A simple dunning process for small business
Dunning is just the word for chasing payments on a schedule. Here's a version a one-person business can actually run.
- Dunning = a fixed sequence of reminders, escalating gently, until the invoice is paid or you decide to escalate.
- Five steps over about two weeks: nudge, invoice email, call, firm ask, final notice.
- Pause on a promise, stop on a dispute, stop on payment. Those three rules are the whole process.
- Write it down once, then automate it. A process you run from memory isn't a process.
What dunning means
"Dunning" comes from an old word for demanding payment. In business it means a planned sequence of reminders: what goes out, when, through which channel, and what changes if there's no reply. Big companies have dunning departments. Software companies use "dunning" for retrying failed card payments. For a small business sending invoices, it means the ladder below.
The five steps
1. The nudge (day 1 after due)
A two-line text or WhatsApp with a payment link. Friendly, signed with your business name.
2. The invoice email (day 3 to 4)
The PDF attached, amount and due date in the subject line, one way to pay in the body. This is the record.
3. The call (day 7)
Sixty seconds. Who you are, which invoice, "is anything holding it up?", get a date. Voicemail if no answer. See the phone script.
4. The firm ask (day 10)
A short text or email that asks for a date rather than a feeling, and offers to fix any problem first.
5. The final notice (day 14)
One last message. Plain about next steps, still polite, still offering help. Then a week of silence.
The three rules
- Pause on a promise. "Friday" means nothing goes out until Saturday.
- Stop on a dispute. "The work's not right" means the ladder stops and a person (you) picks up.
- Stop on payment. Obviously, but "obviously" is how customers get a reminder the day after they paid. Check before every send.
After the final notice
Decide, don't drift: a payment plan with dates, a demand letter, small claims, or write it off. Set a reminder for a week after the final notice to make the decision. See invoice overdue: what to do, day by day.
Writing yours down
Open a document. Five lines: day, channel, message. Three rules. One line on what you do at day 21. That's your dunning process. It takes ten minutes and it's the single highest-return ten minutes in small-business finance.
Running it
The process is easy; running it across every invoice, every day, is the part that fails. Invoice AI is that process, automated: it sends the five steps in your name by WhatsApp, text, email and a polite call, follows the three rules, and tells you each morning where everything stands.
Questions people ask
What is a dunning process?
A planned sequence of payment reminders: what's sent, when, by which channel, and how it escalates. For a small business, five steps over about two weeks.
How long should a dunning process be?
About two weeks from the due date to the final notice, then a week of silence before you decide to escalate.
Is dunning the same as debt collection?
No. Dunning is your own reminders, early and polite. Debt collection is a third party, late and expensive. Good dunning means you rarely need collection.
Can dunning be automated for a small business?
Yes. Tools like Invoice AI run the whole sequence by text, WhatsApp, email and phone in your name, pausing on promises and stopping on disputes or payment.