What It Means (Simple Explanation)
A subscription pause temporarily suspends billing and service for a customer—without canceling their contract. It lets customers take a break while keeping their account active for future reactivation.
Example
A customer on a $500/month plan pauses their subscription for two months. During the pause, they aren’t billed and can’t access premium features—but their plan resumes automatically at the start of month three.
Why This Matters (To SaaS & Finance Teams)
Pausing a subscription sounds simple. But without automation, it creates inaccurate reporting and a poor customer experience. Metrics such as ARR/MRR, net revenue retention, churn, and customer count can be inaccurately reported during the pause.
Ordway automates subscription pause workflows—adjusting billing schedules, updating contract terms, and syncing rev rec rules—so finance gets clean data and customers get flexibility.
How It Works (Break It Down Simply)
- Customer initiates a pause from within the subscription management section of the service
- Billing is suspended for the pause duration
- No charges issued during the paused period
- Subscription autoresumes or renews at a future date
- Rev rec adjusts based on pause duration
- General Ledger entries reflect deferred revenue corrections if prepaid
Common Headaches
- Manually tracking paused periods in spreadsheets
- Forgetting to restart billing after the pause
- Inaccurate rev rec due to midterm disruptions
- Misaligned renewals or invoice dates
- Counting the customer as churned versus paused
Best Practices
- Define a clear pause policy (frequency, duration, eligibility)
- Automate billing holds and resume triggers
- Track paused periods in your revenue system—not offline
- Sync contract terms and billing cycles on resume
- Communicate clearly with customers about what’s suspended
- Define policies for how to track ARR/MRR, churn, retention rates for paused accounts
When to Use Subscription Pause
- Seasonal SaaS use cases (e.g., education, retail)
- Customers on the verge of churn needing a break
- Temporary service suspensions for failed payments or SLA issues
- Usagebased subscriptions with low activity months
- COVIDera or economic hardship relief programs
KPI Impact / What It Affects
- Impacts deferred revenue and rev rec schedules
- Affects churn and retention reporting (vs. cancellation)
- Changes ARR/MRR timing
- Reduces dispute rates when implemented clearly
- Preserves LTV by keeping customer relationships open
Real SaaS Takeaway
Pauses aren’t churn—they’re a retention lever. But only if finance can track them cleanly. With Ordway, subscription pauses are system triggered and audit proof, so you don’t need to fake a cancellation to get billing right.
FAQ Section (Quick Answers to Real Questions)
What happens when a SaaS subscription is paused?
Billing stops temporarily, access may be restricted, and the subscription resumes later without a new signup.
Is a pause the same as a cancellation?
No. Pauses retain the contract and customer relationship. Cancellations terminate it entirely.
How does a pause affect revenue recognition?
Revenue is deferred or adjusted based on the period of service suspension, per ASC 606 rules.
Want to Go Deeper?
Let Ordway show you how to implement automated pause workflows—from billing holds to revenue adjustments. Request a demo
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