Dunning
Definition
The structured sequence of reminders sent to a customer with an overdue balance, escalating in tone and channel over time. Automating dunning is one of the most reliable ways to reduce days sales outstanding.
Related Terms in Invoicing & Sales
Collections
The process of pursuing payment on overdue invoices, from reminders and statements through payment plans to legal action or external agencies. Effective collections depend on accurate aging data and a consistent escalation policy.
Credit Memo
A document issued to reduce the amount a customer owes, used for returns, overcharges, agreed discounts or service failures. It can offset a future invoice or support a refund, and in VAT and GST systems it also adjusts the tax reported.
Remittance Advice
A note sent by a payer listing exactly which invoices a payment covers. Without it, part-payments and bulk transfers have to be allocated by guesswork, which is a common source of reconciliation delay.
Statement of Account
A periodic summary sent to a customer showing opening balance, invoices raised, payments and credits applied, and the closing balance owed. Unlike an invoice it is not a demand for a specific sum but a reconciliation tool.
Stop memorising terms — let HelloBooks do the work
AI-assisted bookkeeping that handles invoicing, GST, reconciliations, and reports automatically. Free to start.