Credit Mngmt v/s Dunning

[Former Member]

Wanted to know difference between Credit Mngmt v/s Dunning ?

Let me know...

Thanks

Parag

[Former Member]

Hi,

Many of them coming with different answers , let me keep it simple guys

Credit Management is where this is assigned to a company code where it will allow you up to a limited credit which is set by the user or authorized person in the company...

Dunning is nothing but a reminder where to intimate the customer about the payment ....

See, guys I am not a consultant , Just I am searching for a job in SD

If I am wrong revert me back....

Edited by: kota santosh on Sep 30, 2009 4:44 PM

[Former Member]

Hi,

Dunning is one part of credit management.

But need not be also.

I will give you two examples.

1.For a customer the credit functionality is enabled means credit limit etc... are set for this customer.

If the customer didn't pay the amount even after the period specified in the payment terms is over then in that case we are going to generate the dunning letters and send them to the customer either by simple mail,Fax,intimation by call or personally etc like this different ways of reaching a customer.

But here in dunning also there are different levels.

2.Suppose for a customer there is no credit limit set.Credit functionlity is not tehre for this customer.

In this case,If the customer didn't pay the amount even after the period specified in the payment terms is over then in that case we are going to generate the dunning letters and send them to the customer either by simple mail,Fax,intimation by call or personally etc like this different ways of reaching a customer.

So Dunning is partly a part of credit management.

Regards,

Krishna.

[Former Member]

Hi Parag

Dunning is a part/process in credit management. In layman language, credit management is the checking of credit assigned to customers/partner and the usage of the same, also payments made by them, any violation of credit limits etc.

While dunning is the official letter send to customer as a reminder for payment due. Dunning can be of any mode, like sending letters, emails, phone calls, personal visit etc.

We can have multiple levels of dunning, depends on business.

Hope this clarifies your doubt.

[Lakshmipathi]

The simple difference between these two is that

a) Credit Management - will control the billing generation within a company code where if the outstanding amount exceeds the stipulated limit of a customer.

b) Dunning - you can frame a letter which can be sent to a customer once the billing document becomes due for payment. This will be in different stages.

=> In the first stage, you just make a formal request;

=> In the second stage, you remind the customer

=> In the third stage, you can make wordings such that it conveys a strong message but the wordings in a polite manner

=> In the fourth stage, still if you have not received the payment, a strong and final reminder can be sent stating that legal action would be initiated in case the payment is not received immediately

Of course, the modus operandi of dunning will differ from client to client

thanks

G. Lakshmipathi