Recall a familiar situation. You sign up for a monthly gym membership. You pay the subscription fee upfront, get motivated, and show up consistently for the first week. Then, suddenly, you get caught up in work deadlines, travel plans, or a dip in motivation.

Pause Period Credits solves this experience gap with fairness built into every pause. Instead of forfeiting unused value, customers receive a credit note reflecting the prorated portion of the billing cycle they didn't use. When the subscription resumes, the credit is applied automatically as a discount or offset. This makes the pause feel fair, transparent and respectful.

Although the idea of pausing subscriptions and offering credits sounds simple, executing it is complex. Businesses need to accurately prorate the unused value, issue credit notes that reflect the exact service gap, and adjust the billing date without breaking the cycle. The complexity increases when pauses are backdated or extended across the renewal period, as even a small discrepancy can ripple into a larger accounting mismatch.

Zoho Billing efficiently simplifies pause-related credits. When a subscription is paused, the system automatically calculates the unused portion of the cycle. However, the credit note is not generated immediately. It will be created when the subscription is resumed.

1. Out-of-Term Resume: If the customer resumes the subscription after the current billing cycle, a new invoice is generated, and the credit note is automatically applied.
2. In-Term Resume: If the customer resumes within the same billing period, the credit note is created but applied only on the next invoice, provided "Redeem Credits" is enabled.

Note:  For businesses wanting to predict credit adjustment before the resume date, Zoho Billing shows exactly how much credit will be generated for a given pause period before resumption when you provide the resume date while pausing the subscription.

Imagine a monthly subscription,

A customer subscribes to a service priced at $300 for a period from June 1st to June 30th. On June 10th, they pause their subscription and resume it on June 15th, leaving five days unused.

For this subscription,

In this case, Zoho Billing will calculate $50 as credits. The credit note will be generated automatically when the subscription resumes. It will only be applied to the next invoice post-generation.

Customer A subscribes to a plan priced at $3500 for 365 days. After five months of active usage, the subscription is paused for two months (precisely 60 days).

For this subscription,

Upon subscription resumption, a credit note of $570 will be automatically generated and applied to the customer's account.

Consider a subscription from 1st June to 30th June, priced at $300. The customer paused the subscription on 15th June and resumed it on 5th July.

For this subscription,

When the subscription resumes, a credit note of $160 is generated automatically. Since this is an out-of-term resumption, a new invoice is created for the resumed period, and the credit note is immediately applied to that invoice.

Instead of treating pauses as lost value, they become a value-preserving retention tool for businesses. With this credit model, offering credits for the unused period builds trust with customers, and they feel covered. For businesses, it makes the billing transparent, and the revenue becomes more predictable.

In the next post, we will venture into the Advanced Refund Policy.