what is a dunning letter

A dunning letter is a collection notice sent to a customer explaining that a payment they owe is overdue. It is a notification sent to a customer stating that they are overdue in paying an account receivable to the sender. Dunning letters are a key tool for collections teams because they help with staying on top of and preventing delinquent accounts. They can take a variety of physical forms, including regular mail, registered mail, overnight delivery, fax, email, or even a text message. Dunning letters are typically created by a computer without any human input at all, as the system would have been configured to use a specific set of text depending on the length of time since the invoice has been outstanding. There are separate dunning letters that you will write based on the days past due of the customer, and each letter will have a different tone, so the customer understands the seriousness of their delinquencies.