A dunning letter, also known as a collection letter or past due notice, is written to inform customers that they have an overdue invoice and how to correct the issue. A well written dunning letter can be an extremely effective tool for any business who invoices customers for products/services. Writing dunning letters is not necessarily hard to do, but there are some secrets that can help you increase the likelihood that your dunning letter will result in customer payment.

Below, we list a few of these tips on writing effective accounts receivable dunning letters and how to execute them.


Writing an effective dunning letter hinges on the accuracy of the data you use to create it. That means having the correct contact information, mailing address, purchase order information, payment deadlines, terms, etc. If you send a letter with incorrect information it, you risk it not ever making it to the customer, confusing the customer, and looking unprofessional.


Your customer is likely not going to spend a lot of time reading and dissecting your dunning letters. If they are unsure what you’re trying to say, they will probably put it to the side to “figure it out later,” so who knows when they will actually get to it and all the while the invoice continues to go beyond terms. Keep your letters short and to the point using common language, not industry or accounting jargon.


What do you want the customer to do after they open your dunning letter? Of course you know that you want them to pay you as soon as possible and they probably do too, but you should tell them exactly how and when. For example, do not say the customer needs to send a check “seven days after receipt of this letter,” use a date instead such as, “by December 15, 2015.” Then there is no confusion about when the letter was actually received. If they have questions, let them know they should call you right away, always being sure to include your contact info.


With all of the other tasks you need to get done in the day, finding the time to write and send dunning letters can be tough which is probably why so many companies do not do this regularly. Make it easier on yourself by getting rid of spreadsheets to make finding information easier and consider getting rid of paper. By emailing dunning letters you can get them there faster and be more consistent in delivering them. Especially when you can automate the process.


While making the process easy for you is important, making it easier for your customers pay you after receiving the letter is even more so since this will encourage them to take action right away. Some of the ways to make it easier for customers to pay you include giving them a choice about how they want to pay you; for example, calling with a credit card, mailing a check, or submitting payment online. You should also make it easy for them to contact you with questions or to pay over the phone by clearly providing your email address, phone number, and physical address at the bottom of each letter.

It’s always to match the message to the situation. You don’t want to send nonchalant dunning letters to customers who are grossly beyond terms or who owe a significant amount of money; just like you don’t want to send an aggressive letter to a customer who is just a few days beyond terms.