For credit controllers overseeing a growing number of customers, overdue invoices can become a major operational bottleneck. When teams rely on spreadsheets, shared inboxes, or manual reminders, confusion is inevitable. Important invoices can slip through the cracks, and inconsistent messaging can frustrate customers.
Microsoft 365, formerly known as Office 365, provides cloud-based tools such as Outlook, Excel, Teams, and SharePoint, which enable collaboration across departments. However, without integration into the ERP, collections activity can remain fragmented, spread across emails and documents, and difficult to track.
Business Central centralises accounts receivable operations, allowing finance teams to configure reminder terms, escalation levels, and automated workflows. The system ensures consistent, professional communication while reducing the risk of missed invoices. Adding AI agents introduces adaptability, allowing reminders to be optimised according to historical payment patterns, customer behaviour, and risk factors.
What Is Microsoft Dynamics 365 Business Central?
Business Central is an all-in-one business management platform that combines finance, operations, sales, and customer management in a single solution. For accounts receivable, it allows organisations to track invoices and payment histories, automate reminders for overdue invoices, apply structured escalation rules, and generate reports that provide real-time visibility into collections performance.
Essentially, Business Central replaces multiple spreadsheets and scattered emails with a single, consistent system that ensures both operational efficiency and professional communication with customers.
What Is Dunning?
Dunning refers to the process of reminding customers about overdue invoices in a structured and consistent way. Rather than sending generic messages, organisations can establish a tiered escalation process. A first reminder typically communicates that an invoice is overdue in a neutral, polite tone. A second reminder references the previous communication and clarifies expectations, while a final reminder indicates escalation and may include interest or additional fees.
Business Central supports this tiered approach, allowing organisations to configure reminder rules, escalation levels, and optional finance charges. All communications are tracked against the customer account, providing full visibility and an audit trail.
Why Automate the Dunning Process?
Manual credit control often suffers from inconsistency. Staff may be too busy to send reminders on time, escalation rules may not be applied uniformly, and messages may vary in tone depending on who sends them. Over time, this inconsistency can increase debtor days and weaken collection discipline.
Automation eliminates reliance on memory or manual tracking. Overdue accounts are identified systematically, reminders are sent according to predefined policies, and each customer is treated fairly and consistently. Beyond efficiency, automation strengthens internal governance, improves cash flow predictability, and provides management with reliable data on collections performance. Importantly, automated dunning protects customer relationships by ensuring communications are structured, professional, and documented.
Understanding Dunning in Business Central
Within Business Central, dunning is a structured, configurable process. Reminder Terms define the overall logic for chasing overdue invoices, while multiple Reminder Levels within each term determine escalation steps, grace periods, and whether interest or additional fees are applied.
A typical policy might include:
A first reminder, issued shortly after the due date, written in a neutral and professional tone.
A second reminder, referencing previous communication and clarifying expectations.
A final reminder, indicating escalation and potential consequences, while remaining compliant and measured.
These rules are predefined, ensuring the system applies them uniformly across customers assigned to each reminder term.
How Automated Dunning Works in Business Central
Business Central’s reminders functionality is built around structured configuration rather than ad hoc communication.
Reminder Terms and Levels
Reminder Terms define the overall logic for chasing overdue invoices. Within each term, multiple Reminder Levels define escalation steps, grace periods, and whether interest or additional fees are applied.
Microsoft provides guidance on configuring reminder terms and defining escalation levels to ensure reminders are generated consistently (Microsoft Learn – Reminder Setup).
For example, a structured policy may include:
A first reminder issued shortly after the due date, written in a neutral and professional tone.
A second reminder referencing previous communication and clarifying expectations.
A final reminder indicating escalation and potential consequences, while remaining compliant and measured.
Because these rules are predefined, the system applies them uniformly across customers assigned to that reminder term.
Creating and Reviewing Reminders
Business Central allows finance teams to run the Create Reminders batch job to identify overdue ledger entries and generate reminder proposals. Microsoft explains how reminders can be created periodically and then reviewed before issuing (Microsoft Learn – Send Reminders).
This review stage is important. Disputed invoices, promised payments or exceptional circumstances can be considered before reminders are issued. Once approved, reminders are posted and recorded against the customer ledger, creating a clear audit trail.
Finance Charges and Compliance
Where contractually appropriate, organisations can configure Finance Charge Terms to apply interest or additional fees. Microsoft documents the setup of finance charges within Business Central (Microsoft Learn – Finance Charges).
In the UK, statutory guidance for late commercial payments outlines interest rates and recovery costs that may apply in B2B transactions (GOV.UK – Late Commercial Payments). Even if statutory interest is not automatically applied, understanding the framework helps shape internal policy.
It is essential that organisations align system configuration with contractual terms and legal requirements before enabling automated charges.
Scheduling with Job Queues
To remove manual dependency, reminders can be automated using Job Queue Entries. Business Central supports scheduling background tasks so processes can run recurrently without user intervention (Microsoft Learn – Job Queues).
This ensures that overdue accounts are identified on a consistent cadence, whether daily or weekly, and that no account is overlooked.
Automated Email Delivery
Business Central supports sending documents directly from within the application, including reminder letters via email. Microsoft provides guidance on sending documents as attachments and configuring default behaviours (Microsoft Learn – Send Documents by Email).
Standardising email templates and document sending profiles ensures tone and formatting remain professional across all reminders.
How AI Agents Enhance Dunning Workflows
Managing overdue invoices goes beyond sending reminders. The real challenge is what happens afterward: customers reply with questions, disputes arise, or promised payments are missed. AI agents transform collections by managing the full conversation automatically, ensuring follow-ups happen consistently without requiring constant human oversight.
These agents offer several key capabilities that make the collections process smarter and more efficient:
Managing Conversations: Handle customer replies and routine questions while keeping interactions professional and seamless.
Prioritising Accounts: Flag high-risk invoices or accounts that need urgent attention.
Personalising Outreach: Tailor messaging based on payment history and customer behaviour.
Recording Commitments: Capture promises to pay or updated invoice information and trigger follow-ups automatically.
Escalating Complex Cases: Route challenging situations to human controllers with full context for faster resolution.
Platforms like Paraglide leverage these capabilities to automate collections end-to-end, from the first reminder to resolution, freeing finance teams from repetitive tasks while improving cash flow and customer relationships. By combining automation and intelligence, AI agents make dunning adaptive, proactive, and more effective.
The Benefits of Automated and AI-Enhanced Dunning
Automation and AI transform collections from a manual, reactive process into a structured, intelligent workflow. The improvements are tangible: faster payments, fewer disputes, lower operational effort, and better visibility into accounts receivable.
Benefit | How AI Agents Deliver It |
Faster Payments | AI monitors overdue invoices, prioritises high-risk accounts, and sends personalised follow-ups to accelerate collections. |
Reduced Manual Work | Handles replies, tracks commitments, and manages routine queries, freeing finance teams from repetitive tasks. |
Fewer Payment Disputes | Responds promptly to questions, provides context, and captures interactions to reduce misunderstandings. |
Improved DSO and Cash Flow | Continuously monitors accounts and ensures follow-ups happen automatically, shortening the collection cycle. |
Stronger Customer Relationships | Personalises tone and content based on behaviour, maintaining professional, consistent communication. |
Conclusion
Automating dunning letters is no longer just a way to save time — it has become a strategic tool for managing cash flow, reducing disputes, and improving customer relationships. By combining structured automation with AI agents, organisations can move from reactive collections to a proactive, intelligent workflow.
AI agents take the process a step further by managing two-way conversations, prioritising high-risk accounts, personalising messaging, and capturing commitments automatically. They ensure that follow-ups happen consistently, complex cases are escalated with full context, and finance teams can focus on higher-value tasks rather than repetitive administrative work.
The result is faster payments, more predictable cash flow, fewer disputes, and stronger, more professional interactions with customers. In a world where every day of delayed payment affects working capital, integrating AI into dunning workflows is not just a technology upgrade — it’s a step toward smarter, more resilient finance operations