A 4-step client dunning procedure: method and templates

Quick answer. An effective client dunning procedure follows 4 steps: a preventive reminder before the due date, a firm reminder after the due date, a formal notice by registered letter, then contentious recovery. Each step has its purpose, tone and template. Late-payment penalties and the 40 euro indemnity are owed by operation of law as soon as payment is late.

An unpaid invoice is almost never inevitable; it is usually an organisation gap. Among the files we handle, the businesses that collect best are not those with the best clients, but those that apply a regular, dated and systematic dunning procedure. Conversely, the most common mistake is to wait until the delay strains cash flow before reacting, then to try everything at once, without any gradation.

This article describes a 4-step client dunning method, the role of each reminder template, and the exact calculation of penalties and the fixed recovery indemnity. For a broader view of recovery levers, see our complete debt recovery guide, which complements this procedure.

Ad-hoc reminders rely on one person's memory and availability. They collapse as soon as activity picks up. A graduated procedure, by contrast, turns dunning into a predictable routine.

Each step pursues a distinct purpose. The preventive reminder maintains the relationship. The firm reminder recalls the obligation. The formal notice prepares the legal ground. Litigation brings in the judge.

The tone rises gradually, but never at random. A client who receives a formal notice on the first day of delay digs in. A client who is never reminded learns that paying late carries no consequence.

Our reading. The value of a dunning procedure lies not in the firmness of the final letter, but in the regularity of the first reminders. A preventive reminder sent on time prevents more unpaid invoices than all the formal notices combined.

Before the first reminder, everything depends on the invoice itself. An incomplete invoice weakens every reminder step that follows.

The default payment term is 30 days from receipt of the goods or completion of the service. By agreement between professionals, it cannot exceed 60 days from the invoice issue date, or 45 days end of month (commercial code, article L441-10).

Three statements are mandatory on the invoice and in your general terms of sale: the due date, the late-payment penalty rate, and the 40 euro fixed recovery indemnity. Their absence exposes you to a penalty and weakens any later action.

In practice. Lock these statements once into your invoice template and your terms. Our administrative and accounting management builds this check into the setup of your invoicing, so that every document goes out compliant.

The preventive reminder is sent a few days before the payment deadline. It blames nothing; it confirms.

Its purpose is twofold: to verify that the invoice has been received and to spot any dispute early. A client who contests an amount will say so more readily before the due date than after.

The preferred channel is a short, factual email. You recall the invoice number, the amount and the deadline, and you invite the client to flag any issue.

Preventive reminder template: "Hello, unless we are mistaken, invoice no. ... for ... euros falls due on ... . We remain available should you need any information to process it."

From the day after the due date, the tone changes. The invoice is payable, and the law confirms it.

Late-payment penalties and the 40 euro indemnity are owed by operation of law, without any reminder being required (article L441-10). In other words, you do not need the client's authorisation for them to accrue: they apply from the first day of delay.

The firm reminder recalls this point, sets a short new deadline and remains open to dialogue. Date the message and keep proof, because this document will matter if the file hardens.

Firm reminder template: "Hello, invoice no. ... has been due since ... and remains unpaid. We remind you that late-payment penalties and a 40 euro indemnity are owed by operation of law. Please settle within 8 days or let us know of any difficulty."

The formal notice is the formal step preceding litigation. It is sent by registered letter with acknowledgement of receipt.

It sets a final deadline, precisely quantifies the principal, the penalties and the indemnity, and announces that the judge will be seised failing payment. Its function is not only to pressure: it constitutes dated proof of your action.

The acknowledgement of receipt must be kept carefully. It establishes the date on which the debtor was formally put on notice, a useful starting point for what follows.

The underrated risk. Many businesses send a formal notice by ordinary mail or email. In the event of litigation, proof of receipt then becomes hard to provide, and the file's chronology loses its strength.

Before going further, quantify precisely what is owed. The calculation rests on three elements.

The late-payment penalty rate equals the European Central Bank's refinancing key rate plus 10 points. In the first half of 2026, based on an ECB rate of 2.15% on 5 February 2026, this rate is 12.15%. It can never be lower than three times the legal interest rate.

The fixed recovery indemnity is 40 euros per late invoice (articles L441-10 and D441-5). It is owed automatically. If your actual recovery costs exceed this amount, a supplement is possible upon supporting evidence.

Common case. An invoice of 6,000 euros paid 30 days late generates, for guidance, penalties in the order of 6,000 x 12.15% x 30 / 365, i.e. about 60 euros, plus the 40 euro indemnity. The amount may seem modest on a single invoice, but it becomes significant across a portfolio of recurring clients. We recommend clearly setting the penalty calculation base in your terms of sale to avoid any dispute.

Contentious recovery offers several routes. The payment order is a simplified procedure suited to a clear, undisputed debt. The interim payment claim addresses urgency. The full-merits summons applies when the dispute is serious.

2026 points of attention. The action for payment is time-barred after 5 years between professionals (article L110-4 of the commercial code), and after 2 years for a professional's claim against a consumer. An old debt left without a reminder can become legally unrecoverable, regardless of the debtor's solvency.

In the event of a dispute, the strength of your file rests on traceability. The judge expects dates, proof of sending and a compliant invoice.

An invoice bearing the three mandatory statements, a registered formal notice with acknowledgement of receipt and a history of dated reminders form a file that is hard to challenge. Conversely, oral or undated reminders weaken the creditor's position.

Trade-off. Should you litigate or negotiate an instalment plan? For a long-standing client temporarily in difficulty, a written, dated and signed instalment plan preserves both the relationship and the recovery. For a debtor who no longer replies, a payment order is faster and cheaper than a long series of ineffective reminders. Our outsourced CFO service for startups and SMEs helps you decide based on the cash-flow impact.

A procedure is only worth as much as its execution. Automating reminders shortens the average payment delay without tying up a full-time person.

An invoicing tool such as Pennylane triggers reminders on the planned dates and quantifies penalties automatically. On the collection side, a business account such as Qonto eases reconciliation and the real-time detection of late payments.

Monitoring indicators remains essential. Track the DSO (average payment delay) and the share of overdue invoices month after month to measure the procedure's effect. The tax treatment of charges and provisions on doubtful debts falls within the firm's tax support.