Dun

In business language, to dun is to request payment from another party for debts that are outstanding way beyond the due date.

Dun can also refer to the person who is demanding payment from another.

For example, when a debt collector is undertaking activities to collect payments from a debtor, he can be labeled as the dun or the activities can be called dun.

Should collection of the money is unsuccessful, companies would have to write-off the receivables as a bad debt.

This essentially means that a current asset would be converted into an expense in the accounting statements.

Should the debt be partially or fully collected, then the receivable would be realized into cash funds.

Sometimes, companies find that a bulging receivables account is something to be proud of as it indicates how strong the business is in generating revenue.

But business people must be mindful that even though revenue might be generated, it counts for little in terms of the bottom line when customers don’t pay.

For this reason, when vendors and suppliers deal with a new customer for a new account, they often only accept cash terms. And would only offer credit terms when the customer has demonstrated credibility in making payments.

Otherwise, a seller might request that a new buyer he is not familiar with to pre-pay for products or services.

This would result in the customer incurring imputed costs. But would ensure that the seller have peace of mind dealing with him.

Every business would run into bad debtors who don’t pay and should be careful with who they deal with.

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