Effective dunning procedure - How to get your customer to pay

If you want fewer unpaid invoices and better liquidity, a clear and consistent reminder procedure is one of the most important things you can work on. A good reminder process is not just about getting your money back—it's also about customer experience, professional communication, and compliance with legislation.

With an elaborate reminder procedure:

• you get faster payment
• Minimize the need for debt collection and litigation
• Free up time in accounting for other tasks

In this guide, you'll get an updated and practical overview of what an effective reminder procedure looks like in practice, what rules you need to know - and when it makes sense to send the case to debt collection.

How fast can - and should - I move?

The basic rule is simple: You can only send a reminder when the payment deadline on the invoice has passed.

But if you want to increase the likelihood of payment, it makes sense to be:

• proactive before maturity, and
• Quickly after due date.

Before due date: friendly letter to the customer

A short, friendly reminder 1-2 days before the due date can make a big difference - especially in busy businesses where invoices can easily get lost. This could be an email, for example:

"Dear [name],

Just a friendly reminder that invoice [#] is due on [date]. Please contact us if you have any questions."

It's a simple way to improve both cash flow and the customer journey.

After decay: react quickly

When the payment deadline has passed, you shouldn't wait for weeks.

The sooner you bring the non-payment to our attention, the better:

• the more likely you are to get the money
• less risk of excuses and procrastination
• More clearly signal that you're in control of your bookkeeping

A good rule of thumb is to send the first friendly reminder 3-5 days after the due date.

How many times do I have to move?

In principle, you can move as often as you want - but it's rarely a good idea in practice.

Legally applies, among other things:

• You can charge up to 3 reminder fees of max DKK 100 incl. VAT per reminder.
• When you impose a reminder fee, the customer must have a minimum of 10 days to pay.
• There must be at least 10 days between fee reminders.
• There's no requirement that you send reminders before proceeding to debt collection - but a valid debt collection notice must always be sent.

In practice, we often find that sending 3 sharp reminders in a row to a customer who is clearly not responding is a waste of time. Instead, we typically recommend:

• 1 friendly reminder
• 1 reminder with fee
• 1 reminder incl. debt collection notice

You should then assess whether the case should be sent to debt collection.

Suggestions for an efficient reminder process

Here's a concrete example of a short and efficient reminder process that takes into account the rules - and your time.

Day 0
Invoice due

Day 3-5
Friendly reminder (no fee)

Day 10-14
Reminder 1 with reminder fee

Day 20-24
Reminder 2 with reminder fee + debt collection notice

Day 30-35
The case is handed over to debt collection if still not paid

Of course, you can adjust the days according to your industry and customer type - the important thing is that you:

• is consistent
• comply with the 10-day rule when imposing fees
• Don't let the process drag on for months

This is what your letters can look like

1. The friendly reminder

Timing: 3-5 days after due date
Purpose: Assume it's an oversight - keep the good tone.

Content:

• short and friendly tone
• Invoice number and due date
• amount and payment details
• Invitation to contact you with questions or disagreements

No fees, no threats - just a professional reminder.

2. Reminder 1 - sharper tone and reminder fee

Timing: no earlier than 10 days after due date (if you want to charge a fee).

Now you're turning up the seriousness a bit:

• Clarifies that payment has not been made
• Allow 10 days for payment
• Add a reminder fee of DKK 100, if applicable.
• mention that non-payment can lead to further action

You can also choose to add interest, but many choose to keep it simple and only use reminder fees.

3. Reminder 2 - incl. debt collection notice

Timing: at the earliest 10 days after Move 1.

Now you should combine reminders and debt collection notices:

• Clear headline - e.g. "Reminder 2 and debt collection notice"
• Enter the total amount owed including fees and any interest
• Allow 10 days for payment
• Clearly state that in case of non-payment, the case will be sent to debt collection
• state that this will result in additional costs for the customer

You can send a third reminder - but in practice, the likelihood of payment is often very low if the customer has ignored both the reminder and the first two reminders.

Read also: Download free reminder templates

Remember: Your debt collection notice must be valid

Before you hand over a case to debt collection, you are obliged to send a debt collection notice that complies with the Debt Collection Act.

A valid debt collection notice must contain as a minimum:

• Customer name and address
• Your business information
• The original principal (invoice amount)
• The total amount owed including any interest and reminder fees
• Information that the case will be handed over to debt collection in case of continued non-payment
• Information that debt collection may result in additional costs for the customer
• A payment deadline of 10 days

The collection notice can easily be part of your final reminder - as long as the above is included.

Read also: Download free debt collection notice template

My customer is still not paying - what then?

If the customer continues:

• does not pay
• does not respond
• or repeatedly promise payment without honoring agreements

... then it's typically time to send the case to debt collection or legal action.

A few important points:

• Don't wait too long - as a rule of thumb, it should take a maximum of 2 months from the due date before you consider debt collection.
• The newer the claim, the greater the chance of recovering it.
• Old claims often end up as losses - and take up unnecessary time in bookkeeping.

Here, it can be a clear advantage to let an external debt collection company take over. The fact that the reminder comes from a third party sends a clear signal that you mean business.

Consider automating your reminder process

For many companies, reminder management is one of those tasks that keeps getting put off. It costs cash flow - and ultimately lost money.

That's why more people are choosing to:

• Automate the reminder flow
• Connect your financial system with a dunning service
• Let a debt collection company handle both the reminders and the subsequent collection process

At Collectia, we offer dunning services and full-service debt collection, where we can help with everything from sending invoices, reminders and debt collection notices to handling lawsuits, forced realization and ongoing monitoring of your customers.

It gives you:

• Fewer manual tasks in bookkeeping
• Faster and more predictable payment
• A partner who knows the law and ensures the right process - every time

Brief summary - how to have an effective reminder procedure

• React quickly after decay - and be proactive sooner.
• Keep your reminder process short and consistent - avoid dragging it out.
• Remember the rules for reminder fees: max. 3 of 100 DKK and a 10-day deadline.
• Make sure your debt collection notice is valid before you send it to debt collection.
• Consider whether a reminder service or debt collection partner should handle part or all of the process.

A sharp reminder procedure strengthens your cash flow, professionalism and customer relationships - when used correctly.