Dunning in ERPNext (Payment Reminder System)
A Dunning document in ERPNext is used to send persistent reminders to customers for overdue payments against unpaid Sales Invoices.
Dunning helps automate debt collection by adding reminders, interest charges, and fees for overdue invoices.
Access Path
Home > Accounting > Dunning
1. Prerequisites
Before creating a Dunning, ensure:
- Sales Invoice exists
- Invoice is overdue
- Dunning Type is created (for fees, interest, and message templates)
2. What is a Dunning Type?
A Dunning Type defines default rules for reminders:
- Interest rate on overdue amount
- Dunning fees (fixed charges)
- Message templates for communication
Example:
- First Notice → No fee, polite reminder
- Second Notice → Interest + penalty charges
3. How to Create a Dunning
There are two ways to create a Dunning:
Option 1: From Dunning List
- Go to Dunning list
- Click Add Dunning
- Select Customer
- Click “Fetch Overdue Payments”
- Select invoices and click “Get Items”
- Save and Submit
Option 2: From Sales Invoice
- Open overdue Sales Invoice
- Click Create > Dunning
- System fetches overdue payment schedule automatically
- Save and Submit
4. Dunning Workflow
- Draft → Created but not sent
- Unresolved → Sent but unpaid
- Resolved → Payment received
- Cancelled → Invalid or stopped process
5. Payment Handling
When payment is received:
- Open Dunning document
- Click Create > Payment
- ERPNext generates Payment Entry
- Includes interest + dunning fees automatically
- Status becomes “Resolved”
6. Accounting Impact
Dunning affects accounting in the following ways:
- Interest is booked as income
- Fees are recorded as additional income
- Customer receivable remains open until payment
7. Example Scenario
A customer has an overdue invoice.
- First reminder → No charges
- Second reminder → Interest applied
- Third reminder → Interest + penalty fees
ERPNext tracks all reminders and automates escalation.
8. Summary
Dunning in ERPNext is a structured debt collection tool that automates payment reminders, interest calculation, and fee application for overdue invoices, improving cash flow management.
