Dunning Cadence

What a dunning cadence is

A dunning cadence is a scheduled, escalating sequence of communications designed to collect an overdue account. The word "dunning" comes from a 17th-century English term for persistent pursuit of a debtor — the practice is as old as credit itself, but the modern approach is disciplined, measured, and designed to preserve commercial relationships while still applying effective pressure.

The cadence defines four things: timing (how many days after the due date each touchpoint occurs); channel (email, SMS, phone call, or formal written notice); tone (reminder, request, firm demand, or final notice); and sender (automated system, accounts team member, or senior person in the business). Each successive touchpoint escalates in one or more of these dimensions — it becomes more formal, more personal, or more consequential.

The value of a defined cadence is predictability and consistency. Businesses that chase debts ad-hoc — whenever someone remembers to — find that debtors learn this and exploit it. A debtor who knows your follow-up is sporadic has no incentive to prioritise your invoice. A debtor who receives a consistent, escalating sequence learns that ignoring you is a temporary strategy, not a permanent one.

Designing your cadence

There is no single cadence that works for every business. The right design depends on your payment terms, your customer mix, and your staff capacity. The following is an illustrative example for a business operating on 30-day payment terms — it is not prescriptive, and you should adapt it to your own circumstances:

• Day 1 overdue: Automated email reminder — polite, assumes good faith, provides invoice details and payment link. Tone: friendly.
• Day 7: Second automated email — slightly firmer, notes that the invoice is now one week overdue, restates payment details. Tone: matter-of-fact.
• Day 14: Personal phone call from the accounts team. The shift from automated email to a human voice is significant — most debtors respond differently to a direct conversation than to an inbox notification. The goal is to confirm receipt of the invoice and identify any barriers to payment.
• Day 21: Formal written notice — on company letterhead or equivalent, clearly stating the amount, the due date, that the account is now 21 days overdue, and the consequence of non-payment (interest accrual, referral to external recovery). Not a letter of demand — that comes later — but a firm and formal notice.
• Day 30: Final written notice — explicitly states that if payment is not received within a specified number of days (typically 7), the matter will be referred to an external recovery service. This is the final touchpoint before escalation.
• Day 45+: External referral decision point — at this stage, the account has been overdue for six weeks and your internal process has not produced payment. This is the natural escalation point.

If your terms are Net 14 rather than Net 30, compress this timeline accordingly. If your terms are Net 60, you have more runway, but the principle of escalation still applies.

Automated vs human touchpoints

Automated reminders are efficient, consistent, and scalable. They handle the volume of reminder activity that would be impossible to manage manually, and they do so without human fatigue or inconsistency — every customer gets contacted at the same interval, with the same message. For accounts under a certain threshold, automated reminders may be all you need.

But automated reminders have limits. An email can be ignored, filtered to spam, or simply missed. It cannot ask questions, receive answers, negotiate, or detect that the debtor is in genuine difficulty. Human follow-up is necessary for accounts above a certain value, for long-term customer relationships where the personal dimension matters, for accounts that have gone quiet (stopped responding to automated contact), and for any account where a dispute or payment arrangement conversation needs to happen.

The practical division: automate the early reminders for all accounts, then apply human follow-up selectively from Day 14 onwards based on account value and response pattern. For accounts under $2,000, automated escalation through to the final notice may be sufficient. For accounts over $10,000, personal phone contact should begin no later than Day 14.

Breaking cadence

Sometimes the most effective collection move is to break the cadence entirely — to bypass the next scheduled automated touchpoint and have a senior person in the business make direct contact. A call from a director or account manager, rather than from the accounts team, changes the dynamic in a way that weeks of email reminders cannot.

This works because it signals that the matter has escalated internally, that the business relationship itself is now at stake, and that someone with authority is personally engaged. Many debtors who have been successfully avoiding an accounts team will respond immediately to a call from a director.

Use this tool selectively. It is most effective for high-value accounts, for long-term relationships where the personal dimension is significant, and for accounts that have gone quiet after previously engaging. Breaking cadence for small, new, or non-responsive accounts dilutes the impact.

Segmenting your cadence

Not every customer should receive the same treatment. A cadence designed for a small, new customer with an unknown payment history should differ from the cadence for a high-value, long-term customer who has always paid on time until now.

Consider maintaining at least two variants of your cadence: a standard cadence for most accounts, and a relationship-aware cadence for customers where the commercial relationship has significant ongoing value. In the relationship-aware cadence, personal contact comes earlier and automated escalation comes later — the emphasis is on direct conversation before formal pressure.

Conversely, for known slow payers — customers whose history shows that they consistently pay 45 days late regardless of reminders — consider a more aggressive early cadence: contact on Day 1 of overdue, again on Day 5, and a phone call by Day 10. Starting earlier may mean collecting earlier. Some businesses build payment behaviour data into their accounts receivable system and automatically assign customers to the appropriate cadence based on their history.

Government and large corporate debtors often have their own procurement and payment processes that operate on longer cycles. A formal dunning cadence may not be appropriate here — early personal contact with the right accounts payable contact is typically more productive than a standard escalation sequence.

When cadence fails

If you have progressed through your full cadence — multiple automated reminders, personal phone calls, formal written notices — and the debtor has not paid or engaged credibly, the cadence has done what it can. Continuing to cycle through the same steps achieves nothing except delay and lost recovery probability.

No response to three or more escalating touchpoints is an active signal, not neutral silence. It means the debtor has decided not to engage voluntarily. At that point, the decision is whether to refer to an external recovery service, issue a formal letter of demand as a precursor to legal action, or write the debt off. Lesson 16 covers the mercantile agent option, and Lesson 17 covers provisioning and write-offs.