Managing accounts receivable can be a daunting task for any business. Unpaid invoices pile up, and chasing after late payments takes valuable time away from running day-to-day operations. Fortunately, NetSuite provides a powerful solution with its automated dunning letters feature. But what exactly are dunning letters, and how can they benefit your business?

What Are Dunning Letters?

Dunning letters are formal communications sent to customers who have overdue invoices. The goal of these letters is to remind customers of outstanding payments, providing a professional but firm nudge to clear their dues.

With NetSuite, businesses can automate this process, customizing dunning letters based on the number of days an invoice is overdue, the tone of the letter, and even including past due balances. The automation ensures that reminders are timely, consistent, and less prone to human error.

Benefits of NetSuite Dunning Letters

  1. Improved Cash Flow The most immediate benefit of using dunning letters is the improvement in cash flow. When reminders are sent out on a regular basis, customers are more likely to pay their invoices on time, improving your liquidity. Automated reminders remove the risk of invoices being forgotten and provide a steady flow of income for your business.
  2. Time Savings with Automation Instead of manually tracking which invoices are overdue and drafting individual follow-up emails, NetSuite allows you to automate the process entirely. Set the system to generate and send dunning letters based on specific criteria, saving hours of administrative time each month.
  3. Professionalism and Consistency NetSuite’s dunning letters maintain a professional tone, ensuring that each customer interaction is handled with care. You can customize the tone to fit your brand’s voice—whether that’s friendly or more formal—and ensure every communication is consistent. This fosters a professional image for your business while avoiding awkward follow-up calls.
  4. Improved Customer Relationships Automated dunning letters may sound impersonal, but in fact, they help maintain relationships. By sending reminders early and regularly, customers appreciate the transparency and timely communication. There’s less risk of surprise, leading to fewer disputes and strained relationships over missed payments.
  5. Reduce Bad Debt Late payments can quickly turn into bad debt if not addressed properly. NetSuite’s automated dunning process helps reduce this risk by ensuring that reminders are sent promptly, giving your business a better chance of recovering unpaid invoices before they become write-offs.
  6. Customization Based on Customer Behavior One of the standout features of NetSuite’s dunning letters is the level of customization available. You can send different letters depending on how late the payment is, including different messages for frequent late payers versus those who may have simply forgotten. This personalized approach improves the effectiveness of the reminders.
  7. Multi-Language Support For businesses with international clients, NetSuite’s dunning letters can be sent in multiple languages, ensuring that communication barriers don’t delay payments. This makes it easier to manage collections in a global marketplace, fostering stronger international customer relationships.

How to Set Up Dunning Letters in NetSuite

Setting up dunning letters in NetSuite is relatively simple. Here’s a quick overview of the steps:

  1. Enable the Feature: Navigate to Setup > Company > Enable Features. Under the Transactions subtab, check the box for Dunning Letters.
  2. Configure Dunning Levels: You can configure dunning levels to send different messages depending on how long an invoice has been overdue. For example, after 15 days, a friendly reminder; after 30 days, a firmer letter.
  3. Create Custom Templates: Customize templates to match your brand’s tone and style. Add your logo, adjust the wording, and decide on the frequency of reminders.
  4. Assign Dunning Letters to Customers: Once configured, you can assign dunning letters to specific customers or customer segments, tailoring your strategy as needed.
  5. Monitor and Adjust: As with any automated process, regularly monitor the effectiveness of your dunning letters and make adjustments as needed.

Conclusion

NetSuite dunning letters are an indispensable tool for any business looking to streamline accounts receivable, improve cash flow, and reduce bad debt. By automating the process, you save time, reduce errors, and ensure a professional, consistent approach to debt collection. With the ability to customize letters based on customer behavior and international support, NetSuite’s dunning features are perfect for businesses of all sizes.

If you’re ready to boost your business’s cash flow and keep your accounts in order, it’s time to take advantage of NetSuite’s dunning letters today.