What is dunning?
Dunning is how a creditor chases a past-due bill with a series of notices. This cheat sheet covers how to think about it, how the notices escalate and what to watch when your company is the one past due. The detail is further down.
How to think about it
- It starts after the due date. A dunning letter only goes out on an item that is already past due. A follow-up letter usually comes first.
- The tone tracks the age of the debt. Ohio's state accounting system runs three letter levels, from a mild past-due notice to a strongly worded demand for payment.
- A demand letter spells out the terms. Federal rules require it to state the basis for the debt, any interest or penalties, the date to pay by and a contact person.
- Losing credit is the end point. One hotel management company suspends direct billing for accounts more than 60 days past due.
A typical dunning ladder
- Follow-up letterTypically sent before the dunning letters start.
- First levelA mild past-due notice for items 1 to 45 days past due.
- Second levelSent for items 46 to 90 days past due.
- Third levelA strongly worded demand for payment once an item is more than 90 days past due.
When your company is the one past due
- Direct bill privileges can be pulled. Remington's policy denies further direct billing to any company more than 60 days delinquent on a past bill, with notice by certified letter.
- The card on file can be charged. Where Remington takes a card authorization with a direct bill, the card is charged if the bill isn't paid within 25 days of the first billing.
- Dispute charges early. On federal travel cards, disputed amounts can't trigger a suspension, but the cardholder has 90 days from the transaction date to start a dispute.
How it works on Engine
With Engine Direct Bill, Engine extends a line of credit, pays eligible hotels and invoices the company in arrears on one consolidated invoice. Invoice schedules, payment terms and credit limits come from your agreement with Engine.
Questions
What is a dunning letter?
A notice to a customer that an invoice is past due. Ohio's state accounting manual describes levels running from a mild past-due notice to a strongly worded demand for payment.
How many dunning letters should you send?
There's no fixed number. For federal agencies, the content, timing and number of demand letters depend on the type and amount of the debt and the debtor's response, and generally one demand letter should suffice.
What should a demand letter include?
Under federal rules, the basis for the debt and any right to a review, the standards for interest, penalties or costs, the date to pay by to avoid them, and a contact person or office. The pay-by date generally should be no more than 30 days from mailing.
What happens if a company ignores a hotel's past-due invoices?
At hotels managed by Remington, an account more than 60 days delinquent loses further direct billing, and the hotel's credit committee reviews accounts 60 days and older each month.
When does a federal travel card account become past due?
When payment for undisputed amounts hasn't been received within 45 calendar days of the billing date. Repeated nonpayment can lead to suspension and then cancellation.
Sources
- State of Ohio, Office of Budget and Management, Creating Customer Dunning Letters (OAKS FIN Process Manual), accessed November 2, 2026.
- Electronic Code of Federal Regulations, 31 CFR 901.2: Demand for payment, accessed November 2, 2026.
- U.S. Department of the Treasury, Bureau of the Fiscal Service, Demand Letter (TFX glossary), accessed November 2, 2026.
- Remington Hotels, Section II: Direct Bill / Credit Policy, accessed November 2, 2026.
- U.S. General Services Administration, Managing Your GSA SmartPay Travel Program, accessed November 2, 2026.
- Engine, Direct Bill for Company Hotel Travel, accessed November 2, 2026.