Understanding How Dunning Works

Dunning is the process of how you handle past due accounts. It involves communicating with your customers in response to failed transactions, and what action you take when the subscription can’t be renewed. Advanced Billing gives you the ability to customize these communications every step of the way. Whether a Customer's payment fails due to a declined credit card Transaction or unpaid Invoice terms, Maxio’s flexible dunning workflows keep your revenue flowing and your customers informed.

Dunning processes generally consist of a series of emails sent at defined intervals to inform the Customer of the missed payment and prompt corrective action. For automated payment methods, retry attempts can also be configured. Because each payment method has unique characteristics, Advanced Billing allows you to set up distinct dunning strategies for each one. This flexibility ensures your dunning processes align with your business needs.

You can also define the final action for Subscriptions that complete the dunning process but remain past due. Subscriptions may be moved to an “Unpaid” status, where they remain active and continue to accrue charges—typically used when ongoing service access is desired despite non-payment. Alternatively, Subscriptions can be automatically moved to a “Canceled” status to restrict service access until payment is received.

Customizable elements of your dunning strategy include the frequency and quantity of Subscriber communications, the content of those messages, and the retry cadence for automated payment methods. Advanced Billing provides email templates for convenience. You can also integrate Twilio to send SMS messages. Each communication method can be tailored to suit your business requirements.

Automatic Cancellation Due to Dunning

After a failed payment, Subscriptions transition to a past due state in Advanced Billing. At that point, the platform initiates smart retries. Once retries are exhausted, certain dunning strategies will automatically transition the Subscription to a "Canceled" status. 

Collections Status

In some cases, you may continue collecting on Invoices after the Subscription has been canceled due to dunning. The “Cancellation of Invoices in Collections” setting allows Invoices to remain in a "Collections" status for a specified number of days after dunning. After that period, the Invoice will be marked as "Canceled."

This setting is available under Config > Settings > Invoices.

Dunning by Product or Product Family

Advanced Billing allows product-specific or product family dunning strategies in addition to site-level strategies for each payment method. 

To configure product-level dunning, access the payment method you wish to customize. From Advanced Billing, go to Config > Retries & Dunning. Click Create Schedule to initiate a new schedule for the product.

First, set up the Schedule Details.

For Applied To, 

Next, build the Schedule.

You can either:

• Click Edit to customize the "Day 1" schedule. You also have the option to add intermediary steps before the Final Action, when the Subscription is either canceled or marked as unpaid. 

• Or, click Use Template to use one of these prebuilt templates:

  

Once configured and saved, the product-specific dunning strategy appears in the payment method view (for example, credit cards). It will take precedence over any site-level settings for that product.

Visual Timeline

To enhance your understanding of dunning schedule structure, each schedule now includes a Visual Timeline directly within the Dunning Schedules.

The timeline visually displays all scheduled touch points (emails, actions, etc.) relative to the full duration of the dunning schedule. Each filled circle, ●, represents a step in the dunning schedule, such as a retry attempt or email reminder. The X marks the final action taken at the end of the schedule, such as canceling the subscription or marking the invoice as unpaid.

The line between filled circles loosely represents the number of days between steps. Shorter lines indicate steps that occur closer together, such as daily retries (for example, the first timeline shown in the image above). Longer lines indicate more time between steps, such as retries that occur 14 days apart (as seen in the second timeline in the image).  

Dunning Exemptions and Notification Timing

You can prevent dunning emails from being sent at inconvenient hours using per-Subscription settings. Use the dunning exemption or configure notification timing.

Follow these steps to access exemption or timing settings:

1. Ensure a dunning schedule is in place.
2. Navigate to the desired Subscription under Billing > Subscription.
3. On the Summary tab, locate the “Dunning Exemption” row and click Change.

Dunning Exemption

This setting prevents the Subscription from receiving dunning emails. However, it remains in "Past Due" status, and Invoices remain open until payment is received or the Subscription is canceled.

Notification Timing

Specify a time zone to restrict dunning emails from being sent between 9:00 PM and 8:00 AM in that zone.

Maxio Payments Fraud-Related Declines

If a payment fails due to suspected fraud, Advanced Billing will not attempt further charges for that Subscription during the dunning process.