Dunning

AAA

DEFINITION of 'Dunning'

Making insistent demands for the payment of a debt. Dunning, in the business context, refers to the collections process, whereby a business communicates with customers who have fallen behind in paying their bills. The term is believed to have originated in the 17th century.

INVESTOPEDIA EXPLAINS 'Dunning'

The degree of dunning that a business may resort to depends on several factors, including the amount of the debt, the relationship with the errant borrower and the length of time for which the payment is overdue. While payments from clients for goods supplied or services rendered are generally processed by the accounts receivable department, overdue payments may be turned over to the collections department.


The process of dunning would then involve the collections department issuing several reminders over a period of time to the party from which payment is overdue. Unless payment is received, the tone of communications in such cases may get progressively more aggressive, with the company ultimately threatening to take legal action and/or turning the matter over to a collections agency.


Most jurisdictions restrict the tactics that can be used by companies and collection agencies to collect overdue payments, with intimidation and coercion being among the prohibited devices.

RELATED TERMS
  1. Pay/Collect

    An abbreviated reference to the payment or collection of funds ...
  2. Average Collection Period

    The approximate amount of time that it takes for a business to ...
  3. Collection Agency

    A company hired by lenders to recover funds that are past due ...
  4. Accounts Receivable - AR

    Money owed by customers (individuals or corporations) to another ...
  5. Receivables Turnover Ratio

    An accounting measure used to quantify a firm's effectiveness ...
  6. Satisfaction And Release

    Formal paperwork stating that a consumer has paid the full amount ...
RELATED FAQS
  1. How does quantifying fixed overhead volume variance show whether a company is profitable ...

    Fixed overhead volume cannot definitively prove a company is profitable, but it can be used to provide an excellent indication ... Read Full Answer >>
  2. What is price variance in cost accounting?

    Price variance in cost accounting is the difference between the actual price paid by a company to purchase an item and its ... Read Full Answer >>
  3. When do I need to project run rates for my business?

    A business might project a run rate if it needs to evaluate potential future outcomes. Common scenarios where a run rate ... Read Full Answer >>
  4. How can a growing business avoid stagnation when using zero-based budgeting?

    Zero-based budgeting is commonly used by companies to review expenses in their annual budgets and create cost management ... Read Full Answer >>
  5. How does zero-based budgeting help lower operating costs?

    Zero-based budgeting helps lower costs by reducing unproductive spending. Zero-based budgeting is a rigorous process that ... Read Full Answer >>
  6. What are the revenue recognition criteria in accrual accounting?

    The major advantages of zero-based budgeting are flexible budgets, focused operations, lower costs and more disciplined execution, ... Read Full Answer >>
Related Articles
  1. Credit & Loans

    Fighting Back Against Collection Lawsuits

    There are still options available to those being pursued by a creditor.
  2. Budgeting

    Negotiating A Debt Settlement

    If you're being harassed by a debt-collection agency, you can take charge. Find out how.
  3. Entrepreneurship

    Small Business: Speed Up Receivables To Avoid A Cash Crunch

    Waiting for customers to pay can be a losing game. Look to factoring for quicker cash.
  4. Credit & Loans

    A Guide To Debt Settlement

    Find out how you can negotiate your way to a lower debt load by paying up front.
  5. Credit & Loans

    What is an Unsecured Loan?

    An unsecured loan is based on the creditworthiness of the borrower, and has no collateral securing the loan.
  6. Economics

    Explaining the Cash Budget

    A cash budget is a plan for the inflows and outflows of cash for a business or an individual.
  7. Budgeting

    10 Worst And Best Vacation Cities In The U.S.

    The many costs of planning a vacation will put a stress on most people’s finances, but where you choose to go can be what really makes your travel budget.
  8. Economics

    What's Involved in Customer Service?

    Customer service is the part of a business tasked with enhancing customer satisfaction.
  9. Economics

    What is Involved in Inventory Management?

    Inventory management refers to the theories, functions and management skills involved in controlling an inventory.
  10. Budgeting

    Top 6 Money Management Apps For 2015

    Spenders who should be keeping better track of their cash flow will benefit the most from these money management apps.

You May Also Like

Hot Definitions
  1. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  2. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  5. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  6. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
Trading Center