Overview

Overdue payments can impact cash flow. iVendNext’s Dunning feature helps by sending reminders to customers with unpaid invoices. This article explains how to use it to collect payments on time and maintain good customer relations.

1. What is Dunning?

Dunning is the process of systematically reminding customers to pay their overdue invoices. In iVendNext, dunning is a document that stores and sends persistent payment demands to customers with unpaid sales invoices. The dunning process typically involves:

• Sending Reminders: Notifying customers of overdue payments via email or other communication channels.

• Charging Fees: Applying interest or dunning fees to overdue amounts as per predefined terms.

• Tracking Status: Monitoring the status of overdue payments and resolving them promptly.

Dunning helps businesses reduce payment delays, improve cash flow, and maintain professional relationships with customers.

2. Prerequisites for Using Dunning in iVendNext

Before using the dunning feature, ensure the following are set up in iVendNext:

1. Sales Invoice: Create and finalize the sales invoice for which payment is overdue.

2. Dunning Type: Define dunning types to pre-fill interest rates, fees, and text blocks in dunning documents.

3. How to Create a Dunning Document in iVendNext

Creating a dunning document in iVendNext is a simple process. You can create a dunning document in two ways:

3.1 Creating a New Dunning Document

1. Navigate to Home > Accounting > Dunning.

2. Click on Add Dunning.

3. Select the Customer and click Fetch Overdue Payments.

4. The system will display a list of overdue sales invoices for the selected customer.

5. Select the invoices you want to include in the dunning document and click Get Items.

3.2 Creating a Dunning Document from an Overdue Sales Invoice

1. Navigate to the Sales Invoice list and open the overdue invoice.

2. Click on Create > Dunning.

3. The system will automatically fetch all overdue payments from the invoice’s payment schedule into a new dunning document.

4. Filling Out the Dunning Document

Once the dunning document is created, follow these steps to complete it:

4.1 Select a Dunning Type

• Choose a predefined Dunning Type to automatically fill in interest rates, dunning fees, and text blocks.

• If no dunning type is selected, you can manually enter these details.

4.2 Set Income Account and Cost Center

• Assign an Income Account (e.g., "Other Interest Income") and Cost Center for the interest and fees generated from the dunning process.

• These will be used when creating a payment entry from the dunning document.

4.3 Save and Submit

• Save the dunning document and click Submit to finalize it.

• Once submitted, you can send the dunning document to the customer.

5. What is a Dunning Type?

A Dunning Type is a template that stores default values for dunning fees, interest rates, and text blocks. For example:

• First Notice: A gentle reminder with no fees or interest.

• Second Notice: A more formal reminder with a dunning fee and interest charged on the overdue amount.

• Final Notice: A stern reminder with higher fees and interest.

Using dunning types saves time and ensures consistency in communication with customers.

6. Managing Dunning Statuses

iVendNext automatically assigns statuses to dunning documents, making it easy to track their progress:

• Draft: The dunning document is saved but not yet submitted.

• Unresolved: The dunning document is submitted, but no payments have been received.

• Resolved: The overdue payment, including interest and fees, has been received.

• Cancelled: The dunning document is cancelled.

7. Processing Payments from Dunning Documents

When a customer makes a payment, you can process it directly from the dunning document:

1. Open the Unresolved dunning document.

2. Click on Create > Payment.

3. The system will generate a Payment Entry for the overdue amount, including interest and fees.

4. The dunning document’s status will automatically change to Resolved.

8. Benefits of Using the Dunning Process in iVendNext

Using the dunning process in iVendNext offers several advantages:

1. Improved Cash Flow: Ensures timely collection of overdue payments.

2. Automated Reminders: Reduces manual effort by automating payment reminders.

3. Professional Communication: Maintains professional relationships with customers through structured communication.

4. Transparency: Provides a clear record of all dunning activities and payment statuses.

9. Important Points To Remember

Some of the key points to remember are:

• Set Clear Payment Terms: Define clear payment terms and communicate them to customers upfront.

• Use Dunning Types: Create predefined dunning types for consistent and efficient communication.

• Monitor Dunning Statuses: Regularly check the status of dunning documents and follow up on unresolved cases.

• Leverage Email Alerts: Use iVendNext’s email alert feature to notify customers of overdue payments.

10. Example Use Case: Sending a Second Notice

Let’s walk through an example of sending a Second Notice to a customer with an overdue invoice:

1. Navigate to Home > Accounting > Dunning.

2. Click on Add Dunning.

3. Select the customer and click Fetch Overdue Payments.

4. Choose the overdue invoice and click Get Items.

5. Select the Second Notice dunning type, which automatically applies a dunning fee and interest rate.

6. Save and submit the dunning document.

7. Send the dunning document to the customer via email.

11. Troubleshooting Common Issues

Here’s a quick look at some common issues you might run into.

• Dunning Document Not Created: Ensure the sales invoice is overdue and properly finalized.

• Incorrect Fees or Interest: Double-check the dunning type settings.

• Payment Not Recorded: Verify that the payment entry is created from the dunning document.