Payment Reminders & Dunning Management
Automated multi-stage dunning process for efficient receivables management
ContactTransform Your Payment Process
Late payments are one of the most persistent challenges in business, affecting cash flow, planning accuracy, and ultimately the financial health of your organization. The Nuxbe Payment Reminders module transforms the often uncomfortable and time-consuming task of chasing overdue invoices into a professional, automated process that protects your cash flow while maintaining positive customer relationships. By implementing a structured, consistent approach to payment collection, you ensure that following up on overdue accounts becomes a routine business process rather than an occasional crisis response.
Manual dunning processes are fraught with problems: reminders get forgotten, escalation timing is inconsistent, documentation is incomplete, and the tone of communication can vary wildly depending on who handles each case. These inconsistencies not only reduce collection effectiveness but can also damage customer relationships or create compliance risks. Nuxbe eliminates these issues by providing a fully automated, configurable dunning system that ensures every overdue invoice receives appropriate, timely follow-up with professional communication that balances firmness with courtesy.
The system integrates seamlessly with your order management and accounting modules, automatically monitoring invoice due dates and payment status. When payments become overdue, the dunning process initiates automatically, progressing through escalation levels based on your configured rules and timelines. Throughout the process, complete documentation is maintained, payment tracking is updated in real-time, and your team has full visibility into collection status across all customers. This automation frees your staff from the tedious work of tracking overdue accounts while ensuring nothing falls through the cracks.
Key Features
Powerful tools designed to streamline your payment collection
Multi-Stage Dunning Process
The core of effective receivables management is a structured escalation process that gradually increases pressure while providing customers multiple opportunities to resolve payment issues. Nuxbe supports fully configurable dunning levels, typically structured as first reminder (friendly payment request), second reminder (more urgent with potential late fees mentioned), third reminder (final notice before legal action), and optional subsequent stages for collection agency referral or legal proceedings. Each stage has its own timeline, messaging, and consequences.
What makes this system particularly effective is its consistency and inevitability. Customers quickly learn that overdue invoices will receive systematic follow-up, encouraging prompt payment. The automated nature ensures that even during busy periods, vacation times, or staff changes, the dunning process continues uninterrupted. Each reminder level can be customized with specific waiting periods after the previous stage, allowing you to balance collection urgency with customer relationship considerations. For example, you might wait 7 days after the due date for the first reminder, 14 days for the second, and 21 days for the final notice.
Automated Escalation Engine
The automation engine is the workhorse of the dunning system, continuously monitoring all open invoices and automatically advancing them through escalation stages based on your configured rules. Every day, the system evaluates which invoices have reached the next escalation threshold and generates the appropriate reminders without any manual intervention. This includes generating professional reminder documents with updated payment information, calculating any applicable late fees or interest charges, and sending communications via email with PDF attachments that customers can print and process.
The intelligence built into the escalation engine goes beyond simple date calculations. It respects payment arrangements, automatically pausing the dunning process when partial payments are received, and restarting at the appropriate level based on remaining balances. If you have special customer relationships requiring manual approval before certain escalation stages, the system can be configured to require authorization before proceeding. Holiday scheduling ensures reminders arent sent on non-business days when customers cannot act on them. The result is a dunning process that feels intelligent and respectful rather than robotic and inflexible.
Payment Tracking & Reconciliation
Effective dunning requires accurate, up-to-date information about what customers actually owe. The payment tracking system maintains real-time awareness of all invoice payments, partial payments, credit notes, and adjustments. When payment is received for an invoice in the dunning process, the system immediately recognizes this, cancels scheduled reminders, and updates the customers account status. This prevents the embarrassing and relationship-damaging scenario of sending payment reminders for invoices that have already been paid.
The system also handles complex payment scenarios gracefully. If a customer makes a partial payment, the dunning process adjusts to reflect the reduced balance while continuing to follow up on the remainder. When multiple invoices are overdue for a single customer, the system can be configured to send consolidated reminders that clearly show all outstanding amounts rather than bombarding the customer with separate notices. Payment allocation rules ensure that when customers pay amounts without specifying which invoices theyre addressing, funds are applied appropriately and dunning status updates accordingly.
Legal Compliance & Documentation
Dunning processes are subject to legal requirements that vary by jurisdiction, and non-compliance can create serious liabilities. Nuxbe helps you stay compliant by ensuring all dunning communications meet legal standards. Reminder templates can be configured to include required legal notices, such as information about late payment fees, interest rates, collection costs, and customer rights. The system maintains complete audit trails showing exactly what was communicated to customers and when, providing documentation that can be critical if disputes arise or legal action becomes necessary.
Beyond basic compliance, the documentation system creates a complete history of the collection process for each invoice. This history includes all reminder notices sent, their exact content and timing, any customer responses or communications, partial payments received, and any manual interventions by your staff. This comprehensive record protects your business interests by demonstrating that you followed proper procedures and made reasonable efforts to collect payment before escalating to more serious measures. The documentation also helps identify patterns—customers who consistently pay only after specific reminder levels, for example—allowing you to adjust credit terms or payment requirements for those accounts.
Real-World Applications
B2B Company with Net 30 Terms
A wholesale distributor sells to hundreds of retail businesses on net 30 day payment terms. Before implementing automated dunning, their accounts receivable staff spent hours each week manually reviewing aging reports, deciding whom to contact, drafting emails, and following up. Some customers received multiple reminders while others were inadvertently overlooked. The inconsistent approach resulted in average collection times of 45-50 days and uncomfortable conversations when customers received conflicting messages from different staff members.
After implementing Nuxbes automated payment reminder system, the process transformed completely. Now, every customer receives their first friendly reminder exactly 7 days after an invoice becomes overdue, with no exceptions and no manual effort required. The reminder professionally references the specific invoice, includes a PDF copy for convenience, and provides easy payment options. Customers who dont respond receive progressively firmer reminders at day 14 and day 21. The consistency and inevitability of this process has trained customers to pay more promptly, reducing average collection time to 35 days while freeing the accounting team to focus on exceptions and customer service rather than routine follow-up. Customer relationships have actually improved because the automated system is never emotional or confrontational—just professional and consistent.
Service Provider with Project-Based Billing
A consulting firm bills clients for completed project milestones and monthly retainers, creating a complex mix of invoice types and payment schedules. Some clients pay reliably, others require consistent follow-up, and a few habitually wait until the third reminder before paying. Without automation, tracking which clients needed reminders and at what escalation level was overwhelming, especially across multiple project managers who each had their own client communication styles.
The automated dunning system brings order to this chaos. Project managers no longer worry about payment follow-up because the system handles it automatically with appropriate escalation timing. They receive notifications when their clients accounts reach higher dunning levels, allowing them to personally intervene if customer relationships warrant it, but theyre freed from routine reminder tasks. The complete dunning history for each client becomes valuable information for future engagements—the sales team can see payment behavior patterns when negotiating terms for new projects, and credit approval can factor dunning history into payment term decisions. The system has also helped identify clients whose payment delays justify adjusting engagement models to require advance payment or shorter billing cycles.
E-commerce Retailer with Invoice Payment Option
An online retailer offers invoice payment options to business customers as an alternative to credit card payment at checkout. While this flexibility helps close sales with businesses that prefer traditional invoicing, it creates receivables management challenges. When the company relied on manual dunning, the labor required to follow up on late payments often exceeded the profit margin on smaller orders, and some overdue amounts were simply written off as not worth pursuing.
Automated payment reminders changed the economics of offering invoice terms. Now, every unpaid invoice receives systematic follow-up regardless of amount, with zero marginal cost beyond system overhead. The three-stage reminder process (friendly reminder at day 7, firmer notice at day 14, final warning at day 21) successfully collects on most invoices by the second reminder. For customers who reach the third stage repeatedly, the system flags their account for credit review, leading to automatic switching to payment-in-advance terms for future orders. This automation has dramatically reduced write-offs while allowing the company to continue offering the competitive advantage of invoice terms to reliable payers. The professional, consistent reminder communications have even earned compliments from customers who appreciate the clear, non-aggressive approach to payment follow-up.
Technical Capabilities
The payment reminder system is built on a robust scheduling engine that evaluates dunning eligibility and processes escalations through batch jobs that run at configured intervals—typically daily, but adjustable based on business requirements. The engine implements sophisticated business rules that account for payment terms, grace periods, holidays, customer-specific exceptions, and payment arrangement schedules. State machine logic ensures that each invoice can only progress through valid dunning state transitions, preventing errors like sending a third reminder before a second reminder, or resuming dunning for an invoice that has been paid.
Template management for reminder documents uses the same powerful PDF generation engine as other Nuxbe documents, supporting full customization of layout, content, and branding for each dunning level. Templates can include conditional content based on customer attributes, invoice characteristics, or dunning history—for example, showing different payment instruction for domestic versus international customers, or adding late fee calculations only at certain escalation stages. Multi-language support ensures that customers receive reminders in their preferred language. The template system also supports different communication channels, from email with PDF attachments to postal mail generation for customers without email addresses.
Integration with the broader Nuxbe ecosystem ensures that dunning status influences other business processes appropriately. Customer credit holds can be automatically triggered when accounts reach certain dunning levels, preventing new orders from customers with seriously overdue balances. Sales team notifications alert account managers when important customers enter dunning processes, enabling proactive customer relationship management. Financial reporting includes comprehensive accounts receivable aging analysis that factors in dunning status, helping management understand not just how old receivables are, but how far through the collection process they have progressed. APIs and webhooks enable integration with external collection agencies or legal service providers for accounts that exhaust internal dunning processes, facilitating seamless handoff with complete documentation.
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