Dunning and payment reminders
Liquidity of the company is the A&O
But what to do if the customer does not pay your invoice?
What is a dunning and how to write it?
Am I obliged to send a reminder for an open invoice? Does the payment reminder document have to meet certain requirements?
A dunning is a written notice sent to a debtor to remind them of an outstanding payment. It is usually created by a creditor, such as a company or individual, and sent to the debtor when an invoice or amount due has not been paid on time.
How to start your dunning process
When should you send a payment reminder?
A payment reminder or even a reminder should be created if a payment has not been received after the agreed payment deadline or payment period.
Usually, this is the case when an invoice or amount due has not been paid on the due date specified in the invoice or contract.
It is important to note that reminders should generally be used as the last step before taking legal action to collect debts, after other methods of communication such as payment reminders or friendlier reminders have not been successful.
What does a legally compliant dunning look like?
For example, can dunning costs be charged?
In principle, it is common practice in many countries to charge reminder fees if a customer does not pay an invoice on time.
Dunning fees are additional charges levied to cover the costs of dunning and the administrative work involved in pursuing unpaid invoices. However, the exact regulations and level of dunning fees may vary from country to country and from company to company.
It is important to note that reminder fees should generally be reasonable and must comply with applicable laws and regulations.
It is advisable to check the legal regulations in your country and/or region before charging reminder fees and ensure that you meet all the necessary requirements.
It is also advisable to include clear payment terms and payment deadlines in your invoices to minimize misunderstandings or delays in payment.
How can dunning fees be calculated?
The exact calculation of dunning costs can vary depending on the company and the applicable laws and regulations in different countries or regions. In general, however, there are some common methods to calculate dunning costs:
Flat fee
Percentage of the outstanding amount
Questions related to reminder fees
We have summarized the most important questions about payment reminders and dunning letters for you here.
In easybill, you can use the automatic dunning system when using the BUSINESS membership and define your own rules for the dunning process. Both payment reminders and reminder fees can thus be automated.
Above all, you should check the requirements that are customary in the country. However, the last resort would be to transfer the receivable to a collection agency. In easybill, it is possible to transfer a receivable to the collection agency mediaFinanz with just a few clicks.
There is no legal requirement for the start of the dunning process. You should check the agreed payment terms and be guided by them. If the payment deadline, i.e. the date by which the invoices should be paid, has been exceeded, you can start the dunning process promptly.
