Are you missing this key step in your dunning process?

Sushma Ashutosh
by Sushma Ashutosh
Nov 19, 2020 1:30:00 PM

to dun (dŭn) tr.vbto make repeated and insistent demands upon, especially for the payment of a debt; often involves escalating degrees of intensity; term first recorded in English in 1620–30. 

You’d be hard pressed to find many people who actually enjoy chasing down clients for late payments, but it’s a challenge that businesses have had to deal with for as long as people have been trading products and services… Payments are sometimes late, and tough economic times only put more pressure on accounting teams to recover payments and balance the books each month.

If the process of chasing down payments—a.k.a., “dunning” in accounting parlance—has in fact been around since at least 1620, then you’d think that someone would have come up with a no-fail way to guarantee timely payment by now. 

Yet, while no single methodology can guarantee timely revenue recovery, you can take steps to improve your quote-to-cash process. Our recommendation: Implement a solid dunning management strategy that caters to your customers’ ways of doing business with you.

Two major benefits of a solid dunning management strategy—more punctual payments and reduced churn

A strong dunning process involves communicating with your customers on a regular basis to ensure the timely collection of fees or payments. It’s often connected with subscription-based client engagements, but really, a solid dunning management strategy just makes good, practical business sense

It’s like the old adage “out of sight, out of mind” warns: Communicate inconsistently with your customers and you may not only fall from top-of-mind status, but your payments may also fall through the cracks in the process. 

What’s more, when you maintain regular, scheduled contact with your customers—whether that’s through monthly emails, text messages, in-person calls or other method of communication—you can stymie customer churn and even potentially grow your revenues with certain customers, particularly ones who are newer to your client roster or to your industry in general.

It’s important to acknowledge that not all dunning management strategies are created equal: The goal of dunning communications is to clearly, concisely and tactfully address any existing payment issues, while also reminding customers of the value of your continued work together. 

Beyond those motivations, the most successful dunning communications rely on two key qualities—timeliness and personalization—in order to achieve the end-goals of quicker revenue recovery and lower customer churn. And bar-none, the most efficient and cost-sensitive way to communicate in a timely and personalized fashion is through automation.

If your dunning process doesn’t make use of automation, you may be leaving money on the table each month

To get the most out of your dunning management, you need a platform that can automate the manual processes that take so much valuable time away from more strategic business-building work.  

Many of today’s leading-edge SaaS platforms feature varying levels of built-in automation. But only the most sophisticated ones, like Ordway’s billing and revenue automation platform, succeed where out-of-the-box CRMs, ERPs, and IaaS technology fail. 

Ordway’s advantage lies in the flexibility that powers automated quote-to-cash processes and makes for ultra-granular and hence, ultra-personalized and timely, customer communications. 

Communicate crisply with your customer cohorts

When designing your dunning process, you should segment your accounts based on importance to the business. For instance, 85% of your customers may on a starter plan at a low price point with simple terms, and 15% may be enterprise customers with bespoke contracts and in need of white-glove treatment. You may want to consider focusing your customer success team on the 15% of customers that need white-glove treatment, and let automation collect aging receivables from the 85% who represent important, but lower LTV for your organization.

Additionally, regardless of cohort, make sure your dunning communications include relevant details specific to the customer and your brand. Details should include, but are not limited to:

  • How many days outstanding
  • The invoice #
  • The invoice amount
  • Your brand colors/fonts to ensure the customer knows the communication is coming from you and is not a phishing attempt

dunning-email_2Example of customizable dunning email from the Ordway platform

Because Ordway is API-first, the platform seamlessly integrates with all of the top CRMs, ERPs and other SaaS technology, including QuickBooks, Salesforce or other software. So, when important activities take place (e.g., a payment is overdue or a customer logs a ticket with your Support Team), the Ordway platform can dispatch an instant notification to your customer to request a payment, respond to a tech issue, or for dozens of other reasons. 

Ordway’s automatic billing system pulls in as much granular detail as you’re able to provide and customizes the notifications so each message hits home as powerfully as if you wrote it fresh in your email suite. And when customers respond, by sending a payment, updating their account settings, or otherwise, that information gets logged in your other accounting software as well. This means that you’ll have a much easier time closing the books at the end of month and end of quarter, and you’ll have built a stronger and more lasting relationship with your clients in the process.

Optimize your quote-to-cash process using automated dunning communications

From reminders of late payments to updates on product development, special offers to simple “checking in” messages—it makes sense that the more you communicate with your customers, the higher up on the priority list you’re likely to stay. But the real customer longevity and payback comes from ultra-personalized, targeted messaging, which can drain your time and resources.

Instead of sinking your valuable attention into such manual tasks, consider optimizing your quote-to-cash process using an automated revenue and billing platform like Ordway—for better and faster revenue recognition and lower churn over the long haul.

Get dunning workflows customized to the unique needs of your clients. Contact us to learn how!

Topics: billing, SaaS, recurring revenue, automation, performance economy, churn

 

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