Dunning Type

A Dunning Type is the template a Dunning uses: a name such as First Reminder or Final Notice, the yearly interest rate, the fixed fee, the heading and body text of the letter, and the income accounts where interest and fee will be credited when paid. It posts nothing itself. Set up a short escalation ladder: a first reminder with no charges, a second with a fee, and a final notice with interest, so the tone and cost rise with each step. The income accounts should be separate heads under Other Income so the Profit and Loss Statement shows how much you earned from late payers, which is also income for tax purposes.

1. 01Go to Invoicing > Dunning Type > New and enter the name, for example Final Notice.
2. 02Set Rate of Interest, for example 2, and Dunning Fee, for example 500.
3. 03Pick the company and the Income Account for the fee and for interest, plus the Cost Center.
4. 04Write the letter Heading and Body text; placeholders can insert the customer and amounts.
5. 05Save; the type is now selectable on a Dunning.

Create under Accounts > Dunning Type for first, second and final reminders.

First Reminder: no interest, no fee. Final Notice: 2% yearly interest, pro rated by days overdue, plus Rs 500 fee.