What is Dunning?
Dunning is the process of recovering a failed subscription payment: the retry schedule, the emails asking the customer to update their card, and the eventual decision to cancel if nothing works. Revenue in dunning has not been lost yet, but it is the part of the book most at risk.
Most failed payments are not decisions. Cards expire, banks decline transactions they find unusual, and limits get hit. That is involuntary churn, and unlike the voluntary kind it is often recoverable with nothing more than a well-timed reminder. Published recovery rates for good dunning flows commonly land in the tens of percent, which makes it some of the cheapest revenue work available.
The reporting question is what to do with that revenue while the retries run. Removing it from MRR the moment a payment fails records a churn that has not happened, and then records a reactivation when the retry succeeds. Both are noise, and both corrupt your churn rate. The standard treatment is to keep the customer in MRR while service continues, and to report the exposure separately.
How to calculate Dunning
Past-due MRR = sum of MRR on customers with at least one failed or overdue subscription
- failed or overdue
- the billing provider reports the subscription as past due or unpaid
- MRR on customers
- their full current MRR, since service is usually still running
As a share of the book
Past-due share = past-due MRR ÷ total MRR x 100
Dunning example
Given
- Total MRR: $50,230
- 6 customers currently past due
- Those 6 carry $1,780 of MRR between them
Recovering two thirds of that is worth about $1,190 a month, roughly what a whole month of expansion produced in the same book, and it requires no new sale.
Why Dunning matters
- It is recoverable revenue that most teams never look at, sitting between a successful month and a churn event.
- Handled badly, it pollutes your metrics: premature cancellation records churn that did not happen, and the correction records a reactivation that did not either.
- The past-due balance is a leading indicator. A rising share often means a payment-method or geography problem rather than a product one.
Common Dunning mistakes
Cancelling on the first failure
Retrying on a sensible schedule recovers a meaningful share of failures. Cancelling immediately converts a temporary bank decline into a permanent loss.
Treating involuntary churn as a product signal
An expired card says nothing about whether the customer values the product. Blending the two hides both problems.
Never looking at the balance at all
Dunning usually runs inside the payment provider and reports nowhere else, so the exposure stays invisible unless a metrics tool surfaces it.
How Kometrics computes Dunning
Kometrics reads dunning status directly from each connected billing source (past due or unpaid on Stripe, Paddle and Creem, an overdue charge on Asaas) and reports past-due MRR as its own figure on the dashboard, with the customers behind it one click away. It is the number most metrics tools leave out entirely.
That revenue stays in MRR while the retries run, which is deliberate: the engine keeps customers in dunning out of churn so a failed payment cannot masquerade as a cancellation. When the retry finally fails and the subscription is cancelled, the churn is recorded then, on the date it actually happened.
Related terms
Churn rate is the share of your customers, or of your revenue, that you lost during a period. Which of the two you mean changes the number substantially, so the qualifier matters as much as the figure.
MRRMRR is the normalized monthly value of every active subscription you have right now. It is a run rate, not a cash figure: it answers what a month of your current book is worth, not what landed in the bank.
Net MRR movementNet MRR movement is the total change in MRR over a period once every movement is added up: new business, expansion and reactivation on one side, contraction and churn on the other. It is the bridge between where MRR started and where it ended.
Get this number from your billing data
Kometrics connects to Stripe, Paddle, Creem and Asaas and computes Dunning continuously, with every movement behind it. Free under $1,000 MRR.
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