What is dunning procedure type in SAP FS-CD - Collections/Disbursements?

SAP Term: dunning procedure type

• Component: FS-CD

• Component Name: Collections/Disbursements

• Description: Defines how and in what way items in a contract due for dunning are grouped dunning group. Depending on the product group, a distinction is made between single, contract and total dunning notices. In a single dunning notice, all the items in a contract due for dunning are dunned individually and independent of one another. In other words, more than one item in a contract may be subject to dunning at the same time. In a contract dunning notice, the due items in a contract are also dunned individually. However, in contrast to the single dunning notice, there can only be one dunning notice for each contract. Only the oldest document is dunned. In a total dunning notice, all items due at the beginning of a dunning procedure and all items that become due during the procedure as long as they do not relate to initial premiums are dunned together in one notice. Initial premiums are dunned individually. Renewal premiums can only be dunned once their initial premiums are no longer

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• Key Concepts: 
  A dunning procedure type is a component of the SAP Financial Services Collections and Disbursements (FS-CD) module. It is used to define the rules and parameters for a dunning process, which is a process of sending out reminders to customers who have overdue payments. The dunning procedure type defines the criteria for when a reminder should be sent, how often it should be sent, and what information should be included in the reminder.
  
  How to use it: 
  The dunning procedure type is used to set up the parameters for a dunning process. This includes defining the criteria for when a reminder should be sent, how often it should be sent, and what information should be included in the reminder. The dunning procedure type can also be used to define the actions that should be taken if a customer does not respond to the reminder. For example, it can be used to define when an account should be blocked or when legal action should be taken.
  
  Tips & Tricks: 
  When setting up a dunning procedure type, it is important to consider the customer’s payment history and preferences. For example, if a customer has always paid on time in the past, then it may not be necessary to send out frequent reminders. On the other hand, if a customer has a history of late payments, then more frequent reminders may be necessary. Additionally, it is important to consider the customer’s preferred method of communication when setting up the dunning procedure type. For example, some customers may prefer to receive reminders via email while others may prefer text messages or phone calls. 
  
  Related Information: 
  The SAP Financial Services Collections and Disbursements (FS-CD) module also includes other components such as payment plans and payment methods that can be used in conjunction with dunning procedure types. Additionally, there are other modules within SAP such as Accounts Receivable (AR) and Accounts Payable (AP) that can also be used in conjunction with dunning procedure types.