Odoo 19 Payment Follow-Up:
Automate Dunning Letters & Reduce DSO by 30%

Late Payments Are Not a Collections Problem—They're a Systems Problem

The average B2B invoice in 2026 is paid 15 days past its due date. For a mid-market company billing $2M per month, that's $1M in working capital permanently trapped in accounts receivable. Most finance teams respond by assigning a junior accountant to manually email overdue customers from a spreadsheet—a process that is inconsistent, unscalable, and almost always deprioritized when month-end close rolls around.

Manual follow-up fails because it relies on human memory and discretion. The friendly reminder at 7 days overdue doesn't go out because the accountant was reconciling bank statements. The firm notice at 30 days gets skipped because "that customer always pays eventually." The final warning at 60 days never escalates to legal because nobody wants to damage the relationship. Meanwhile, your DSO (Days Sales Outstanding) creeps up, your cash conversion cycle stretches, and your CFO starts asking why the credit line keeps growing.

Odoo 19's payment follow-up module solves this by turning your dunning process into a rules-based, automated workflow. You define the escalation levels, design the email templates, set the triggers, and let the system execute. Every overdue invoice gets the right message at the right time—no spreadsheets, no forgotten follow-ups, no awkward "I think we already emailed them" conversations. This guide walks you through the complete setup: configuring follow-up levels, designing dunning templates, automating actions, scheduling sends, and measuring the impact on your DSO.

Configuring Follow-Up Levels: From Friendly Reminder to Legal Escalation

Odoo's follow-up system is built around follow-up levels—a tiered escalation path that defines what happens at each stage of overdue payment. Each level specifies the number of days after the due date, the communication channel, and the action to take. The key is designing levels that balance firmness with customer relationship preservation.

Navigating to Follow-Up Configuration

In Odoo 19, follow-up levels are configured under Accounting → Configuration → Follow-Up Levels. If you don't see this menu, ensure the account_followup module is installed. On Odoo.sh and Odoo Online, it's bundled with the Accounting app. On-premise installations need to install it explicitly.

Recommended Four-Level Dunning Structure

Creating Follow-Up Levels via the UI

# Navigate to: Accounting → Configuration → Follow-Up Levels
# Click "New" to create each level

# Level 1 settings:
Name:           "Friendly Reminder"
Delay (days):   7
Description:    "First polite reminder for overdue payment"
Send Email:     ✓ (checked)
Send SMS:       ✗ (unchecked)
Send Letter:    ✗ (unchecked)
Manual Action:  ✗ (unchecked)
Join Open Invoices: ✓ (checked)

# Level 2 settings:
Name:           "Firm Notice"
Delay (days):   21
Send Email:     ✓ (checked)
Send SMS:       ✓ (checked)
Manual Action:  "Log a note on the partner record"
Join Open Invoices: ✓ (checked)

# Level 3 settings:
Name:           "Final Warning"
Delay (days):   45
Send Email:     ✓ (checked)
Send SMS:       ✓ (checked)
Manual Action:  "Notify account manager via internal note"
Auto Execute:   ✓ (checked)
Join Open Invoices: ✓ (checked)

# Level 4 settings:
Name:           "Legal / Collections"
Delay (days):   60
Send Email:     ✓ (checked)
Manual Action:  "Assign to collections team"
Auto Execute:   ✗ (requires manual confirmation)
Join Open Invoices: ✓ (checked)

Automating Follow-Up Actions: Email, SMS, Block Sales, and Collections Assignment

Sending emails is only half the dunning equation. Effective follow-up requires automated actions that escalate pressure without human intervention. Odoo 19 lets you chain multiple actions to each follow-up level: sending communications, blocking business operations, logging activities, and routing to specialized teams.

Blocking Sales Orders for Overdue Customers

One of the most powerful follow-up actions: automatically preventing new sales orders for customers who have passed a certain overdue threshold. This prevents the classic problem of shipping $50,000 in new product to a customer who hasn't paid last quarter's $50,000 invoice.

# In Odoo 19, the follow-up level can trigger a
# "Manual Action" or an automated server action.
# To block sales, use the built-in partner trust mechanism:

# Method 1: Use the built-in "Block" action on Level 3
# In Follow-Up Level configuration:
#   → Action: "Block the partner"
# This sets partner.payment_next_action_date and triggers
# a warning on sales order creation.

# Method 2: Custom server action for granular control
# Navigate to: Settings → Technical → Server Actions

# Server Action configuration:
Action Name:    "Block Sales for Overdue Partner"
Model:          res.partner
Action Type:    Execute Python Code

# Python code:
for partner in records:
    # Set the partner's invoice status to "blocked"
    partner.sudo().write({
        'invoice_warn': 'block',
        'invoice_warn_msg': (
            'CREDIT HOLD: This customer has invoices '
            'overdue by 45+ days. New sales orders '
            'require approval from the Finance team. '
            f'Total overdue: {partner.total_due} '
            f'{partner.currency_id.symbol}'
        ),
    })
    # Log the action
    partner.message_post(
        body='Sales blocked due to overdue follow-up '
             'reaching Level 3.',
        message_type='notification',
        subtype_xmlid='mail.mt_note',
    )

SMS Notifications for Urgent Follow-Ups

Email follow-ups have open rates around 20-30% for transactional messages. SMS open rates exceed 95%. For Level 2 and Level 3, adding an SMS notification dramatically increases the likelihood of response. In Odoo 19, SMS follow-up requires the sms module and an active IAP (In-App Purchase) credit balance for SMS sending.

# SMS Template (160 chars recommended):
{{ object.company_id.name }}: Your account has
{{ total_due }} overdue. Please arrange payment
to avoid service interruption. Questions? Call
{{ object.company_id.phone }}

Assigning to Collections Team

At Level 4, the automated system hands off to humans. The key is making the handoff clean: the collections team needs context, not just a name and a number. Configure the manual action to create an activity assigned to the collections team with all relevant details:

# Server action: Assign to Collections Team
for partner in records:
    # Create a scheduled activity for the collections team
    partner.activity_schedule(
        activity_type_xmlid='mail.mail_activity_data_todo',
        summary=f'Collections: {partner.name} – '
                f'{partner.total_due} '
                f'{partner.currency_id.symbol} overdue',
        note=(
            f'<p><strong>Partner:</strong> '
            f'{partner.name}</p>'
            f'<p><strong>Total Overdue:</strong> '
            f'{partner.total_due} '
            f'{partner.currency_id.symbol}</p>'
            f'<p><strong>Oldest Due Date:</strong> '
            f'{partner.oldest_due_date}</p>'
            f'<p>All automated follow-up levels have '
            f'been exhausted. Manual collection action '
            f'required.</p>'
        ),
        # Assign to the collections team lead
        user_id=env.ref(
            'my_module.collections_team_lead'
        ).id,
        date_deadline=fields.Date.today()
            + timedelta(days=3),
    )

Tracking Follow-Up Effectiveness with Aging Reports and DSO Metrics

Setting up automated dunning is useless if you can't measure its impact. The two metrics that matter most: the accounts receivable aging report (how much money is overdue and for how long) and DSO (how many days it takes, on average, to collect payment after invoicing). Odoo 19 provides both natively—but extracting actionable insights requires knowing where to look.

The Aged Receivable Report

Navigate to Accounting → Reporting → Aged Receivable. This report buckets your outstanding receivables into aging periods: Current, 1-30 days, 31-60 days, 61-90 days, and 90+ days. The default periods align with standard financial reporting, but you can customize them under the report's options menu.

Calculating DSO in Odoo

# DSO = (Accounts Receivable / Net Credit Sales) × Days
# Odoo doesn't surface DSO as a built-in KPI, but you can
# compute it with a scheduled action or a custom dashboard.

from datetime import date, timedelta
from odoo import api, fields, models


class ResCompany(models.Model):
    _inherit = 'res.company'

    x_dso = fields.Float(
        string='Days Sales Outstanding',
        compute='_compute_dso',
        digits=(6, 1),
    )

    @api.depends_context('force_dso_recompute')
    def _compute_dso(self):
        today = fields.Date.today()
        period_start = today - timedelta(days=90)

        for company in self:
            # Total outstanding receivables (unpaid invoices)
            receivable = sum(
                self.env['account.move'].search([
                    ('company_id', '=', company.id),
                    ('move_type', 'in',
                     ['out_invoice', 'out_refund']),
                    ('payment_state', '!=', 'paid'),
                    ('state', '=', 'posted'),
                ]).mapped('amount_residual')
            )

            # Net credit sales in the period
            credit_sales = sum(
                self.env['account.move'].search([
                    ('company_id', '=', company.id),
                    ('move_type', '=', 'out_invoice'),
                    ('state', '=', 'posted'),
                    ('invoice_date', '>=', period_start),
                    ('invoice_date', '<=', today),
                ]).mapped('amount_total')
            )

            days_in_period = 90
            if credit_sales:
                company.x_dso = (
                    receivable / credit_sales
                ) * days_in_period
            else:
                company.x_dso = 0.0

Building a Follow-Up Effectiveness Dashboard

The most actionable view combines aging data with follow-up activity. Track these metrics weekly:

• Level 1 conversion rate: What percentage of partners pay within 7 days of the friendly reminder? If it's below 40%, your Level 1 template may be too soft or arriving too late.
• Escalation rate: What percentage of partners reach Level 3 or Level 4? If more than 15% of your dunning cases escalate to final warning, you may have a customer onboarding problem (bad payment terms) rather than a collections problem.
• DSO trend line: Plot your monthly DSO over time. After enabling automated follow-ups, you should see a measurable decline within 60-90 days. If DSO doesn't move, check whether the cron is actually running and whether your templates are rendering correctly.
• Top delinquent accounts: The Pareto principle applies to AR. Typically 20% of your customers represent 80% of your overdue balance. These accounts need personalized attention beyond automated dunning.

3 Follow-Up Configuration Mistakes That Sabotage Your Dunning Process

Optimization Metadata