Many companies treat collections as a last-minute task. They wait until invoices become overdue and then scramble to collect payments. However, this approach wastes cash and strains customer relationships. It also costs time and effort.
In our Sales-to-Cash Engine™, steps 8 and 9 focus on Collections & Receivables Management and Dispute Resolution & Dunning. These steps help you recover cash and fix payment problems.
Why a Broken Dunning Process Hurts Cash Flow
First, dunning means sending payment reminders on time and following up regularly. Unfortunately, many companies do not have a clear dunning process. As a result, they:
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Miss early chances to remind customers before payments become late.
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Send the same reminders to all customers, ignoring who pays late often.
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Let disputes drag on, which causes more payment delays.
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Use manual, unplanned follow-ups that waste time and annoy customers.
Because of this, their overdue payments grow. Their days sales outstanding (DSO) rise. And their cash gets stuck.
Real Example: How We Helped a Client
A client had over 25% of their yearly sales stuck in unpaid invoices. After we looked at their dunning process, we found:
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Customers got no reminders until invoices were 60+ days late.
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They did not focus on customers who owed the most or were slowest to pay.
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Disputes had no clear owner and took weeks to solve.
We fixed their dunning process by creating a clear and prioritized follow-up plan. Consequently, they cut overdue payments by more than half in six months.
How to Fix Your Dunning Process
To build a strong collections process, follow these steps:
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Group Your Customers
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Sort by how much they owe and how fast they pay.
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Send Timely, Automated Reminders
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Start reminders before invoices become due.
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Assign Owners for Disputes
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Fix disputes quickly to avoid payment delays.
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Use Data to Focus Efforts
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Spend more time on customers who owe a lot or pay late.
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Keep Communication Clear and Polite
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Use a friendly, consistent tone to keep good relations.
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Turn Collections Into a Cash Engine
When you treat collections as a planned, ongoing process — not a last-minute scramble — you build a cash recovery engine. This way, you improve cash flow predictability, reduce bad debts, and save your team time.
What’s Next?
If you want to learn how to improve your entire Sales-to-Cash cycle, our full Sales-to-Cash Engine™ Guide covers collections, dispute resolution, and more.
📥 Download the guide here: Sales-to-Cash Engine™ Guide
