Get a personalized demo of Stuut and see how it can help with AR automation.
Most AR teams design a solid collection sequence and then never fully execute it because there aren't enough hours in the day. Bishop Lifting reduced overdue receivables by 35%, with the team managing 50% more accounts per employee without expanding headcount. The reason wasn't a better spreadsheet. It was a cadence built for each customer tier, then executed automatically so the team focused on accounts that needed human attention.
This guide shows you how to build tailored dunning sequences for mid-market B2B, SMB high-volume, and strategic enterprise accounts, then explains how autonomous AI runs the routine touches so your team handles the exceptions that require judgment.
A dunning cadence is a structured series of follow-up communications sent to customers about overdue or upcoming payments. It answers the questions your team asks every Monday morning: Who do I contact today, which channel do I use, and what tone do I take? The cadence dictates timing, channel, and escalation from a gentle pre-due reminder through progressively firmer notices until the invoice is paid or escalated.
It differs from a billing cadence in one specific way. A billing cadence is the fixed schedule at which you invoice customers for products or services, setting payment expectations upfront. A dunning cadence activates after the invoice is sent, when payment hasn't arrived on schedule.
Your billing cadence controls when you send invoices. Your dunning cadence controls what happens when those invoices go unpaid, and that's where the cash recovery work happens.
The most common concern about automated dunning isn't about the technology. It's about control. AR analysts have spent years building institutional knowledge about which customers respond to email versus phone, which accounts need a soft tone, and which invoices need immediate escalation. Handing that judgment to software feels like losing the expertise that makes you valuable.
Automation at its best handles the work you hate: Reminder emails, invoice resends, portal submissions, and routine follow-ups. You focus on the work that requires your specific knowledge. Stuut covers the 300 accounts your team can't get to while you handle complex disputes, payment plan negotiations, and strategic relationships that need a human. You define the strategy. The AI executes the volume.
The goal of any dunning cadence is to recover cash while keeping the relationship intact. A strategic account paying 10 days late for the first time in three years doesn't need the same firm follow-up as a habitual slow-payer at 45 days overdue. The difference comes down to segmentation: Knowing which customers get a gentle nudge and which ones need a direct call. The DSO improvement checklist covers the full process of reducing collection time, and cadence design sits at the center of every step.
Before you map timing and channels, you need to understand the four factors that drive how each customer's sequence is built. These are the variables your team already tracks mentally for every account.
Invoice value shapes urgency. A high-value invoice that's two days overdue warrants earlier human escalation and phone contact as a first touch, not a third. Automated email sequences handle low-value invoices better and cover volume without consuming team time. When you map invoice risk to cadence design, your team stops spending Friday afternoon chasing a $300 invoice while a $75,000 payment sits uncontacted.
Segmenting customers changes everything about the cadence you apply. Enterprise customers with complex procurement workflows may need invoice confirmation, PO matching, and portal submission as part of each touch. SMB customers often respond to short, direct emails and pay quickly once they receive a payment link.
Practical segmentation criteria include payment history (average days-to-pay over 12 months), relationship tier (contract value, renewal risk), industry type (government and large retailers often have longer payment cycles by design), and account status (new customer vs. established account).
Historical behavior is the most reliable predictor of future payment timing. If a customer consistently pays on the 15th regardless of due date, your cadence should account for that pattern. If another always pays after two email reminders and a call, automate those two emails and reserve the call for cases where they don't respond. Build a multi-contact strategy that reaches more than one person at the buying organization, because AP contacts change and invoice routing can stall in approval queues.
Multi-channel sequences typically recover more cash than single-channel approaches, because customers who ignore email often respond to SMS or a direct call. The core channels are:
Escalation triggers define when an account moves from automated follow-up to human contact. Clear triggers prevent two failure modes: Escalating too early (which wastes AR team time) and escalating too late (which lets invoices age past 60 or 90 days without intervention).
Standard triggers include:
Group your accounts before you design any sequence. The most practical segmentation for mid-market and enterprise industrial companies uses three tiers:
Pull your aging report and assign every account to a tier. This step usually takes a few hours the first time but creates the foundation that makes every subsequent step faster.
Map specific days to each contact attempt for each tier. The framework below is a common B2B starting point. Adjust spacing based on your payment terms and portfolio mix:
Adjust the spacing based on your payment terms. Net-60 terms push each contact point proportionally later.
Assign a channel to each scheduled contact. Rotating channels increases response rates because customers who ignore emails often respond to an SMS notification or a direct call. A practical channel assignment for Tier 2 accounts:
This sequence works because it rotates channels, escalates pressure gradually, and gives the customer multiple opportunities to respond before formal escalation. The AI tracks which channel each customer responds to fastest and adjusts future sequences automatically without manual rule updates.
Define exactly what happens when a customer misses each trigger point. An escalation matrix removes ambiguity and prevents invoices from aging because no one was sure who owned the next step. Use the DSO improvement checklist to map your escalation framework across all customer tiers, including contact timing, channel assignments, and the handoff criteria that determine when a human must intervene.
Mid-market B2B customers typically have defined payment teams, standard net-30 or net-60 terms, and predictable behavior patterns. They respond well to structured multi-touch email sequences and escalate to phone when reminders go unanswered past day 14.
Mid-market B2B accounts typically respond well to a four-touch sequence that covers most scenarios:
PerkinElmer used Stuut to execute a structured cadence autonomously across its global receivables and reduced overdue invoices from 50% to 15% in one year, collecting $300M in the process. The cadence design mattered, but so did the fact that every account received every touch without manual intervention.
Email handles the first three touches for most mid-market accounts because it creates a paper trail and allows invoice attachments. Phone contact at Day +30 closes the loop for accounts that haven't responded to written outreach. Many enterprise and government accounts require portal submissions through platforms like Ariba or Coupa as part of their accounts payable (AP) workflow.
SMB accounts present a specific challenge: High transaction volume with limited AR team time per account. A collections analyst managing 400+ accounts can't manually follow up on every small invoice. The long tail of SMB accounts gets ignored until they age past 60 days, and working capital stays locked up as a result.
SMB accounts respond well to tighter cadence timing because decision cycles are shorter (one approver instead of three) and AP contacts are more accessible. Waiting two weeks between touches gives an SMB account time to forget the invoice entirely. A tighter sequence works well here:
At Day +30, if no response or payment has arrived, a human or AI voice agent makes direct contact. This five-touch structure covers most SMB scenarios within a predictable window.
AR teams managing hundreds of accounts often struggle to maintain consistent follow-up across their full portfolio. Lower-value accounts frequently age without contact because the team focuses on larger, more urgent invoices. DSO climbs and working capital stays locked up as a result.
When Bishop Lifting deployed Stuut across 45 branches managing 5,000 active accounts, the platform automated 91% of outbound communications and cut overdue receivables by 35%. The AR team didn't shrink. They shifted from making routine reminder calls to handling complex disputes and high-value relationships that needed their expertise. That's what solving the collections email detective problem looks like at scale.
Enterprise accounts require the opposite approach from SMB. These customers have long relationships, complex billing requirements, and AP teams with specific submission preferences. A rigid automated sequence applied to your top accounts creates friction and relationship risk.
Build individual payment profiles for each enterprise account, noting the preferred contact, the specific AP contact and backup, the portal or submission method required, and any known approval delays such as year-end budget freezes or quarterly locks.
Enterprise cadences run slower and with lower frequency. Applying a stern formal notice to an account that's paid on time for five years is a relationship risk that no collection amount justifies. A practical framework:
This four-touch approach over 45 days keeps contact infrequent enough not to irritate a valued relationship while still moving the cash. Payment that hasn't arrived at Day +45 often reflects a structural issue such as a dispute, approval block, or enterprise resource planning (ERP) mismatch rather than a simple oversight.
Human relationship management drives enterprise collections. Use automation for the early touches to free your team for the conversations that matter. By the time an enterprise invoice hits Day +21, your AR analyst should make the call with full context: Payment history, invoice details, prior email thread, and any known account issues. That context, previously scattered across email threads and spreadsheets, is exactly what Stuut surfaces in your team's dashboard before the call happens.
The two primary metrics for cadence performance are Days Sales Outstanding (DSO) and Collection Effectiveness Index (CEI). DSO measures how long it takes to collect payment after a sale. CEI measures what percentage of collectible receivables you collected during a period.
Track these at the tier level, not just overall. Your mid-market cadence may perform well while your SMB sequence loses accounts past 45 days. Aggregate metrics hide the segmented insight you need to make targeted adjustments.
Disputes that surface during the dunning process are data, not just interruptions. When a customer pushes back on an invoice, the reason usually points to an upstream issue: A pricing error, a missing purchase order (PO) number, a shipment discrepancy, or an incorrect billing contact. Most AR teams process each dispute manually, searching email threads for context and re-keying details into the ERP.
That approach worked when disputes were a small percentage of the portfolio. As dispute volume grows during rapid expansion or after an acquisition, manual processing becomes the bottleneck.
Stuut reduces dispute processing from approximately 15 minutes per case to seconds per dispute by automatically creating a case when a customer disputes an invoice, categorizing it by reason code, attaching supporting documentation, and routing it into the appropriate workflow in Salesforce or SAP.
Dispute pattern data also reveals which upstream operational problems generate the most collection friction, turning dispute data into strategic diagnostic insight that goes far beyond AR.
Adjust your contact schedule based on actual response patterns. If Day +7 emails produce a strong payment rate but Day +14 emails produce low response with high dispute volume, your Day +7 outreach should be more direct rather than waiting another week to escalate. Well-timed cadences executed consistently produce measurable results: A 37% reduction in DSO and 70% fewer manual tasks for AR teams. Stuut's customer deployments also demonstrate disputes resolved 9x faster.
The right number depends on the customer tier. Successful sequences typically use 3 to 7 total contacts over 60 days, with the specific count varying by segment:
In practice, after four or five emails with no response, adding a channel shift tends to produce better outcomes than a sixth email. After the fourth or fifth email, customers either haven't seen any of them (wrong contact), are ignoring them intentionally (dispute or cash flow issue), or need a channel shift to break through.
A human should take over when any of these conditions apply:
Everything before these triggers is routine work that AI can handle with full contextual knowledge of the account history, prior communications, and payment patterns.
Automated dunning works when it handles the first three touches on routine accounts while your team handles the accounts that need expertise. The routine work being automated, the reminder emails, invoice resends, portal submissions, and payment matching, isn't the work an AR analyst with 8 years of experience should spend most of their day doing.
Razvan Bratu, Head of Quote to Cash at Honeywell, put it directly in describing their results: "The platform handles the routine work so our people drive increased real business value."
Stuut surfaces only the accounts that need human attention in your team's dashboard. The AI handles the volume while your team reviews what's been sent, corrects anything that needs adjustment, and focuses on the complex situations that require their specific knowledge. Some traditional AR platforms require months of setup before any automated outreach begins.
Stuut begins live outreach in days (typically 3 to 4) with full go-live usually within 6 to 10 days, so your team sees the shift in workload within the first week rather than waiting quarters for ROI. The accounts you never had time to contact before now receive consistent follow-up. The relationships that need your expertise get your full attention, and that's augmentation, not replacement.
Book a demo to see how Stuut executes your dunning cadence across email, SMS, and voice while your team handles the escalations that require judgment.
A standard dunning sequence starts with a pre-due reminder 3 days before the invoice due date, followed by contacts at Day +1, Day +7, Day +14, and Day +30 with escalating urgency at each step. For accounts still unresolved at Day +45, human escalation is standard across most B2B frameworks.
Most successful sequences use 3 to 5 emails before switching channels, with a total of 6 to 8 touches over 60 days depending on the customer tier. After four or five emails, response rates drop sharply. Either the contact is wrong, the customer is ignoring written outreach, or a channel shift is needed to break through.
Humans should intervene when an invoice hits 45 days overdue without payment or when a customer replies with a complex dispute. AI handles the routine reminders, invoice resends, and portal submissions up to that point, freeing the AR analyst for conversations that require negotiation or judgment.
Segmented cadences prevent relationship damage by design. Enterprise strategic accounts run on low-frequency, human-supervised sequences with direct analyst involvement from Day +21. SMB accounts run fully automated because those customers prefer fast, transactional communication. The segmentation ensures your most important relationships never receive the same urgent tone as a first-time SMB late payment.
The terms describe the same process. A dunning cadence refers specifically to the structured follow-up communications around overdue invoices, while "collections cadence" is often used interchangeably to describe the same sequence in AR management contexts.
Dunning cadence: The scheduled sequence of communications sent to a customer regarding an upcoming or past-due invoice. It dictates the timing, channel, and tone of each touchpoint from pre-due reminder through escalation.
Days Sales Outstanding (DSO): A metric measuring the average number of days it takes a company to collect payment after a sale. Lowering this number increases available working capital and is the primary benchmark for cadence performance.
Cash application: The process of matching incoming payments to the correct open invoices in the AR subledger. Stuut automates cash application at a 95%+ match rate, eliminating the manual reconciliation step that typically delays month-end close.
Collection Effectiveness Index (CEI): A metric measuring the percentage of collectible receivables collected during a defined period. CEI combined with DSO gives a complete picture of cadence performance across your portfolio.
Escalation trigger: A defined condition that moves an account from automated follow-up to human intervention, such as an invoice reaching 45 days past due, a customer submitting a complex dispute, or an invoice value exceeding a set threshold with no response after 15 days.
Aging buckets: The categorization of outstanding invoices by how long they've been past due, typically grouped as 0 to 30, 31 to 60, 61 to 90, and 90+ days. Cadence design maps contact timing and escalation to these aging stages.
%20STUUT%20_%20WSJ%20Banners.pdf%20(4).png)
