Dunning & Collections
Last updated 12 Oct 2026
At a glance
Dunning pursues overdue payments through escalating steps: retry, remind, notify, restrict, suspend. Collections handles the debt dunning cannot recover: termination, agencies and write-off. Together they manage the gap between billed and collected revenue, for genuine customers who owe genuine amounts. From restriction onwards, every step is also a service change that must reach the network.
The picture
A correctly billed invoice goes unpaid. Pressure rises step by step; from restriction on, three states must move together.
1 · Trigger
Invoice past due
Direct debit returned, card declined or no payment
Path chosen by segment, value and payment history
2 · Escalation ladder
- 1Payment retryPayment gatewayday 2–3
- 2Friendly reminderNotificationday 5–7
- 3Formal noticeDunning engineday 14–21
- 4RestrictSOM / network policyday 30–45
- 5SuspendSLM / SOM / networkday 45–60
- 6Disconnect & collectSLM / billing / collectionsday 90+
Typical timings; configurable per segment
3 · Three states move together
Service state
barred
Network / service inventory
Commercial state
suspended for non-payment
SLM / product inventory
Billing state
recurring charge on or off?
Billing
On payment, all three reverse
Billing updated but network not: a paying customer without service
How it works
What dunning is for
Revenue was correctly billed, but has not yet been collected.
That sentence sets the scope. If the invoice was wrong, the problem belongs to billing and Revenue Assurance (6.9), and chasing it creates disputes. If the account was opened never to pay, it is fraud (6.10), and chasing it as debt recovers little.
Most postpaid payments are collected automatically by direct debit or card, but a significant share fail: declined cards, insufficient funds, expired payment methods, disputed charges. A failed or missed payment puts the account on a dunning path chosen by segment, value and payment history.
The escalation ladder
Payment retry
Payment gatewayRetry the failed payment method after 2–3 days. Many failures are transient; retry recovers 30–50% of initial failures with no customer impact.
Friendly reminder
CRM / notificationSMS or email 5–7 days after the failure, with a link to pay or update the payment method. Informational in tone.
Formal notice
Billing / dunning engineThe overdue amount, due date and consequences, typically at 14–21 days. May add a late-payment fee.
Restriction
SOM / network policy (PCRF/PCF)Outbound services restricted (international barred, data throttled) while inbound calls and payment channels stay open. Typically 30–45 days.
Suspension
SLM / SOM / networkService suspended; the subscription and the debt remain, and payment reactivates it. Typically 45–60 days.
Disconnection and collections
SLM / billing / collections agencyService disconnected, subscription terminated, final bill. The debt moves to internal recovery or an external agency; the number may be quarantined. Typically 90+ days.
Timing and severity of each step are configured per segment, payment history and account value.
Three states move together
A dunning suspension changes the service state (barred), the commercial state (suspended for non-payment) and possibly the billing state (does the recurring charge continue?). All three must move together, and reverse together on payment.
- Dunning suspends service but SLM is not updated: the subscription still shows active, billing continues and the debt grows.
- The customer pays but reactivation never reaches the network: a paying customer without service.
Credit management sets the boundary
- Credit scoring at onboarding, from bureau data or internal models, sets initial limits and deposits. Low scores may be offered prepaid only.
- Dynamic adjustment: on-time payers get higher limits; late payers get lower limits or tighter dunning timelines.
- Debt ageing: debt is grouped by age (30, 60, 90, 120+ days). Older debt is less likely to be recovered, and bad-debt provisions are based on the ageing profile.
- Write-off: unrecoverable debt is removed from receivables and recognised as a loss, under regulatory and accounting rules on timing and treatment.
APIs
TMF676 Payment Management handles payment operations. TMF666 Account Management carries the account status changes dunning drives. The restriction and suspension themselves travel as orders to SLM and SOM, not as billing updates.
Who owns what
| Entity | System of Record | System of Engagement | System of Reference | Notes |
|---|---|---|---|---|
| Open invoice and outstanding balance | Billing / accounts receivable | Self-care, contact centre | Dunning engine, Finance / ERP | Some estates hold receivables in an ERP subledger instead; there must be only one. |
| Dunning path and step for an account | Dunning engine | — | CRM, contact centre | Agents need to see it to explain and pause it. |
| Payment and payment method | Payment gateway / payment management | — | Billing | TMF676. |
| Subscription status (suspended for non-payment) | SLM / product inventory | Dunning engine (triggers the change) | Billing | — |
| Service barring state | Service inventory / network policy | SOM | — | Must match the commercial state at every step. |
| Credit limit and credit class | Credit management (often in CRM or billing) | — | Dunning engine, OCS | — |
In practice
Where receivables live in both billing and an ERP subledger, there are two views of what is owed and two possible dunning truths (7.3). Dunning must run from one.
Fraud and disputes leak into dunning. A subscription-fraud account looks like bad debt; a customer disputing a wrong bill looks like a late payer. Both need a way out of the ladder, or dunning escalates against the wrong problem and collections recovers little.
The trade-off
What it solves
A consistent, configurable path from a missed payment to collection or write-off, with pressure that rises by segment and value.
What it does not solve
- Wrong invoices, which belong to billing and Revenue Assurance.
- Accounts opened never to pay, which are fraud.
- Credit exposure granted at onboarding, which only credit management controls.
What it adds
- Service actions that must move service, commercial and billing state together, and reverse them on payment.
- Dunning paths per segment that someone must design, test and keep current.
- Regulatory limits on restriction, disconnection and write-off timing.
Architecture decision
How should dunning restrict and suspend service?
Through SLM and SOM as orders
Choose when the estate has catalog-driven order management; the change is recorded in product and service inventory and reversed the same way.
Direct from billing to network policy
Choose when order management cannot handle suspension yet and the barring must be fast; accept that inventories need reconciling.
Breaks if payment reverses the billing state but not the network barring. Paying customers stay suspended, call the contact centre, and the fix is manual each time.
Takeaways
Key Takeaways
- Dunning collects revenue that was correctly billed and not yet paid
- The ladder runs retry, reminder, formal notice, restriction, suspension, disconnection and collections
- From restriction on, service, commercial and billing state must move together and reverse together
- Credit management sets exposure before dunning starts: scoring, limits and deposits
- Wrong bills belong to billing and RA; never-pay accounts belong to fraud
Check yourself
A customer pays an overdue balance. Billing shows the account current, but they still cannot make calls. What went wrong?Show answerHide
The reactivation reached billing but not SLM, SOM or the network. Suspension moved three states and payment reversed only one. Dunning must drive reactivation through the same path that applied the suspension.
Payment retries are recovering far fewer failures than usual. Should you shorten the gap to the formal notice?Show answerHide
Not first. Find why retries fail: expired payment methods, a gateway issue or a change in segment mix. Escalating faster against customers whose payment failed for a technical reason creates complaints, not cash.
Why can a disputed invoice not simply follow the dunning ladder?Show answerHide
Dunning assumes the bill was correct. A disputed bill may be a billing or RA problem. Escalating it to restriction or suspension punishes the customer for the operator’s error.