The term “dun” became a mainstream keyword in the 17th century, where it first began as an accounting phrase defined as a demand for debt repayment.
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One of the methods that remain popular today, in specific, is by sending a dunning letter to the clients. With that, this millennia-old issue has sparked the development of various approaches to maximise the chances of successful debt collections.
However, the real business world is by no means perfect, and it is completely normal for firms having to prompt their customers to settle their bills as soon as possible. In an ideal situation, the business would always have its customers paying their invoices in a punctual manner without much trouble. The practice of extending credit terms to clients is not a novel concept in today’s commercial world. Similarly, dunning letters are a useful resource to help accounts receivable professionals better manage their days sales outstanding (DSO) as part of ensuring that the company’s cash flow remains in a healthy state. The payment collection invoice letter delivered to the customer as a reminder of their past due invoice(s) is termed a “dunning letter.”ĭunning letters are often written and used by the firm’s accounts receivable unit to follow up on customers who are late on their payments, in which the main objective of their efforts is to minimise the number of client accounts that become delinquent. Thus, sending a gentle reminder is often a necessary practice employed by the affected companies. In the business-to-business (B2B) sector, it is quite common to come across clients who do not settle their invoices by the due date.
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