Dunning Fundamentals

Last verified with: 10.8.6.0

Overview #

Dunning in LogiSense Billing is the framework used to manage overdue invoices and enforce accounts receivable policies.

At a business level, dunning is the process of deciding what should happen when an invoice is approaching its due date, reaches its due date, or remains unpaid after it becomes overdue. That can include reminding the customer, applying late fees, attempting collection, changing account status, or triggering external actions.

This matters because receivables management is not just about recording that an invoice is unpaid. It is about giving the business a repeatable, controlled workflow for how to respond when payment is late.

What Dunning Is #

Dunning is the collection of rules and actions used to manage overdue receivables.

In LogiSense Billing, dunning is designed to support a staged workflow rather than a single one-time response. A business can define different actions that occur:

before an invoice due date,
on the due date,
or after the due date.

This allows the organization to move from reminders to penalties to stronger enforcement steps in a controlled and configurable way.

How Dunning Fits Into The Billing Model #

Dunning is part of the broader accounts receivable model in the platform.

The relationship works like this:

Payment Terms determine when an invoice is due.
AR Terms connect the payment term to the dunning rule set that should govern overdue behavior.
The Account is assigned an AR Term.
A Bill Run with the dunning process enabled executes those dunning rules when applicable.

This is important because dunning is not configured directly on each invoice. It is configured as a reusable policy that can be assigned to accounts through AR Terms.

AR Terms As The Dunning Anchor #

AR Terms are the structure that brings together invoice due-date behavior and overdue workflow behavior.

They define:

how due dates are set through payment terms,
and which dunning rule should apply if payment is not received on time.

This makes AR Terms a key policy layer in the receivables model. They let businesses define different receivables strategies for different kinds of customers without rebuilding those rules account by account.

For example, one AR Term might support a more lenient reminder-based workflow, while another might support tighter enforcement and faster escalation for a different customer segment.

How Dunning Rules Work #

Dunning Rules define the events and actions that should occur as invoices move closer to or farther past due.

Rather than configuring only one late-payment response, the platform supports multiple levels so businesses can create a progression of actions over time.

Those levels can be triggered:

prior to the due date,
on the due date,
or after the due date.

This staged approach is one of the key strengths of the platform. It allows organizations to create a practical receivables workflow that matches their policies and customer experience goals.

What Can Trigger A Dunning Action #

At a business level, dunning actions are driven by timing relative to the invoice due date and by whether other conditions are satisfied.

Examples include:

a reminder a set number of days before the due date,
a notice on the due date,
a late fee a certain number of days after the due date,
a status change after a deeper delinquency threshold,
or a payment attempt after the account has remained unpaid.

The platform can also enforce a minimum overdue balance before the dunning workflow applies, which helps avoid over-processing very small overdue amounts.

Dunning is not triggered just because an account shows a positive balance. Business-wise, the system asks a narrower question: “Does this account still truly owe money that is overdue after we account for credits and payments already in flight?”

In plain terms:

If the account’s outstanding amount is fully covered by pending payments, dunning does not start.
If the account has credits that the platform already recognizes as reducing what is owed, those credits are taken into account before deciding to dunn.
Dunning only proceeds when there is still an overdue amount left after those offsets are considered, and that amount meets the configured dunning threshold.

The important nuance is that not every “credit” a user might see conceptually is treated the same way by the system. Credits are considered only if they have been recorded in a form the billing engine uses in its balance calculations. So:

Applied or recognized credits: can prevent dunning.
Credits not yet posted or not yet reflected in the account balance logic: may not prevent dunning yet. As an example a credit set on the account that is configured for a future date and is not applied to the account yet.

A good business summary would be:

“An account enters dunning only when it has a real overdue balance after recognized credits and pending payments are taken into account. If a credit exists but has not yet been reflected in the account’s effective balance, dunning may still occur.”

Workflow Actions That Can Be Enabled #

One of the most important strengths of dunning in LogiSense Billing is that it supports a range of workflow actions, not just reminders.

Send Email #

The platform can send an email using a configured template when a dunning level is reached.

This is useful for:

reminder notices,
overdue notices,
final notices,
or other customer communication steps.

Benefit:

Supports a staged customer communication strategy.
Helps automate collections outreach.

Apply Late Fee #

The platform can apply late fees as part of the dunning process.

These can be configured as:

fixed fees,
or percentage-based fees.

Benefit:

Supports financial enforcement of late-payment policies.
Helps recover the cost of delayed payment.

Change Account Status #

A dunning rule can change the account status when a certain delinquency stage is reached.

This is especially useful where the business wants operational consequences tied to non-payment, such as moving an account into a suspended or restricted state.

Benefit:

Connects receivables policy to account lifecycle control.
Helps enforce business rules consistently.

Collect Invoice Balance #

In supported payment environments, dunning can attempt to collect the invoice balance using the account’s configured payment method.

This creates a much more direct collections workflow than simply notifying the customer and waiting for manual action.

Benefit:

Supports automated collections.
Improves cash flow and receivables recovery.

Send Webhook #

The platform can trigger an external webhook when a dunning level is reached.

This is valuable when the organization wants overdue events to drive external workflows, notifications, CRM updates, case creation, or other system integrations.

Benefit:

Extends receivables workflows beyond the billing platform.
Supports orchestration with external business systems.

How Dunning Interacts With Bill Runs #

Dunning rules do not execute in isolation. They run as part of the bill run process when the Run Dunning Process option is enabled.

This is a critical concept for customers to understand.

The platform does not simply look at overdue invoices continuously in the background and take action automatically at any moment. Instead, bill runs provide the operational execution point for those dunning workflows.

That means a bill run can be used to:

evaluate which invoices are due or overdue,
determine whether a dunning level should apply,
and execute the configured dunning actions.

Why This Matters Operationally #

This design gives businesses control over how receivables workflows are run.

Some organizations may want dunning to run as part of a broader billing cycle. Others may prefer to run it separately on a daily schedule as a focused collections process.

That flexibility is important because dunning often benefits from its own operating rhythm. The platform guidance and workflow design support the common best practice of running dunning as a dedicated bill run step, often on a recurring daily basis.

This allows the business to enforce receivables policies consistently without tying every dunning action to the full billing cycle.

Conditions For Dunning To Execute #

At a high level, dunning will only apply when the overall prerequisites are met.

This includes factors such as:

the account having AR Terms configured,
the AR Terms referencing an active dunning rule,
the invoice being in a suitable state for dunning processing,
the account not being canceled,
and the bill run having dunning enabled.

This helps ensure that dunning is governed by explicit configuration rather than applied unpredictably.

Why Dunning Is Configured In Layers #

The layered design of Payment Terms, AR Terms, Dunning Rules, and Bill Runs is intentional.

It gives businesses reuse and flexibility:

Payment Terms define due-date timing.
AR Terms package due-date behavior with overdue enforcement policy.
Dunning Rules define the actual escalation logic.
Bill Runs determine when those rules are executed operationally.

This is much more scalable than configuring overdue behavior one customer at a time or hard-coding one global collections policy for every account.

Telecom Examples #

Overdue Subscription Enforcement #

A telecom provider may want to:

send a reminder before the invoice due date,
send an overdue notice a few days after the due date,
apply a late fee after a longer delinquency period,
and suspend the account if non-payment continues.

This can be modeled as a staged dunning workflow under the account’s AR Terms and executed by scheduled bill runs.

Benefit:

Supports a clear and consistent collections lifecycle.
Helps protect revenue while giving customers multiple opportunities to pay.

Autopay Recovery Workflow #

A provider with automatic payment methods may want to retry collection after the due date rather than relying only on reminders.

Dunning can support that by triggering a balance collection attempt once the invoice has become overdue, alongside or instead of purely communication-based actions.

Benefit:

Improves recovery of overdue balances.
Reduces manual collections effort.

SaaS Examples #

Reminder To Enforcement Workflow #

A SaaS business may want a lighter-touch collections process for smaller accounts and a more structured escalation workflow for larger ones.

By assigning different AR Terms to different customer segments, the business can apply different dunning strategies while still using the same overall receivables framework.

Benefit:

Supports segment-specific receivables policies.
Improves flexibility without increasing operational complexity.

External Collections Or CRM Workflow #

A SaaS provider may want overdue events to trigger activity in external platforms such as CRM, support, or collections systems.

Using webhook-based dunning actions, the billing platform can signal those events to external workflows when delinquency reaches the configured level.

Benefit:

Connects receivables events to broader customer operations.
Helps create more integrated finance and customer-success workflows.

Why Customers Value This Capability #

Customers value dunning because it turns overdue receivables from a passive reporting problem into an active operational process.

Instead of simply knowing an invoice is overdue, they can define:

when reminders should be sent,
when fees should be applied,
when account status should change,
when payment should be retried,
and when external systems should be notified.

That makes receivables management more disciplined, more automated, and easier to align to company policy.

The Bigger Business Benefit #

Dunning in LogiSense Billing is not just a late fee feature. It is a receivables workflow framework.

It helps organizations combine due-date policy, collections communications, financial penalties, operational enforcement, and automation into one governed model.

That means the business can define how overdue accounts should be handled, reuse that policy across customer segments, and execute it consistently through bill runs as part of a broader quote-to-cash or bill-to-cash operating model.

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