Dunning (process)
Encyclopedia
Dunning is the process of methodically communicating with customers to ensure the collection of accounts receivable
. Communications progress from gentle reminders to almost threatening letters as accounts become more past due. Laws in each country regulate the form that dunning can take. It is generally unlawful to harass or threaten consumer
s. It is acceptable to issue firm reminders and to take all allowable collection options.
The word stems from the 17th century verb dun, meaning to demand payment of a debt.
Dunning is also the process of methodically communicating with individuals to insure certain requested action is taken. It follows a similar process of progressive moving from gentle reminders to almost threatening letters as due dates approach or pass. Businesses frequently use an automated dunning process to remind their employees about certain activities or actions they are expected to take by a certain date. Examples include automated reminders for Performance Appraisal submission, mandatory training, etc. The process may begin with an early letter indicating an approaching due date. Letters typically become stronger in tone as deadlines approach or are passed.
Accounts receivable
Accounts receivable also known as Debtors, is money owed to a business by its clients and shown on its Balance Sheet as an asset...
. Communications progress from gentle reminders to almost threatening letters as accounts become more past due. Laws in each country regulate the form that dunning can take. It is generally unlawful to harass or threaten consumer
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
s. It is acceptable to issue firm reminders and to take all allowable collection options.
The word stems from the 17th century verb dun, meaning to demand payment of a debt.
Dunning is also the process of methodically communicating with individuals to insure certain requested action is taken. It follows a similar process of progressive moving from gentle reminders to almost threatening letters as due dates approach or pass. Businesses frequently use an automated dunning process to remind their employees about certain activities or actions they are expected to take by a certain date. Examples include automated reminders for Performance Appraisal submission, mandatory training, etc. The process may begin with an early letter indicating an approaching due date. Letters typically become stronger in tone as deadlines approach or are passed.
See also
- Collection agencyCollection agencyA collection agency is a business that pursues payments of debts owed by individuals or businesses. Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed....
- Consumer Credit Protection ActConsumer Credit Protection ActThe Consumer Credit Protection Act, , composed of several titles relating to consumer credit, mainly title I, the Truth in Lending Act, title II related to extortionate credit transactions, title III related to restrictions on wage garnishment, and title IV related to the National Commission on...
- FDCPA - the Fair Debt Collection Practices ActFair Debt Collection Practices ActThe Fair Debt Collection Practices Act , et seq., is a United States statute added in 1978 as Title VIII of the Consumer Credit Protection Act...