Revenue Service refers to the systematic handling of due, unpaid customer accounts receivable. In particular, it includes monitoring payment status as well as processing payment reminders and dunning notices.
What is Dunning process?
The Dunning process applies to open customer receivables that have reached their due date and have not yet been paid in full.
This is based in particular on information regarding invoice amounts, due dates, and payments already received. This information can, for example, be obtained from the Debtors ledger stems from.
Due date and default – what is the difference?
An open claim is not automatically due. Likewise, a due and not yet paid claim does not in every case mean that the debtor is already in legal default.
Under § 286 BGB, default generally occurs if the debtor fails to perform following a reminder after the due date has passed. In cases specified by law, however, default may also occur without a prior reminder.
In short: „Open“, „due“ and „overdue“ describe different states of a claim.
Dunning process and receivables management – what is the difference?
The Debt management comprises the overarching monitoring and management of the receivables portfolio. This also includes receivables whose payment due date has not yet passed.
By contrast, Dunning process is a narrower sub-area and relates in particular to the further processing of due receivables that have not yet been settled.
In short: Receivables management looks at the entire portfolio of receivables – whereas Dunning process focuses on processing overdue, still unpaid customer receivables.
What is the role of open items (OPOS)?
Outstanding Items (OPOS) There are still fully unbalanced receivables or liabilities within Bookkeeping.
For the Dunning process, open customer receivables are particularly relevant. Information on outstanding items can show which receivables still exist and what their payment status is.
OPOS refers to the accounting status or the corresponding overview. The Dunning process, on the other hand, describes the organisational processing of due open receivables.
What is included in Dunning process?
The Dunning process may include the following areas in particular:
- Monitoring of overdue customer receivables
- Checking the payment status
- Payment reminders and dunning letters
- Documentation of the respective payment reminder status
- Taking into account received payments
The exact design of a dunning procedure can vary depending on the company and the claim.
