Dunning
Automated past-due follow-up that keeps the account
Dunning is the follow-up that happens after an invoice goes unpaid. LedgerUp runs it as a sequence: automatic reminders before and after the due date, escalation on a schedule you set, failed-payment retries, and a hand-off to a human the moment a customer disputes, promises to pay, or asks a question the sequence shouldn't answer on its own.
What dunning is
Dunning is the structured process of communicating with customers about overdue or failed payments — reminders, escalations, and retries — with the goal of collecting the balance without damaging the relationship. It differs from collections in scope: dunning is the automated sequence that runs on every open invoice, while collections is the broader function that includes dunning plus disputes, payment plans, escalation to account owners, and, at the far end, write-off or agency referral.
How a dunning sequence runs
The default shape of a B2B SaaS sequence. Every step, channel, and interval is configurable.
Pre-due reminder
A courtesy notice a few days before the due date, with the invoice and payment link attached. The cheapest collection you'll ever make is the one that never goes past due.
Due-date notice
Sent on the due date itself, confirming the amount and terms. For customers paying through an AP portal, this is also where a missing PO or a stalled portal submission surfaces.
Early past-due follow-up
Short, friendly, and assumes an oversight rather than a refusal — because at this stage it usually is. Sent to the AP contact with the account owner visible on the thread.
Escalation to the billing owner
If the invoice is still open after your first escalation window, the sequence widens to the customer's billing owner and loops in your account owner, with the aging and history summarized so nobody re-reads the thread.
Firm notice with terms
Further out, the tone shifts: the balance, how long it has been outstanding, the contractual payment terms, and any late fees or service implications your agreement provides for.
Human hand-off
A dispute, a promise to pay, a partial payment, or a question the sequence shouldn't answer pauses automation immediately and routes to a person in Slack with the full context attached.
Resolution and close-out
When payment lands, cash application matches it to the invoice, the sequence stops, and the outcome — days to pay, which step produced it — feeds back into how the next sequence is tuned.
What you configure
The controls that shape a sequence. Most teams start from the default and adjust segment by segment.
Sequence timing
How many days before and after the due date each step fires, and how long the sequence runs before it escalates out of automation entirely.
Segmentation
Different sequences by customer tier, balance size, payment terms, or risk — an enterprise account on Net 60 shouldn't get the same cadence as a self-serve account on Net 15.
Recipients and escalation path
Who receives each step: AP contact, billing owner, account owner, and when each is added to the thread rather than replacing the last.
Channel and tone
Email, Slack Connect, or a task for the account owner, and the escalation in tone from courtesy reminder to firm notice.
Failed-payment retries
For card and ACH failures, how many retry attempts, on what schedule, and which decline reasons are worth retrying versus routing to a human immediately.
Pause and exclusion rules
Conditions that stop the sequence — an open dispute, a promise to pay, an active renewal negotiation, a hold placed by the account owner.
Promise-to-pay tracking
When a customer commits to a date, the sequence pauses until that date and resumes automatically if the payment doesn't arrive.
Dispute capture
A disputed invoice is flagged with its reason and routed for resolution, so it stops accruing dunning steps that would only make things worse.
docs.ledgerup.ai
Open the dunning configuration guide
Sequence templates, per-segment timing, message customization, retry rules, and escalation routing are configured step by step on the docs site.
Go to docs.ledgerup.aiDunning FAQ
What is dunning?
Dunning is the structured process of following up with customers on overdue or failed payments — a sequence of reminders, escalations, and payment retries aimed at collecting the balance without damaging the relationship. It typically starts before the due date with a courtesy reminder and escalates on a fixed schedule as an invoice ages.
What is the difference between dunning and collections?
Dunning is the automated sequence that runs on every open invoice: reminders, escalations, and retries on a schedule. Collections is the broader function that contains it — dunning plus dispute resolution, payment plans, escalation to account owners and execs, and at the far end write-off or referral to an agency. Dunning handles the majority of invoices; collections handles what dunning can't.
How many dunning emails should a B2B SaaS company send?
Most B2B SaaS sequences run five to seven touches over 60 to 90 days, starting with a pre-due courtesy reminder and escalating from the AP contact to the billing owner to the account owner. B2B differs from consumer dunning in that the person receiving the reminder usually isn't the person who decided not to pay — so escalating to the right contact matters more than sending more messages to the same one.
Does automated dunning damage customer relationships?
It does when a sequence keeps firing at a customer who has already disputed the invoice, already paid, or already committed to a date — which is exactly what unmonitored automation does. LedgerUp pauses the sequence on a dispute, a promise to pay, or a partial payment and hands off to a person with the full context, so automation handles the routine follow-up and humans handle everything that isn't routine.
How does dunning handle failed card and ACH payments?
Failed payments get their own retry logic rather than the standard past-due sequence. Retries run on a configured schedule, and the decline reason determines the path: a temporary failure like insufficient funds is worth retrying, while a hard decline such as a closed account routes to a person immediately to get updated payment details.
What happens when a customer replies to a dunning email?
The reply is read and classified. A payment confirmation or a promise to pay pauses the sequence and records the committed date; a dispute is flagged with its reason and routed for resolution; a question that needs a real answer goes to the account owner in Slack with the invoice, contract, and aging attached. The sequence never continues on top of a live conversation.
How much does automated dunning reduce DSO?
LedgerUp customers report an average 35% reduction in DSO and 75% faster collections. The gain comes less from sending more reminders than from consistency — every invoice gets followed up on schedule, escalation reaches the right contact, and nothing falls through because the person who owned it was busy closing the month.