6 ways to reduce your company’s SaaS spend

And save up to 30% on your software budget
illustration of a man searching for rocks with logo on them
TL;DR - Here are 6 identified options to save on SaaS licences:

1. Centralize SaaS spending information
2. Verify that the tools are effectively used
3. Avoid overlapping of features
4. Anticipate automatic renewals
5. Switch to an annual plan
6. Renegotiate your software subscriptions
Table of contents

This software budget that increases every year... And has become the second-largest cost item (after payroll) for French SMEs in the services sector (!)

The founders of LicenceOne started with this problem to create a software capable of automatically detecting all internal SaaS expenses.

However, having this information is not enough to reduce software subscription expenses.

So, what actions can you take to save on your SaaS budget?

1 - Centralize SaaS expense information

You can use a spreadsheet or a collaborative management tool. However, you will need to implement a systematic procedure to keep them updated.

You can save time by downloading the free templates that we have enriched with useful information.

--> SaaS Tracking Spreadsheet
--> Notion “SaaS Tracker” Template

The relevant information for each subscription includes:

  • The expenses and associated dates (to see their evolution)
  • The payment frequency (monthly, quarterly, annual…)
  • The team using the solution
  • The account administrator
  • The number of users
  • The offer renewal date
  • Their status (tracked, up-to-date, to be processed, etc.)

Even robust tracking doesn't necessarily cover these expenses exhaustively.

How to not forget any software subscriptions?

  1. Centralize purchases:

    Solutions for creating on-the-fly purchase cards can help solve this problem: one card per software, as payment is inevitable. A solution like Spendesk fulfills this mission.
  2. Analyze expenses:
    Via bank transactions or the purchase journal of the accounting software. This is what LicenceOne does in a completely automated way.

    The benefits include access to the history of SaaS expenses and keeping this information up-to-date.

    Try LicenceOne for free

2 - Check that the tools are actually used

Software vendors have established usage-based payment models. Most charge for the number of user licenses.

However, for good (or not-so-good) reasons, not all paid licenses are necessarily used. For instance, an intern whose access is forgotten to be deactivated at the end of the internship, someone who goes on parental leave, or even a simple oversight.

SaaS vendors won't automatically notify you when a paid account isn't being used. It's not in their financial interests...

How to optimize license management?

The same spreadsheet and an additional procedure:

If you've opted for the spreadsheet, you can adjust the procedure for filling it out. For example, you could require a manager to verify every month that the software used by their team is actually being used by everyone.

They could update the status of the corresponding app with the latest verification date. It's a bit tedious, but it works.

Track employee logs:

Large companies use various existing identity management technologies:

  • Password generation solutions (Lastpass, Dashlane, 1password….)
  • Single Sign-On (Okta, SailPoint, OneLogin…)
  • Email login (Google Sign in, Microsoft 365)

The main drawback to these solutions will be the extra cost to pay for each software used internally. Implementing a SSO solution is accessible in the "enterprise" plans of SaaS.

Check out the "wall of shame" for SaaS vendors about SSO --> https://sso.tax/

Instead of saving money, an SME may increase its budget to access this information. But thankfully there is…

Browser extension (from LicenceOne):

Available on Chromium (Chrome, Edge, Opera...) and even Firefox, the browser extension only detects login URLs. Often it's a subdomain for SaaS that starts with app.softwarename.com
The advantage of LicenceOne is that it synchronizes the login information with the SaaS expenses. If an employee hasn't logged in for 1 month, the administrator receives a notification (mail, slack).

Then, it's up to them to update the concerned license!

3 - Avoid overlapping functionalities

A striking statistic revealed by the technical co-founder of Hubspot himself: 90% of SaaS software customers use, on average, 10% of the offered functionalities.

Change management projects with training to best adopt new software is critical.

However, SaaS continues to evolve (which also serves to justify their price increases), and you need to be curious and determined to use a SaaS to its maximum capacities.

Another problem: new employees may also have their preferences and suggest (impose) new tools. This is commendable. The important thing is to remember to remove those that were used beforehand!

For example, some companies use several project management software like Asana, Trello, Notion, Miro, etc.

A subtler example: sending emails for the same company. The technical team will have good reasons to use the integration capabilities of Mailjet.

The marketing team will prefer to keep Mailchimp. The support team will want Crisp… Rationalizing also involves arbitrating.

So, how to detect duplicate functionality?

Always the same spreadsheet and an additional column:

You can add a description of the usage made of the software. And during budget reviews, make sure there are good reasons to use the SaaS covering these common functionalities.
Overlapping functionalities often relate to:

  • CRM and billing tools (Salesforce, Sellsy, Zoho)
  • Emailing and marketing automation (Mailjet, Sendinblue)
  • Marketing automation and CRM (Hubspot, Pipedrive)
  • Project management (Asana, Notion, Trello)
  • Design software (Adobe, Figma, Canva)
  • Social media platforms (AgoraPulse, Hootsuite, SproutSocial)
  • Support and chatbots…

Use an artificial intelligence tool (chatGPT):

You can ask ChatGPT using this prompt that will allow you to obtain an additional level of response:

"In my next message, I'll give you names of different software that are used in my company. Can you tell me if there are overlap of features for these different SaaS?"

ChatGPT screenshot of a question about SaaS Management

A unique feature to detect redundant functionalities:

LicenceOne has direct access to all the software used by your company. Its database accumulates more than 21,000 software and up-to-date information on the features they offer.

Screenshot of LicenceOne SaaS Management software

Based on a system of auto-generated and customizable tags, you are alerted as soon as similar tags are detected for several paid applications.

The main advantage: you don't have to do anything, the information comes to you.

4 - Anticipate automatic renewals

This is another well-identified specificity of subscription sales models. Contracts are automatically renewed.

The interest of software vendors is to retain their customers. They fight against unsubscribes, which represent an instantaneous decrease in their revenue.

Among the techniques used, you will recognize:

  • A more complex process to unsubscribe than to subscribe
  • Offers ahead of renewal conditioned on re-engagement
  • A promotion for a longer commitment period
  • Etc.

In this context, it's up to the customer (to you) to make the effort.

How to avoid the trap of automatic license renewal?

For the most significant subscription contracts, ensure the renewal conditions before committing. It is possible to cancel the subscription in advance just after contracting. A simple email may suffice and puts you in a better situation when it's time to renegotiate a year later.

For smaller contracts scattered among different company teams:

  • Accurately indicate the renewal date in your spreadsheet
  • Schedule reminders with a spreadsheet X email integration
  • Manually report dates in several calendars (at a minimum, yours and the administrator's)

5 - Switch to an Annual Subscription

Take caution!

This advice shouldn't be taken verbatim, as there's a risk of falling into the trap that we highlighted earlier.

In essence, the risk lies in committing to a 12-month plan, as what may be relevant today might not be tomorrow.

Ensure that:

  • The software is indeed being used.
  • The chosen plan accurately aligns with your actual usage.
  • There aren't any more fitting alternatives.

Once these criteria are fulfilled, consider transitioning your monthly subscriptions to an annual format.

All software providers typically offer a discount of at least 15% for annual subscriptions.

6 - Renegotiate your software subscriptions

The largest companies have a dedicated purchasing service. They are trained and apply a systematic routine. The volumes of negotiated transactions also justify the time spent discussing all license purchases.

Is it relevant for smaller businesses?

For SMEs, negotiating all subscriptions is not necessarily relevant. However, focusing on the few SaaS that represent the bulk of the budget can have a real impact and justify the dedicated time.

What arguments can an SME use against a software publisher?

Keep in mind that there is always an alternative. Don't hesitate to consider a competing solution. Beyond a request for a quote, the mere approach can trigger a commercial gesture from the existing publisher who feels threatened.

Studying the different offers from publishers is another lead. Ask the question internally about the usage of all the features, consumption volumes, the number of users (seen above).

You may simply subscribe to a less extensive offer, probably for excellent reasons.

Questions to consider when choosing
a SaaS Management Platform

What Features Should I Prioritize for My Company?
How to calculate the ROI of a SaaS Management platform formy company?
What Data Do SaaS Spend Management Solutions Access via Their Bank Account Integrations?
Should I Invest in a Comprehensive Procurement Management Solution or One Specialized for Software Subscription Expenses?