Dunning – Doing the Deed

6/2/2010

I have worked with clients who can’t pay promptly to give them time, flexibility, even payment terms. I don’t understand, however, the business practice of pushing off paying for goods or services until an unspecificed future date. Maybe I just need a little more of the optimist knocked out of me for my own good. Your thoughts?

I found the following definition on www.merriam-webster.com:

Main Entry: 3dun

Function: transitive verb

Inflected Form(s): dunneddun·ning

Etymology: origin unknown

Date: circa 1626

1 : to make persistent demands upon for payment 2 : plaguepester

Last month, I sent out my second ‘dunning’ notice to a client. I work on a net 15 basis for services provided, but am flexible with my payment demands up to net 30. At net 29, I sent a ‘gentle reminder’ that their ‘x-month invoice is due.’

The first time I dunned this client, they noted that there had been a mix-up in my invoice numbering, and that they thought they had already paid the bill. I re-sent the pertinent invoice and was paid promptly.

This month, I got a stern notice back with a definition of what ‘Net 30’ means as a standard business practice. Some explanation is in order at this point. I provide this service on a weekly basis, but bill monthly. So, in theory, when the bill is sent at the end of the month, the first week of the previous month would be almost 12 weeks past when it’s paid, or net 90.

A terse exchange followed, and I resolved the matter to begin billing weekly, to avoid this irregularity in how ‘net 30’ was being interpreted.