The verdict in three sentences
A Toronto B2B services firm that lets its days sales outstanding (DSO) drift to 95 is giving its clients free credit and straining its own cash. An automated dunning workflow by email, SMS and phone tasks, triggered at day -5, +7 and +30 with an embedded payment link, costs roughly 15,000 to 35,000 CAD in 2026. Bringing DSO down toward 60 days typically frees six figures of cash for a firm billing 5 million CAD a year.
Why manual collections fail
The CFO of a 60-person IT managed services firm in Toronto bills monthly retainers and projects to banks, insurers and retailers. Her AR clerk follows up when time allows, mostly by phone, rarely before day 45. Many mid-sized Canadian firms share this pattern: collections depend on one person, nothing is logged, and clients learn they can wait.
Most late payments are not bad faith. A missing PO number, an invoice sent to the wrong inbox, a client approval workflow or a contact on leave: about half of overdue invoices unblock as soon as the right document reaches the right person. Automation handles exactly that half and frees the team for genuine disputes.
The standard dunning sequence and channels
The sequence below is a starting point, tuned by client segment. Enterprise accounts get a more formal tone and no SMS; small clients get a tighter rhythm.
| Step | Trigger | Channel | Content | Escalation |
|---|---|---|---|---|
| Day -5 | Due in 5 days | Friendly reminder, PDF invoice, payment link | None | |
| Day +1 | Past due | Email + SMS | Overdue notice, PO reference | None |
| Day +7 | Still unpaid | Email + personal note | Tailored message, pay by card, EFT or Interac e-Transfer | Account manager copied |
| Day +15 | Still unpaid | Scheduled call | Task created for AR with full history | Account owner |
| Day +30 | Still unpaid | Formal email letter | Final notice, contractual late interest restated | CFO |
| Day +45 | No agreement | Possible service hold | Per contract | CEO |
The embedded payment link matters most for smaller invoices: a client who can pay 6,000 CAD by card or e-Transfer from their phone often pays within the hour. For banks and large groups, EFT remains the norm, and the link mainly delivers the invoice, PO and remittance details in one click.
Budget and options in 2026
Three approaches coexist in the Toronto market. Amounts are 2026 ballparks.
| Option | Upfront cost | Recurring cost | Lead time | Limits |
|---|---|---|---|---|
| Dunning module in existing accounting (QuickBooks, NetSuite, Sage) | 1,000 to 4,000 CAD setup | Existing licence | 2 to 3 weeks | Email only, rigid sequences |
| AR automation SaaS | 0 to 3,000 CAD onboarding | 400 to 1,500 CAD a month | 2 to 4 weeks | Per-user pricing, limited custom logic |
| Custom workflow connected to the ledger | 15,000 to 35,000 CAD | Maintenance plus SMS fees | 5 to 8 weeks | Needs precise scoping |
| SMS unit cost | 0.01 to 0.03 CAD per message | By volume | Immediate | Short text, high open rate |
| Card processing on payment link | About 2.5 to 3 % per transaction | By volume | Immediate | Often passed through or absorbed |
Custom work makes sense when you want to combine your ledger, payment link, SMS, CRM and a cash dashboard, which off-the-shelf tools rarely do together. See our custom web applications and AI automation offers, which can also classify client replies automatically (promise to pay, dispute, document request).
Mini case study
Rachel, CFO of the managed services firm, bills 5,000,000 CAD a year. At 95 days DSO, receivables stand at about 5,000,000 x 95 / 365 = 1,301,000 CAD.
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Target: 60 days, or 5,000,000 x 60 / 365 = 822,000 CAD. In year one the firm aims for a cautious drop to 85 days, freeing 5,000,000 x 10 / 365 = about 137,000 CAD of cash, then continues gradually.
Project cost: 28,000 CAD plus around 150 CAD a month in SMS fees. The line of credit avoided, at roughly 8 % a year, saves about 11,000 CAD of interest on 137,000 CAD. Add 6 hours a week of phone chasing removed from the AR clerk's schedule, worth about 10,000 CAD a year at a 35 CAD loaded rate. Payback lands at around 15 months on hard savings alone, faster once the freed cash funds growth.
FAQ
How much does dunning automation cost in Toronto?
As a 2026 ballpark, a custom workflow connected to your ledger costs 15,000 to 35,000 CAD. Add SMS fees of 1 to 3 cents per message and card fees of about 2.5 to 3 % on paid links.
Will automated reminders upset enterprise clients?
Not if the sequence is segmented. Enterprise clients get 3 formal messages instead of 6, and the account manager is copied from day 7 to protect the relationship.
Is SMS dunning allowed under Canadian rules?
Transactional messages about an existing invoice generally fall outside CASL's commercial message scope, but keep consent records and an opt-out. Collection agency rules in Ontario apply only once a third party collects.
What DSO should we target?
Sixty days is a realistic target for B2B services. Moving from 95 to 85 in year one is already meaningful and frees about 137,000 CAD on 5 million CAD of billings.
How long until it is live?
Plan 5 to 8 weeks, including 1 to 2 weeks to clean client contact records and map PO requirements by account.
Let's scope your project. Share your invoice volume and accounting system, and we will define the dunning sequence and go-live timeline. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
