8 Tips for Better SaaS Spend Management

8 Tips for Better SaaS Spend Management

Tech firms take product offerings to market quickly. Any size entrepreneur needs a balanced approach to meeting business objectives. Cost management was a simple thing when things got messy. This has become an essential priority and not simply an enticing afterthought over many years. The penny spent on SaaS Platforms can be used to generate future returns for the company. Using Excel spreadsheets is malpractice as they can quickly lose track. 

What is SaaS spend management? 

Increasingly, software that offers a variety of subscriptions causes overuse, which causes companies to spend more and reap fewer benefits. SaaS spend management is here for you! Using the control of subscription revenue, you can optimize SaaS costs and increase efficiency. The solution is to find SaaS applications serving the best business purposes, choose the right license for the best value, and keep your subscription renewed regularly. 

Why do companies need SaaS optimization? 

Uncontrolled expenditure on every part of your enterprise could negatively affect your financial position. SaaS optimization can help companies maximize business capital. For a more sustainable solution, eliminate duplicate or similar applications from SaaS applications. It’s a good idea to look at underutilized SaaS products but still, steal revenue from businesses to make a good investment. The apps are not valuable to you and are usually subscribed by employees who can be re-used for a while before moving on to another app or not immediately notified by the IT departments. 

Cloud-based deployment has become the preferred method of software deployment. Overall, the SaaS market has increased rapidly and has been accumulating double-digit growth over the last several years. In 2022, Gartner forecasted cloud spending would exceed $408 million by 2023. The unprecedented rapid growth of a new software category leaves leaders unprepared to cope with the resulting cost increase, and these costs are often obscured by unmanaged employee acquisition of software applications. 

Value of SaaS cost management 

SaaS cost management allows the company to manage and control its subscription costs via spreadsheets or by leveraging SaaS applications if needed. The objective of SaaS Cost Management is understanding the RoI for the SaaS billed service and ensuring maximum value for your investment. You can therefore buy highly-priced SaaS products at excellent price to justify the costs. You can see examples of cost management reports of SaaS companies with fewer than 100 workers. 

The software buying process might be decentralized, leading to an overlap of licenses 

A SaaS buying choice can be limited depending on your company structure. End users at different divisions choose SaaS providers and negotiate deals. It’s pretty standard for professional workers as they often work from home. Typically these end-users are not full-time SaaS customers hence a lack of familiarity with contracting SaaS and expense control. Suppliers provide several pricing options for SaaS products that require regular inspection for problems like expired licenses and overages in the software industry. In reality, the requirement is unrealistic, and the end users will need a certain amount of resources. 

SaaS costs are variable 

SaaS firms often offer various pricing plans based on an extensive clientele range. The pricing model usually determines the level of accessibility/customization a user requires. SaaS companies usually develop/modify the software or provide as-needed integrations and customizations for your requirements. You can have a different charge but only pay for what you want. The first touchpoint is incorporating marketing best practices to reduce costs, and the second is understanding how your SaaS stack fits within your objectives. 

Unused SaaS licenses

Ensure that licenses and active accounts are verified by SaaS cost management. Suppose a company pays 100 users, but there are only 60 active users. If you do that, the license costs you more. Occasionally, you will see more subscribers than were expected. If you have such an option, you can move on to the next pricing level, depending on the service provider’s terms. It can also lead to excessive spending if you do not know your budget. 

How can I reduce the cost of SaaS? 

8 Tips for Better SaaS Spend Management

SaaS makes the business more responsive to corporate needs and cultures. Keeping track of costs associated with changes is important for determining and avoiding unnecessary spending. Every company has the right to take steps to reduce the cost of SaaS regardless of the type or industry of the SaaS products used. 

1) Negotiate with the provider 

Setting up a context and goal for negotiating costs with vendors can provide an easier, more collaborative, and more accommodating process. Ensure that the leaders in your business are aware of the proposed cost-cutting measures. In its formal position, the company states a cost reduction plan is in progress across the supply inventory, and the company is reviewing vendors. The fact that agreement restructuring is mandated by executives also provides greater validity to these requests. 

2) Keep track of renewals and cancellations 

Keep track of the expiry period. The termination clauses are essential to collaboration between SaaS contracts management and SaaS spending management. Take the example of skip

renewals for SaaS services yearly instead. Unfortunately, you also miss opportunities to minimize waste negotiation and revise agreements to meet current demands. This applies to the cancellation policy. Again, you can pay an extra year if your subscriptions don’t expire before your renewal date. PayPro Global recommends creating a renewal calendar to ensure you correctly keep tabs on the details of your agreements and avoid unwanted renewal costs. 

3) Inventory your SaaS tools — and identify stakeholders 

Identify current stock to reduce costs for Sass applications and resource usage. All transactions generated by the Cost category should also be considered, including a personal company card, supplier card, and employee expenses. In Accounts payables and purchases orders, Direct Spending can additionally be found for suppliers. This characteristic must be identified for every previously unrecognized application to help reduce SaaS costs for a business. 

4) Align licensing with expected usage 

SaaS Pricing models vary dramatically depending on the provider. Typically providers have tiered licensing depending upon the number of features used. The user may request access to certain functions in the app. However, most of them can easily be managed with only one feature. Before signing a contractual agreement, you should carefully assess your user requirements. You will not have to spend money on features you don’t use. 

5) Control costs by minimizing the number of SaaS solutions with overlapping functionality 

Convince functional groups to adopt unified software to perform the same job or reduce the number of alternative options with overlap performance helps control costs and minimize risks. 

6) Map Spend and Metadata to Every Application 

In each application, the details regarding cost need to be included in managing costs and spending. Generally, this is found in the application’s original document and the purchase order invoice documentation. Keeping such data helps the organization identify and document all SaaS-related application use. How can they help reduce costs? A software management application such as Zylo automates most of this discovery, categorization, and database-building process, ultimately reducing spending. 

7) Identify a Baseline for the Current SaaS Inventory 

Identifying a current inventory is an excellent start to gaining cost savings with SaaS tools. It’s impossible to control something you don’t know. The ideal discovery process involves thoroughly investigating financial transactional documents for cost and management. This analysis includes direct supplier expenditure found in accounts payable and order entries.

8) Discover and categorize all SaaS applications 

Identification of SaaS applications that are found within a company should give an accurate snapshot of software costs. Zylo recommends reviewing 12-month transactions to understand current expenditures and potential obligations generated by renewal. The absence of information from the accounts payable or expense system is crucial because incomplete information is crucial. 


SaaS spend management is a critical but often overlooked part of running a successful business. By following these eight tips, you can take control of your SaaS spending and ensure that your hard-earned money is being put to good use.


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