10 Ways to Optimize SaaS Spend for Your Business

SaaS (Software as a Service) is an essential expense for most modern businesses. It allows employees to access software from anywhere through the cloud. Some common examples are Google Drive, Dropbox, and HubSpot. Your company’s SaaS spend consists of all the fees involved with these services—whether you purchase a subscription to use the app, or pay a monthly fee to get more data or features for a free service.

SaaS subscriptions are incredibly convenient tools that allow employees to access company projects and data no matter where they are. They’re often more cost-effective than traditional software, and they eliminate the hassle of manual installation, configuration, and updates. However, it’s easy for SaaS spend to add up—especially when recurring subscription fees are charged automatically.

It’s crucial to keep track of how much you’re spending on SaaS. This will allow you to avoid unexpected losses and unpleasant surprises at the end of a payment cycle. It can also help optimize your overall spending to make your operations as cost-effective as possible. Here are 10 steps to get your SaaS spending in order.

1. Make an Inventory List of Apps

The first step toward effectively managing SaaS spend is determining which apps your company has paid subscriptions for. Once you’ve completed an inventory, you can see how much is being spent on each app per employee and team. You might be able to consolidate accounts so that you don’t have to pay for as many users. This is also a vital foundation for all the steps below; if you don’t know which subscriptions you have, you can’t optimize your SaaS spend.

2. See Which Apps You Actually Use 

There’s a pretty high chance that not all of the subscriptions you currently have are being used. And even if they are, there are probably some that aren’t useful enough to justify the subscription fee. One way to determine this is by establishing a review system. Ask your employees to provide feedback on each app: How often do they use it? Is it making a significant contribution to their work? Do they need it temporarily or indefinitely?

These questions will help you gain insight into the true value of each SaaS subscription. Once you decide that a certain app is worth keeping, you’ll also have a better idea of how many user accounts are really necessary.

3. Set Budgets for Teams

It’s a good idea to allocate budgets and create specific spend policies for each of your teams. This includes any SaaS-related expenses; not all teams need the same amount of money for subscriptions. One great way to control SaaS spend throughout your company is by delegating subscription management to team leaders and managers.

Setting specific budgets also helps to ensure company funds are managed effectively in general. You might create a policy that requires any purchases over a certain limit to be approved by management. This way, each new subscription can be evaluated on a case-by-case basis, and budgets can be adjusted if necessary.

4. Take Advantage of Long-Term Discounts

Since SaaS apps are subscription-based, they sometimes offer discounts if you purchase a license for a longer amount of time. Taking advantage of these offers is a great way to save money on SaaS subscriptions that you’ll need for the foreseeable future, or even for a specific time period (like one year). You can also keep an eye out for any special offers or rewards offered by your spend management provider—you never know where cost-savings opportunities might be found.

5. Leverage Volume Discounts

Volume discounts—also known as quantity discounts—can offer lower prices when you purchase in bulk. Some SaaS companies offer volume discounts if you need a large number of user accounts. This is particularly beneficial for SaaS providers, since allowing more people to use the software doesn’t cost much more on their end . But it’s also a great way for you to optimize SaaS spend. All you have to do is keep an eye out for deals that are relevant to your teams’ needs.

6. Cancel Unnecessary Subscriptions

One of the most common—and avoidable—ways that companies lose money is by maintaining unneeded subscriptions. Research has shown that the average company wastes a signficant chunk of its SaaS spend on tools that are redundant, no longer needed, or otherwise unnecessary. Some of these may be zombie subscriptions, or subscriptions that keep auto-renewing when they are no longer in use. It’s absolutely essential to identify and cancel SaaS subscriptions that aren’t providing value to your company.

7. Negotiate Pricing

You should regularly negotiate the price of your subscriptions, keeping in mind that you’ll usually be in a stronger position of power as an existing customer. You might not get exactly what you asked for, but it’s always worth a shot. Make sure to lock in good rates if you think you might need to renew subscriptions in the future.

It’s also important to check carefully for additional fees for implementation services, training, and support. You can’t always eliminate these fees, but you may be able to negotiate them down. When choosing a package or product tier, ask which support services are included. If you pay for a premium package, you might get a dedicated support rep or customer success manager. You should also ask about response time policies, especially for emergencies.

8. Utilize Free Trials

It’s always a good idea to test something out before you buy it, and SaaS is no different. Many SaaS tools offer free trials and/or money-back guarantees. Even if you’re absolutely sure that you want a certain tool, it can’t hurt to use the free trial period to confirm that it’s what you expected. If the tool doesn’t offer a free trial but has a money-back guarantee, you’ll still have to pay upfront, but you can get a refund if it doesn’t live up to your expectations.

9. Manage Multiple Subscriptions With Single Sign-On

Single sign-on (SSO) is a quick and secure way to log in to multiple services using a single username and password. It can also help you manage your SaaS subscriptions. If each employee has a single username for all apps, you or your designated SaaS subscription manager can use SSO to see who’s using which subscriptions, and whether they’re using them effectively and appropriately. For example, you’ll be able to see the device they accessed the app from and how long they used it for.

10. Review Your SaaS Spend Periodically 

Once you have a clear idea of your company’s SaaS spend, you’ll need to review it in detail at regular intervals. It’s not enough to do this just once; your teams’ needs will change, new subscriptions will be purchased, and others will become irrelevant. You have to stay informed and flexible to adjust your SaaS spend accordingly.

Here are some basic questions to ask in your ongoing review process:

• Where can costs be reduced? 
• Is the software actually benefiting the employees? 
• Is there a better or more cost-effective alternative?
• Are there any relevant discounts available?

The Bottom Line

SaaS apps are a central part of business operations, especially with an increasingly remote global workforce. They can be incredibly beneficial for your teams, but they can also incur unnecessary costs if you’re not careful. You have to manage SaaS spend just like you would any other type of expense.

This process is highly time-consuming if you do it manually every time you need to review spending. A SaaS spend management solution can automate the process and deliver detailed spending reports on a regular basis. This is the easiest and most reliable way to optimize your SaaS spend—not just for now, but for years to come.

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