Dunning Management
Dunning is the automated process of recovering failed payments from customers. When a payment fails — whether due to insufficient funds, expired cards, or gateway errors — BillHive’s dunning system takes over to retry the payment, notify the customer, and take appropriate action to maximize revenue recovery.
Why Dunning Matters
Involuntary churn (customers lost due to payment failures, not by choice) accounts for 20–40% of all subscription churn. Without dunning, every failed payment results in lost revenue. With BillHive’s dunning recovery system, you can recover 30–70% of failed payments automatically.
| Metric | Without Dunning | With Dunning |
|---|---|---|
| Involuntary churn | 5–10% of subscribers | Reduced to 1–3% |
| Revenue recovered | 0% of failed payments | 30–70% recovered |
| Customer retention | Lost at first failure | Multiple recovery chances |
| Average recovery time | N/A | 3–7 days for most |
How It Works (High Level)
When a payment fails in BillHive, the system follows a 6-phase recovery process over 30 days:
Payment Fails → Soft Retry → Smart Retry → Grace Period → Escalation → Hard Action → Win-Back
(Day 0) (Day 0) (Day 1-7) (Day 7-14) (Day 14-21) (Day 21) (Day 30+)- Soft Retry (Day 0) — Immediate retries for temporary failures (soft declines)
- Smart Retry (Day 1–7) — Scheduled retries at optimal intervals with customer emails
- Grace Period (Day 7–14) — Subscription stays active; features may be restricted; customer can self-serve payment update
- Escalation (Day 14–21) — Subscription paused; high-value accounts flagged for manual review; continued retries
- Hard Action (Day 21) — Subscription cancelled; invoice written off
- Win-Back (Day 30+) — Post-cancellation recovery campaign with reactivation offer
At every retry and check point, if the payment succeeds, the subscription is immediately restored and the dunning process ends.
Entry Points
Dunning is triggered automatically when payment collection fails in any of these workflows:
| Workflow | Trigger | What Happens |
|---|---|---|
| Payment Collection | Invoice due date passes and mandate capture fails | Subscription marked as dunning; invoice marked overdue |
| Subscription Renewal | Renewal mandate payment fails after settlement wait | Subscription marked as dunning |
| Subscription Expiration | Expiration settlement payment fails | Subscription/account marked as dunning |
| Subscription Cancellation | Cancellation balance collection fails | Account marked as dunning |
Dunning Statuses
When a subscription enters dunning, its status changes to In Dunning. This status is visible in the subscription list, subscription detail page, and via API.
| Status | Meaning |
|---|---|
In Dunning | Payment failed; automated recovery in progress |
Active | Payment recovered; subscription restored |
Paused | Dunning escalated; subscription suspended pending payment |
Cancelled | Dunning exhausted; subscription terminated |
Key Recovery Levers
- Decline Classification — Soft declines (temporary) get immediate retries; hard declines (permanent) skip to customer outreach
- Smart Retry Timing — Retrying at optimal times recovers 20–30% of failures automatically
- Payment Method Update — Self-serve update link in dunning emails recovers another 15–25%
- Grace Period — Keeping service active during recovery prevents permanent churn
- Escalating Communication — Each email touchpoint recovers incremental percentage
- Win-Back Campaign — Recovers 5–10% of customers who fully churned
Related Topics
- How Dunning Works — Detailed step-by-step dunning flow
- Configure Dunning — Set up retry schedules and actions
- Dunning for Payment Types — Card, direct debit, and offline payment dunning
- Manage Dunning — Pause, resume, and stop dunning
- Write-Off — Writing off uncollectible invoices
- Debt Collection Agencies — External collection for exhausted dunning