In a world where digital processes are increasingly becoming the norm, scalable and intelligent solutions are essential for finance operations. This is exactly where KLEVERBILL comes in: a high-performance, cloud-based enterprise software platform that automates, structures, and sustainably improves receivables management, dunning, credit management, and the entire accounts receivable function.

With more than 25 years of experience in receivables management and a team of lawyers, legal specialists, and subject-matter experts, KLEVERBILL offers not just software, but a complete back-office concept for your company. In this article, we cover all relevant topics that make KLEVERBILL a leading solution for modern businesses.

What is dunning?

Through dunning, you as a business owner collect overdue payments that your customers owe you. The dunning process typically starts with a friendly payment reminder and progresses through several escalation stages up to court action or assignment to a debt collection provider such as KLEVERBILL.

The goal of dunning is to recover outstanding receivables quickly and, wherever possible, without legal disputes—professionally, legally compliant, and customer-oriented.

What should you do if the customer does not pay?

If a customer does not respond to a friendly payment reminder, the next logical step is a formal reminder. This process is called dunning. In English, this is referred to as a "payment reminder."

Typical out-of-court dunning workflow:

1. Payment reminder: A few days after due date, politely worded

2. 1st reminder: More direct, with a new payment deadline

3. 2nd reminder: Includes a reminder fee and notice of possible debt collection measures

4. Final reminder: Announces legal action or handover to debt collection

Important: A clear structure and defined deadlines improve recovery rates and reduce DSO. KLEVERBILL automates exactly these stages—securely, scalably, and in full legal compliance.

Payment reminder vs. formal reminder – what is the difference?

From a legal perspective, a payment reminder and a formal reminder are equivalent. In practice, however, a distinction is typically made:

• Payment reminder: Polite, customer-oriented, without reminder fee

• Formal reminder: More assertive, often includes a reminder fee, with escalation potential

KLEVERBILL enables automated payment reminders—aligned with your corporate design, personalized salutation, and individualized due date.

Dunning by email – is it valid?

Yes. A reminder can also be sent by email and is legally valid. Verbal reminders are also permitted, but difficult to prove.

Benefits of email reminders with KLEVERBILL:

• Automated dispatch

• Traceability and logging

• Fast, cost-efficient, and environmentally friendly

For sensitive or particularly high-value receivables, additional delivery by registered mail is recommended.

If the customer still does not pay – debt collection or lawyer?

If even the final reminder remains unsuccessful, companies have two options:

• Appoint a debt collection agency: For example with KLEVERBILL, including out-of-court settlement, court payment order, enforcement, and international receivables management.

• Engage a lawyer: For attorney letters or in complex legal situations.

KLEVERBILL offers both—software and experienced legal professionals under one roof.

Court dunning procedure – how it works

1. Application for issuance of a court payment order at the local court

2. The debtor has 14 days to file an objection

3. If no objection is filed: enforcement order is issued

4. A bailiff can be instructed to initiate enforcement measures

KLEVERBILL supports you digitally and automatically—including an interface to the judiciary’s online dunning procedure.

Debtor default pursuant to Section 286 German Civil Code (BGB)

A debtor is in default if payment is not made despite due date—and you have placed them in default by issuing a reminder. Only then are you entitled to:

• Default interest

• Damages

• Debt collection costs

Exceptions: No reminder required if…

• A fixed payment date was contractually agreed

• The debtor seriously and definitively refuses payment

• Performance is objectively no longer possible

KLEVERBILL automatically checks deadlines and, when required, generates reminder letters that meet all legal requirements.

Reminder costs – How do I calculate reminder fees?

Businesses may charge reminder fees from the second reminder onward. However, these must be reasonable.

Typical amounts are:

• €2.50–€5 for the 2nd reminder

• Up to €10 for the 3rd reminder (final reminder)

Only actual costs such as postage, paper, and printing are reimbursable. Default interest, on the other hand, is regulated by law:

• For consumers: base rate + 5%

• For companies: base rate + 9%

You can review these on the Bundesbank website: Bundesbank 

KLEVERBILL calculates reminder fees and interest automatically and in a legally compliant manner.

Why KLEVERBILL is the ideal dunning tool

• Automated reminder stages with individual deadlines

• Brand-compliant reminder letters in your company’s name

• Debt collection integration with in-house legal service provider

• Court dunning procedures & title monitoring integrated

• Transparency, traceability, and audit-proof documentation

KLEVERBILL digitizes and streamlines your dunning process—from the first reminder to enforcement.

Digitize dunning professionally with KLEVERBILL

Whether payment reminders, formal reminders, or court action—KLEVERBILL provides all tools you need to recover outstanding receivables quickly, professionally, and in full legal compliance.

You save time, reduce costs, improve liquidity, and maintain professional communication with your customers at the same time.