live direct debits, flagged customers and balances below your de minimis threshold.
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Pick the stage and send
Due date, amount and invoice type determine the stage. The wording comes from your template, the invoice is attached, delivery uses your own sender address – from the second dunning optionally as a letter as well.
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Log it and hand over
Every message is logged against the record with date, stage and recipient. The final stage does not produce another email but a task with a deadline and a named owner.
What changes day to day
Today
- The aged debtors list is reviewed when there is time
- Weeks pass between the due date and the first reminder
- Customers are chased for invoices they have already paid
- How firmly someone is chased depends on who handles it
- The state of a case sits in one person's mailbox
With an automated run
- The run starts daily, whatever the workload that week
- The reminder goes out three days after the due date
- Paid and disputed items leave before anything is sent
- Deadlines and stages are the same for every customer
- Every message sits on the record with date and stage
Where the automated run stops
Chasing looks like pure legwork until you look at the special cases. We clarify these four before quoting:
- With a small caseload it does not pay off. If you have ten or fifteen overdue invoices a month, you clear them in half an hour and do not need a €1,290 automation for it. The effort only appears once nobody has an overview of the list any more – below that you are mainly buying a rule set that wants maintaining.
- Reconciliation is only as good as the payment reference. Lump-sum transfers without invoice numbers, payments from a third-party account or a silent settlement discount cannot be matched with confidence. Those cases deliberately land in a clearing list and are not chased. That is not a weakness but the condition for nobody being chased twice.
- Chasing does not create liquidity at the customer's end. Reminders speed up the people who forgot. Anyone who cannot pay will not pay after the third stage either – the automation only makes those cases visible sooner. Collections, legal proceedings or a write-off remain your decision.
- We are not legal advisers. Which deadlines you set, whether you show dunning charges and interest on late payment, and how you word things towards consumers is for you to decide, with your accountant or solicitor where needed. We build the sequence so that deadlines and wording can be changed later without anyone touching the automation.
Fits your accounting
Scope and price
The entry price covers one sequence with three stages, your amount bands and the payment reconciliation. What moves the price, we say before the quote.
- Connection to your accounting system, reading the open items
- Payment reconciliation against bank movements or payment providers
- Three dunning stages with your deadlines, wording and amount bands
- Exception rules that pull items out of the run before anything is sent
- Clearing list for payments that cannot be allocated with confidence
- Log on the record and handover of the final stage as a task
- Documentation, handover session and 30 days of support
What increases the price
- Separate sequences for business and private customers
- Several legal entities, companies or currencies
- Physical letters through a print provider rather than email only
- Handover to a collections agency or to legal proceedings
- Reconciliation across several bank accounts and payment providers
Separate sequences for business and private customers, physical letters and several legal entities typically land in the range of our Workflow Advanced package from €2,490. We quote the binding fixed price after the intro call.
All prices excl. VAT · operation and further development optionally via a support package
What you get
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Production dunning run
Set up from the open items list to the sent message and signed off in a dry run on real cases
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Documented stages and thresholds
Deadlines, amount bands and exceptions as a table you can have changed later
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Clearing list and handover point
Whatever the automation does not decide sits in one place rather than in several mailboxes
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Training for the accounts team
How a customer is taken out of the run and what happens when a payment arrives afterwards
Frequently asked questions about automated dunning
These solutions fit alongside
Automated Invoice Creation & Delivery
The step before: an invoice that goes out on time and complete leaves less to chase.
E-Invoicing Automation
XRechnung and ZUGFeRD in the mandatory format – and proof that the invoice was delivered.
Accounts Payable Automation
The same deadline logic in reverse: take the discount instead of being chased yourself.
Contract Management Automation
Payment terms and special conditions live in the contract – that is where chasing is decided.
How old is your oldest unpaid invoice?
In the free intro call we go through your open items: which deadlines apply today, which cases must never be chased automatically, and whether your payment reconciliation is solid enough to build on. Afterwards you know whether the run pays off at your caseload.
Book a free intro callWhere automated receivables follow-up creates value in everyday work
Open receivables are prioritised by due date, amount and customer status; suitable reminders and internal escalations start transparently.
Three concrete operating scenarios to compare with your own process.Send a considerate reminder
The first reminder reflects due date, customer type and communication already documented.
Match payments automatically
New payments stop active sequences and update the status.
Escalate exceptions deliberately
Disputed or important cases receive context, a deadline and a clear owner.
A strong fit when …
Documents, amounts and approvals follow explicit rules; exceptions must remain visible instead of being decided silently.
- You handle recurring open receivables using repeatable rules.
- The intake, target system and accountable business role can be named clearly.
- Exceptions are allowed to remain visible and move to people deliberately.
Deliberate automation boundary
Disputes, strategic customers, instalment plans and legal steps stay with accounting, sales or legal advisers.
Explore the technical approach and platformsEstimate time savings with your own volume
The calculator uses 12 minutes today and 3 minutes after automation as fixed example assumptions. It does not replace process analysis.
Illustrative estimate based on the visible assumptions — not a guarantee.