Dunning Process by Customer

You select the By Customer option in the Dunning Process box on the Dunning tab of the Accounts Receivable Preferences (AR101000) form to define that the system groups overdue documents by customer account when it prepares dunning letters.

In general, you prepare dunning letters as follows:

1. You select the customer accounts for which you want to prepare dunning letters and initiate the preparation. For details, see Letter Preparation.
2. You print or send by email the prepared dunning letters, as described in Letter Previewing and Sending.

In this topic, you will read about the letter generation rules, the dunning process workflow, and the way the system changes the status of the dunning letter.

Dunning Letter Generation Rules

When you group overdue documents by customer account, the generation of the letters is based on the following rules:

• The letter of the first level is generated for a customer account if the customer has at least one invoice or memo whose number of days past the due date exceeds the number of days specified for the first level in the Days Past Due box on the Dunning tab of the Customer Classes (AR201000) form. The document is marked with the first dunning level when you initiate letter preparation.
• The letter of the second level is generated if the customer has at least one document with the first level that is still unpaid and the number of days this document is past due exceeds the number specified for the second level in the Days Past Due box. If there are other overdue documents (with 0 level), the system includes in the letter these documents as well, and increases their dunning level to 1. The system increases the dunning level to 2 for the document whose number of days past due exceeds the number specified for the second level.
• The letters of the next levels in the sequence are generated similarly to the letters of the second level.
• The letter of the last level for the customer is generated if at least one document listed in the previous letter is unpaid and the number of days this document is past due exceeds the number of days specified for this level. When this letter is prepared, the system selects the Final Reminder check box for this letter on the Print/Release Dunning Letters (AR522000) form. In this case, after letter generation, the customer account is excluded from the dunning process and can be selected on the Manage Credit Holds (AR523000) form, so you can put this account on the credit hold.
  Note: If for some reason the process of dunning letters preparation was delayed for a period of time, the system will shift the dates of dunning letters generation for the period of the delay.

In your company's dunning letters, you can notify customers receiving the letters about all open documents—unpaid (the due date is still in the future) and overdue (the due date has passed). To do this, you select the Add Coming-Due Invoices check box on the Dunning tab of the Accounts Receivable Preferences (AR101000) form. In the printed version of these letters, the unpaid due documents will be listed at the end, and the Falling Due column contains the word Current instead of the due date.

Documents Included in Dunning Letters

You can include the following documents in dunning letters, in addition to overdue and open invoices and debit memos:

• Open credit memos
• Open payments, prepayments, and customer refunds

You include additional documents by selecting the Add Open Payments and Credit Memos check box on the Prepare Dunning Letters (AR521000) form. Depending on the states of the Add Coming-Due Invoices and Add Open Payments and Credit Memos check boxes, documents are included in the generated dunning letters as described in the System Behavior column of the following table.

When you run the Dunning Letter (AR661000) report, the amounts of the following documents that increase the customer's balance are shown with the plus sign (+):

• Invoices
• Debit memos
• Overdue charges
• Customer refunds

The amounts of the following documents that decrease the customer's balance are shown with the minus sign (–):

• Credit memos
• Payments
• Prepayments

Letter Preparation

You use the Prepare Dunning Letters (AR521000) form to prepare dunning letters. The table lists the customer accounts that have at least one overdue document. You can generate dunning letters for all listed customers or only those you select.

After you have selected the customer accounts that you want to process (by selecting the check boxes in their rows), you click Process (on the form toolbar) to prepare dunning letters. You can instead prepare dunning letters for all records in the table by clicking Process All. If the letters have been generated successfully, the system displays a green check mark on the form toolbar. The letters are prepared with the Released status and are ready for printing or emailing.

When a dunning letter is prepared, the system updates the information in the Dunning Letter Info section on the Financial tab of the Invoices and Memos (AR301000) form. For each document involved, the system updates the date of the last released dunning letter that included the document, and increases the document dunning level by one.

Dunning Letter Statuses

During the processing of a dunning letter, the system changes the status of the letter as follows:

• Released: This status indicates that the dunning letter has been prepared and released and can be printed, sent by email, or voided. If a nonzero dunning fee was specified for the level of this letter (on the Dunning tab of the Accounts Receivable Preferences form), the system also creates the invoice for the dunning fee during the release of the dunning letter. If the Automatically Release Dunning Fee Documents check box (on the Dunning tab of the Accounts Receivable Preferences form) is selected, the system automatically releases the invoice when the corresponding dunning letter is released.
• Voided: This status indicates that the dunning letter has been voided, the system decreases the dunning level for each document that was included to this letter, and will process these documents when you prepare a dunning letter for this customer account again.

Letter Previewing and Sending

You use the Print/Release Dunning Letters form to print released dunning letters or initiate the emailing of them. On this form, you can print dunning letters to be sent through postal mail, or generate emails that you can preview before sending them on the Emails Pending Processing (SM507000) form.

Letters from all branches can be sent separately or can be consolidated (on generation) into a single letter to the customer. This is controlled by the Prepare Dunning Letters box on the General tab of the Accounts Receivable Preferences (AR101000) form. In the Dunning Letter from Branch box on this tab, you should also select the branch that will be specified as the sender.