Key Takeaways

• Automating your dunning procedure significantly improves late payments while reducing manual A/R workload.
• A dunning management system ensures consistent reminders, structured workflows, and improved cash-flow visibility.
• Strong dunning software integrates with ERP, billing, and CRM tools to centralize invoice data and streamline follow-ups.
• Key dunning system features include segmentation, analytics, retry logic, multi-channel communication, and self-service payment tools.
• Implementing a modern dunning management software solution enhances accounts receivable automation and customer experience.

What Is Dunning Management Software?

Dunning refers to the structured process of following up on overdue invoices. It typically includes sending a dunning notice, escalating reminders over time, and monitoring payment updates. A dunning management system (also called dunning software) automates these workflows by sending reminders, tracking invoice status, organizing follow-up tasks, and analyzing effectiveness.

Modern dunning software also supports segmentation, retry logic for failed payments, communication templates, analytics dashboards, and integration with finance tools. Positioned correctly, dunning automation becomes a vital part of broader accounts receivable automation strategies, reducing DSO and improving revenue predictability.

Key Features to Look for in a Dunning System

1. Automated Reminder Workflows

A reliable dunning management system automates the full lifecycle of reminders. This includes first notices, follow-up messages, escalations, and pre-collections communication. You should also be able to personalize the content so that your customer automatically receives emails with more information than the obvious fact that they have an outstanding invoice.

2. Payment Retry Logic

For recurring-billing or subscription businesses, retrying failed payments is essential. Tools with built-in retry strategies reduce involuntary churn and prevent lost revenue.

3. Segmentation & Workflow Customization

Different customers require different approaches. Advanced systems allow segmentation by payment history, risk profile, geography, or invoice amount.

4. Multi-Channel Communication

Effective dunning software should support email, SMS, in-app messaging, and reminders through customer portals.

5. ERP, Billing & CRM Integrations

Accurate invoice and payment data is essential for reliable workflows. Integrations ensure the dunning system automatically updates as customers pay, dispute, or delay invoices.

6. Analytics & Reporting

Analytics reveal which parts of your dunning process working effectively support collections, including message timing, channel success, and customer responsiveness.

7. Self-Service Portals

Customers should have the option to log in, view overdue invoices, update payment methods, and pay outstanding balances seamlessly, if not in the system, at least be able to link to it from within the email.

8. Compliance & Audit Trails

Clear logs of reminders, staff actions, escalations, and customer responses ensure compliance and support internal audits.

How Dunning Software Improves On-Time Payments

1. Faster & More Consistent Outreach

Automated reminders reduce delays and address overdue invoices early, increasing the likelihood of payment.

2. Predictability & Cash Flow Stability

Automated workflows create consistent follow-up patterns that result in more predictable incoming payments, improving financial planning.

3. Reduced A/R Team Workload

By removing manual follow-ups, your A/R staff can focus on dispute resolution, customer communication, and high-value analytics.

4. Better Customer Experience

Friendly, timely reminders, combined with easy payment options, help customers stay current without feeling pressured or overlooked.

5. Actionable Insights

Analytics inform workflow improvements, escalation timing, and customer behavior, transforming collections into a data-driven practice.

Top 8 Dunning Management Tools for 2026

Below are eight leading dunning management software solutions for 2026.

1. Gaviti

Gaviti is a full accounts receivable and collections automation platform designed to optimize the entire invoice-to-cash process. The system supports sophisticated dunning workflows, predictive analytics, segmentation, collaboration tools, and automated task management for A/R teams. Also available through Gaviti is the ability to create workflows via AI, meaning rather than using pure logic to create a workflow, you can tell Gaviti what you want the workflow to do in plain language and Gaviti will create the workflow for you which you can edit as needed. Gaviti stands out for its ability to combine workflow automation with deep visibility, robust integrations, and enterprise-scale A/R capabilities.

2. Chargebee

Chargebee is a subscription management platform offering automated dunning workflows for recurring revenue businesses. It supports payment retries, notification schedules, and flexible billing configurations suited for SaaS companies and subscription billing models.

3. Paddle

Paddle acts as a revenue platform for software businesses and includes built-in dunning capabilities. Its focus on software companies makes it strong for digital products, global payments, and compliance-heavy environments.

4. Recurly

Recurly offers subscription lifecycle management with dunning sequences designed to improve renewal rates and reduce involuntary churn. Its workflow tools support reminder scheduling, customer notifications, and analytics.

5. Churnkey

Churnkey is centered on reducing involuntary churn caused by failed payments. It helps companies improve payment recovery through smart retry algorithms, customer messaging, and payment-updating workflows.

6. FlexPay

FlexPay offers automated payment recovery with AI-assisted logic designed to reduce payment failures. It includes dunning reminders, retry logic, and recovery analytics, making it well suited for subscription and membership businesses.

7. Zoho Subscriptions

Zoho Subscriptions provides recurring billing automation with built-in dunning workflows. It is cost-effective for small and mid-sized businesses adopting basic dunning and subscription billing operations.

8. ChargeOver

ChargeOver focuses on recurring billing and invoicing, offering automated dunning reminders. It fits businesses seeking simple and straightforward automation without extensive enterprise complexity.

Dunning Management Software Solutions Feature Comparison Chart

How to Integrate Dunning Tools with ERP & Billing Systems

1. Sync Invoice & Customer Data Automatically

Your dunning system must receive customer, invoice, and payment data automatically from your ERP or billing platform.

2. Configure Workflow Triggers

Triggers determine when reminders send, when escalations occur, and when tasks are assigned to your A/R team.

3. Enable Bi-Directional Updates

When customers pay, dispute, or update payment details, your ERP must update instantly to avoid unnecessary reminders.

4. Connect CRM Systems

CRM integration ensures account managers and customer success teams see late-payment statuses and communication history.

5. Test Reminder Schedules

Before full implementation, ensure the system delivers messages correctly, handles edge cases, and reflects accurate invoice status.

6. Build Dashboards for A/R Metrics

Monitoring DSO, dispute rates, recovery percentages, and customer responsiveness informs continuous improvement.

7. Train Your A/R Team

All users must understand workflows, escalation steps, message styles, and reporting tools.

8. Continuously Optimize

Ongoing testing and data-driven changes help refine workflows, communication timing, and segmentation for even better performance.

Why Gaviti Is the Dunning & A/R Automation Leader

As organizations face increasing billing complexity, higher customer expectations, and growing pressure to accelerate cash flow, they need more than a basic dunning tool, they need a complete, data-driven A/R automation system. Gaviti delivers exactly that. Unlike platforms that offer dunning as a secondary feature within a billing or subscription product, Gaviti is purpose-built for end-to-end accounts receivable excellence. Its workflows, analytics, and collaboration tools empower finance teams to stay ahead of overdue payments, streamline follow-ups, and dramatically reduce DSO through consistent, intelligent automation.

Companies choose Gaviti because it provides the depth, flexibility, and insight required for modern A/R operations. Advanced automation ensures every customer receives the right reminder at the right time, while predictive analytics offer unprecedented visibility into payment behavior and recovery likelihood. The platform centralizes invoice management, customer communication, team coordination, and dispute workflows, creating a unified, efficient environment where your entire A/R process runs smoothly and transparently.

Gaviti ultimately stands apart because it transforms dunning from a reactive necessity into a strategic advantage. Finance teams gain control, leadership gains visibility, and customers receive clear, automated, and professional communications. It is the only solution designed to handle both automated dunning and full collections workflows with enterprise-grade precision. Key capabilities that position Gaviti as the platform of choice include:

Gaviti Advantages

• Full invoice-to-cash automation, not just reminder workflows
• Enterprise-grade reporting dashboards and A/R intelligence
• Advanced segmentation for customer groups, regions, risk profiles, and invoice amounts
• Robust ERP/Accounting integrations and deep CRM visibility
• Built-in task management and team collaboration tools
• Predictive analytics to assess payment likelihood and prioritize follow-up
• Automated dispute management and documentation workflows
• Late fee and interest calculation engines
• Comprehensive customer payment timeline and history
• Highly flexible API for custom automation
• Multi-channel communication (email, SMS, portal) with customizable templates
• Strong escalation workflows that move cases to collections, legal, or finance
• A/R-focused customer payment portal for easy invoice review and payment
• Enterprise role-based access controls for compliance and security

By combining these powerful features with exceptional usability and deep financial insight, Gaviti gives businesses a smarter, more strategic way to manage their entire receivables lifecycle. It’s not just dunning software, it’s the modern foundation for predictable cash flow, operational efficiency, and stronger customer relationships.

FAQs

What does dunning mean in accounts receivable?

Dunning refers to the structured process of reminding customers about overdue invoices. It usually includes scheduled reminders, polite escalation messages, and tracking customer responses. The purpose is to recover outstanding payments while maintaining healthy customer relationships and avoiding aggressive collections when possible.

How does dunning management software reduce late payments?

Dunning management software reduces late payments by automating reminders, flagging overdue accounts quickly, and using consistent workflows that prevent missed follow-ups. With streamlined communication, payment portals, and retry logic, customers receive clear instructions and easy options to settle outstanding balances promptly.

Can dunning software integrate with ERP and CRM tools?

Yes. Most modern dunning systems connect directly with ERP, CRM, and billing systems to sync invoices, payment statuses, and customer information. This ensures timely updates, eliminates manual data entry, and provides a unified view of each customer and their full accounts receivable history.

What is the difference between dunning emails and collections?

Dunning emails are friendly, automated reminders intended to encourage timely payment early in the process. Collections, by contrast, occur later and involve more formal communication or third-party involvement. Effective dunning reduces the need for collections by addressing late payments before they escalate.

What A/R metrics improve with dunning automation?

Dunning automation improves Days Sales Outstanding (DSO), on-time payment rates, overdue invoice recovery, cash-flow reliability, and overall collections efficiency. It also enhances visibility into customer payment behavior, enabling better forecasting and more accurate financial planning.

See why Gaviti is ranked as the #1 Credit & Collections Software on G2: