An effective dunning process is essential for companies of any size. It secures liquidity, reduces payment defaults, and improves customer relationships—when implemented professionally. In this article, we explain which dunning stages exist, how they are structured and why a structured dunning process saves real money. We also show you, using two meaningful statistics, why regular payment reminders are worthwhile and how much more cost-effective a digital solution like KLEVERBILL is compared with a dedicated staff position.

Why dunning stages are important

A clearly defined dunning process ensures that invoices are not forgotten and that debtors are reminded to pay in a systematic manner. Dunning stages structure this process — from a friendly notice to the final payment demand. Companies that apply dunning stages correctly achieve higher collection rates while maintaining customer relationships.

Overview of the 3 classic dunning stages

1. First reminder – Friendly payment notice

• Timing: 5–10 days after due date

• Tone: Polite and factual

• Objective: Reminder of a possible oversight

Example:

"Dear Ms. Müller, we would like to remind you that invoice no. 2024-101 dated 12/06/2025 in the amount of €1,200 was due for payment. Please transfer the outstanding amount within the next 7 days."

2. Second reminder – Firm reminder

• Timing: 10–15 days after the first reminder

• Tone: More assertive, but respectful

• Objective: Clear request for payment

Example:

"Despite our first reminder, we have not been able to identify receipt of payment. We therefore ask you to settle the outstanding amount of €1,200 by 30/07/2025 to avoid further measures."

3. Third reminder – Final notice before collections

• Timing: 10–14 days after the second reminder

• Tone: Clear, with notice of further steps

• Objective: Last opportunity for an out-of-court settlement

Example:

"This is our final payment demand. If the outstanding amount of €1,200 is not received by 10/08/2025, we will forward the matter to our debt collection agency for further processing."

Statistic 1: Regular dunning pays off

Conclusion: Companies that consistently follow a fixed dunning schedule receive their money significantly faster. With an automated dunning system like KLEVERBILL, dunning stages can be implemented efficiently—without any additional workload.

Statistic 2: KLEVERBILL vs. internal personnel costs

Insight: KLEVERBILL is not only more efficient, but also over 95% more cost-effective than hiring a full-time employee for accounts receivable management. In addition, you minimize errors and save time.

Conclusion & recommended action

An effective dunning process is built on a clearly structured stage model. With communication that is friendly, assertive, and ultimately consistent, you improve payment discipline. At the same time, substantial costs can be saved through automation with KLEVERBILL.