Subscriptions paid by invoice now move to past due
Manually-collected subscriptions now become past due when payment terms against invoices for subscription renewals elapse.
What's new?
We updated the Paddle platform so that manually-collected subscriptions now become past due when renewal invoices aren't paid within the payment terms.
There are no changes to endpoints or fields in the API as a result of this change — it's an update to the way the Paddle platform handles manually-collected transactions.
How it works
In Paddle, you can bill for subscriptions automatically using a saved payment method or manually by invoice:
Automatically-collected subscriptions
Paddle collects using a saved payment method. If no payment method is saved, customers must enter one using Paddle Checkout. Typically part of a self-service workflow.
Manually-collected subscriptions
Paddle collects by sending an invoice that the customer must pay by bank transfer or using Paddle Checkout. Typically part of a sales-assisted invoicing workflow.
When payment fails for a subscription renewal transaction for an automatically-collected subscription, Paddle sets subscription.status to past_due. Paddle Retain gets to work to automatically recover the payment for you. This process is called dunning.
Manually-collected transactions (invoices) become past due when payment isn't received by the time the payment terms elapse. Previously, when transactions for manually-collected subscription renewals became past due, the related subscription status in Paddle remained active.
With this update, when a subscription renewal for a manually-collected subscription becomes overdue, the subscription in Paddle becomes past_due. This makes the behavior between automatically and manually-collected subscriptions consistent. You can build your own workflows to keep on top of overdue manually-collected subscriptions.
Paddle Retain payment recovery is designed for automatically-collected subscriptions, automatically reducing delinquent churn from payment failures. As customers pay manually-collected subscriptions themselves, Paddle Retain doesn't take any action when they're past due.
Next steps
This change is available now.
Subscriptions paid by invoice are typically for bigger dollar business-to-business enterprise deals. If you've built a workflow to restrict access to your app for subscriptions that are past_due, you might like to exclude manually-collected subscriptions from this.