A dunning letter is a communication sent to a customer who has an overdue payment, explaining that the payment is past due and requesting immediate payment. Dunning letters are a key tool for collections teams because they help with staying on top of and preventing delinquent accounts. They are also used to manage days sales outstanding (DSO) so that businesses can keep their cash flow in a good place. Dunning letters can take various physical forms, such as regular mail, registered mail, overnight delivery, fax, email, or even a text message. There are separate dunning letters that you will write based on the days past due of the customer, and each letter will have a different tone, so the customer understands the seriousness of their delinquencies. Dunning letters can be used repeatedly with different customers by simply filling in the blanks and sent out automatically to past due customers using an accounts receivable software. It is important to choose the right words and tone when writing dunning letters to make them effective.