Are Subscriptions Eating Away at Your Budget?

Are Subscriptions Eating Away at Your Budget?

Subscriptions can be both convenient and budget busters. In our personal lives, subscriptions ranging from streaming services to magazines to “of-the-month” clubs can add up more than many realize. Similarly, subscriptions can eat away at corporate budgets.

Some of these subscriptions mirror personal ones, like an office subscription to media that no one uses. Yet businesses often also face much more comprehensive, expensive subscriptions.

For example, phone plans, both mobile and landline, might be billed on a recurring basis without much thought. Yet in many cases, businesses have the wrong amount of coverage. Some might have international data plans that could be downgraded at a time of limited travel. Others might have plans with limited mobile minutes, which could lead to expensive overage fees as remote employees use their mobile work phones at home. In that case, a subscription might need to be upgraded.

Because these plans might not be labeled as subscriptions the way signing up to receive, say, a newspaper might, they might get overlooked. And as the popularity of the software-as-a-service (SaaS) model has increased, many companies have to manage a growing number of subscriptions.

Yet finance and procurement teams might not have visibility into all these subscriptions, which can ultimately derail budgets. That’s why companies need a better way to manage subscriptions.

Struggling to Keep Track of Subscriptions

The first step toward controlling subscription spend is implementing a way to keep track of your purchases. Yet at many companies, the decision to procure subscriptions, particularly for SaaS, comes at a departmental level, based on the specific business use.

For example, a legal department may want to purchase a few subscriptions for e-signature software like DocuSign, while the sales department may subscribe to 10 licenses for Salesforce, and the engineering department may purchase multiple subscriptions to various computer-aided design (CAD) tools. In some cases, there’s even overlap, such as if administrative staff subscribe to project management software like Asana, while marketing teams purchase their own licenses for the same platform.

In other words, it can easily become difficult to keep track of the total number of licenses purchased as well as the usage of these licenses within a company. Furthermore, most subscriptions require you to provide a credit card that is used to auto-renew the licenses. The end result is that companies often end up paying for more subscriptions than they need, and the staggered renewal cycles make it even more difficult to optimize use of these licenses.

Getting a Handle on Subscriptions

An ad-hoc approach to subscription management clearly won’t do. Instead, companies need to centralize subscription management. That could mean that before any employee purchases a subscription, it must be approved and finalized by procurement or finance teams, depending on your internal controls.

But what about existing subscriptions? In that case, companies may need to conduct an internal audit to identify all of their subscription spend and analyze issues such as:

  • Are all licenses still needed?
  • Is there an opportunity to adjust subscription plans to obtain better pricing or service (e.g., upgrading cell phone plans to limit overage charges)?
  • Are there alternative subscriptions that would be a better fit price and quality-wise?
  • When are renewal dates and how will that affect budget plans?

Leveraging Technology for Subscription Management

At a minimum, companies should review their subscriptions with every renewal and at least annually to see if they’re realizing the value for their subscription spend. Still, handling this all manually can be difficult. So companies can use technology such as a subscription management system that’s part of a broader procurement system, which centralizes and automates more of the overall subscription management function.

For example, a subscription management system can allow you to keep track of all subscriptions by application and/or vendor. You can then see a snapshot of all active subscriptions, renewal/expiry dates and the person responsible for acquiring these licenses. Even better, if this type of system can also track usage, then the subscription spend can be further optimized based on what services your company needs.

GoProcure offers a subscription management service that can help you:

  • Centralize purchasing
  • Analyze subscription inventory reports
  • Integrate with systems your company may have to track usage of subscriptions

Using this service can help your company understand your subscription spend and find ways to reduce costs productively.

Want to learn more about how you can protect your budget with GoProcure? Request a free consultation with our team of experts today.