A Comprehensive Guide to the Dunning Letter: What It Is and Why You Should Automate It With NetSuite
Payment reminders help resolve outstanding balances, but they can take time and resources to send. NetSuite automation makes it easy to send notices that spur revenue.
We all have clients or customers who don’t pay their bills. Some forget and need gentle reminders. Others need a lot more encouragement.
Either way, you have your own accounts to settle and need cash to keep flowing so you can maintain your business. Clients can't pay whenever they want.
We know how exhausting it can feel to hound people for payment. It’s not fun, and it wastes staff resources. The NetSuite Dunning Letters SuiteApp automates the process so you can save time and energy on a task no one likes. The application identifies overdue invoices and sends payment reminders using sample templates or custom letters you design for your clients.
Schedule a free consultation with SuiteDynamics and get expert advice about establishing a dunning system that gets results. We can implement and configure the SuiteApp to free your team up for making sales and increasing profits.
What Is a Dunning Letter?
A dunning letter is a notice or letter your company sends a customer about an unpaid bill or debt. It's like a friendly (or not-so-friendly) reminder to pay the money they owe. The word "dunning" comes from an old term for demanding payment.
Here's how it typically works:
- The customer receives a product or service from your company, and you send a bill or invoice.
- If the customer forgets to pay the bill or doesn’t pay on time, you might send a dunning letter.
- This letter usually includes information about the unpaid amount, bill details, and a clear request for payment. It may also mention any late fees or penalties your company could add if the customer continues to delay payment.
- If the customer still doesn’t pay, you may send multiple dunning letters, each one potentially more urgent or strongly worded than the last.
Dunning Levels
The term “dunning levels” refers to the sequence of increasingly severe reminders you may send customers about overdue bills or unpaid debts. These reminders are like steps in a staircase, each level becoming more assertive or urgent. The goal is to remind customers to settle their debt by escalating communication tone and content.
Sending Dunning Letters in NetSuite
We know it’s frustrating to manually track outstanding balances and send notices to clients and customers—especially when automated options exist. The NetSuite Dunning Letters SuiteApp identifies overdue invoices and automatically issues payment reminders so you can focus your workforce on more strategic tasks.
The application also allows you to set up procedures, including dunning levels, that guide the automated process. You can determine the intervals at which to send letters and how urgent the notices should read at your chosen escalation points, such as 30, 60, or 90 days.
The NetSuite Dunning Letters SuiteApp also allows you to:
1. Customize dunning letter templates.
2. Create dunning letter templates in various languages.
3. Establish evaluation workflows, determining which customers will be dunned.
4. Choose whether to send notices manually or automatically.
5. Choose whether to email notices, print them, or both.
6. Pause dunning to handle customer billing inquiries or extend a customer’s payment time.
The SuiteApp also features a dashboard that consolidates your dunning data into a single view. It features the following charts and lists.
1. Dunning Overdue Receivables
2. Recently Sent/Printed Dunning Letters
3. Dunning Average Time to Pay
4. Dunning Overdue Receivables by Customer
5. Dunning Overdue Receivables by Age
6. Total A/R Overdue
7. Customers with Paused Dunning
8. Invoices with Paused Dunning
SuiteDynamics experts can help customize a dunning procedure for your company in the NetSuite Dunning Letters SuiteApp. We’ll ensure you have a solid system that collects as much outstanding revenue as possible. Schedule your free consultation today.
4 Tips for Writing Custom Dunning Letters
You can use NetSuite’s dunning letter samples with minimal changes. Or you can write your own templates to better reflect your company culture and voice. It’s your choice, but if you choose the latter option, keep these tips in mind.
- Keep the first letter light and polite. Your customer or client may have simply forgotten to schedule payment, so it’s best to start with a gentle reminder to settle the account. You don’t want to harm the relationship. State that the bill is overdue and politely request they pay by a set date.
- Make the second letter firm. Keep your tone calm, even after your customer ignores the first dunning letter. Remain factual. State the amount the customer owes and how overdue that payment has become. Then, explain the legal steps you plan to take if the customer doesn’t settle their bill by a specific date.
- Prepare for legal action after the third letter. You may choose to skip the third letter and start legal action after the second notice’s due date expires. Still, if you send a third letter, keep it short and direct. Tell the customer what legal actions you plan to take if they don’t pay within a set timeframe.
- Follow up with a phone call. We recommend calling your customer or client the day after sending each dunning letter. This practice lets you clear up any misunderstandings or billing issues and answer questions about your invoice.
- Hire a lawyer. Having an attorney review your dunning letters is a good idea, especially if you deal with large transactions or plan to take legal action. These notices must be written correctly.
Of course, you can create more than three dunning levels and corresponding dunning letter templates. The SuiteApp lets you add up to 15 levels to a dunning procedure. Just remember to keep your language calm and firm and to escalate the urgency appropriately.
Learn more about the NetSuite Dunning Letters SuiteApp during a free consultation with SuiteDynamics experts. We’ll advise on how best to configure the application for your company’s needs, and we'll complete its implementation and setup so you can stay focused on company growth.
Settle Outstanding Bills with Little Headache
In a perfect world, everyone would pay bills on time and in full. Unfortunately, that’s not going to happen. People will forget, misunderstandings will happen, and, sadly, some will choose dishonesty. Meanwhile, your company needs revenue to keep employees paid and vendors happy.
We know you would probably prefer never to send a payment reminder. But as a growing business, you must have a dunning procedure in place—preferably an automated one. The NetSuite Dunning Letters SuiteApp takes the burden of flagging overdue invoices and sending notices off your team so they can spend more time expanding your brand.
Schedule a consultation with SuiteDynamics experts and discover how this application can make your office more efficient. We’ll help you establish the proper dunning procedures by implementing the NetSuite Dunning Letters SuiteApp with precision and care. Establish a better, smarter payment reminder system today.
We pull information from NetSuite material, SuiteDynamics experts, and other reliable sources to compose our blog posts and educational pieces. We ensure they are as accurate as possible at the time of writing. However, software evolves quickly, and although we work to maintain these posts, some details may fall out of date. Contact SuiteDynamics experts for the latest information on NetSuite ERP systems.
Part of this text was generated using GPT-3, OpenAI’s large-scale language-generation model. After generating the draft language, our team edited, revised, and fact-checked it to ensure readability and accuracy. SuiteDynamics is ultimately responsible for the content of this blog post.
