The dunning system looks at each account, one at a time, starting from the highest balance and working down.

For each account, the system determines if the account qualifies to go to the next dunning level. It does this by looking at the account’s dunning setup, the dunning procedure, the dunning procedure levels, and the account’s open items. If an account qualifies to go to the next level, a dunning record is created.

The system then looks at each of the account’s open items, which are assessed on their own merits, to determine if they individually qualify to go to the next dunning level. The first time that an open item

qualifies, it is given a level 1. On subsequent dunning runs, if the same open item qualifies for the next level, it is given the next level 2, and so on.

The dunning level of the account’s dunning record is the highest dunning level of any of its open items.

Refer to  How it works for the detailed dunning rules.