Design a dunning cadence

When to run this

Run this play with a client whose collections are improvised — each overdue account handled differently, depending on who notices and how they feel about the customer. The result is inconsistency: some accounts are chased hard, others drift for months, and customers learn they can pay this supplier late without consequence. A dunning cadence is the documented sequence of steps and timings that an overdue account follows, so collections becomes a process rather than a series of one-off judgements.

It builds on automated reminders and the AR routine by mapping the whole journey — including the firmer, human-led steps and the point of no return where the account leaves the business for recovery.

The play (steps)

Help the client write down the cadence end to end:

1. Step one: the early reminder. Soon after the due date, a polite reminder with the invoice attached, catching genuine oversights.
2. Step two: the follow-up. A firmer reminder a short interval later, making the overdue status and the amount unmistakable.
3. Step three: direct contact. A phone call or personal email to engage the customer and uncover any dispute or difficulty.
4. Step four: the warning. A clear notice of consequences — such as a hold on further supply and the prospect of referral — with a firm deadline.
5. Step five: stop-supply. Pause further credit so the business stops adding to its exposure.
6. Step six: referral. At a defined point, hand the matter to recovery rather than continuing to chase indefinitely.

What good looks like

A well-designed cadence means every overdue account walks the same path, on the same timeline, regardless of who is handling it. Customers receive consistent, escalating signals that this supplier follows through, which itself improves payment behaviour. Nothing drifts, because each step has a trigger and a deadline. And crucially, there is a defined end: an account that ignores the whole sequence is referred for recovery at a known point, rather than being chased forever or quietly forgotten.

That final handoff runs through refer a debt, so the account moves cleanly from in-house chasing to professional recovery.

What to say to the client

Explain the consistency dividend: “When collections is improvised, customers quickly work out who actually follows up and who lets things slide — and they pay accordingly. A set cadence means every overdue account gets the same firm, professional sequence, so you become the supplier people pay on time. It also means you're not agonising over each account; you're just following the steps.”

Emphasise the value of a defined endpoint: the cadence protects the relationship by being measured, while still guaranteeing that a genuinely bad account is acted on rather than tolerated.

Common mistakes

The first mistake is a cadence with no timings, so “follow up later” never actually happens. The second is one that escalates in tone but never in action — endless reminders with no stop-supply and no referral, which customers soon learn to ignore. The third is having no defined endpoint, so bad debts circle in the reminder loop indefinitely. A real cadence has dated steps, a stop-supply trigger, and a clean exit to recovery.