Spend Management

How to Manage Your SaaS Spend in 3 Easy Steps

May 19, 2020

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Manage Software Costs

Ensure your business isn’t wasting spend on unused tools and licenses.

Adobe. Slack. Dropbox. Hubspot. What do all of these companies have in common?

They belong to a business model known as SaaS. 

Unlike products where you own something tangible or download software to your computer, SaaS products are subscription based programs you pay to use. The appeal of SaaS is that you don’t have to mess with hardware, updates, or tech bugs – the SaaS provider does that for you. But it’s not all sunshine and roses. 

Many are claiming we’re in the beginning of a SaaS-pocalypse. According to research, the average company uses 123 different SaaS tools. As the number of SaaS products we use daily continues to rise, so does the need for an easy and effective way to manage it.

SaaS management goes beyond contracts and licensing agreements. At the end of the day, money makes the world go round. How can your business spend less on SaaS without sacrificing the necessary tools you need to get the job done? Enter SaaS spend management. 

How to manage your SaaS spend

There’s a big difference between saying you want to save money and actually doing it. The key is finding actionable steps you can take to get the ball rolling. These three tips will allow you and your team to dive into common SaaS spend mistakes and fix them. 

1. Eliminate duplicate and obsolete programs

Did you know that more than $40 billion is spent on unused SaaS tools each year? 

It’s true. Companies are throwing away billions of dollars in budget on outdated, underused, and duplicate SaaS programs. That’s why your primary concern for curbing SaaS spend is taking inventory of everything your company is currently using before moving forward.

$40 billion

on average, is wasted by businesses on unused SaaS tools every year.

Source: G2 Track

Chances are your company is using multiple programs that do the same work or you might even be paying for software that nobody uses at all. Sit down with the key stakeholders in each department and find out the current state of your SaaS.

Create a list that answers the following questions:

  • Which products are you paying for?
  • What function do they provide?
  • Is this program obsolete or out of date?
  • How much do they cost?
  • How many people use them?
  • Is it duplicate to another program you pay for?
  • When does the contract expire?

Once you answer these questions you can begin to determine which products you absolutely need and which can be eliminated. In some cases you might consolidate SaaS services. This strategy will eliminate the bulk of your SaaS waste right away.

2. Understand your SaaS contract

One of the biggest mistakes people make with SaaS spend is with their license management. 

Many businesses are so preoccupied with getting the best deal they can on the price that they ignore other parts of their contract. Things like termination fees, auto-renewals, and SLA can cost you money if you’re not paying close enough attention. What looks like a good deal upfront can quickly spiral out of control. Let’s go over some of the key features of SaaS contracts that you should pay attention to before signing on the dotted line.

Effective date

The effective date of your contract is when your contract actually kicks in. For some businesses, your effective date is the same day you sign your contract. But for others, you might have to wait until the first of the month or the start of the quarter.

Don’t assume your effective date is the same day you sign your contract. Check with your SaaS provider before making any decisions. Carelessness with your contract management at this stage could leave you without a service for days or even weeks. Never cancel an old SaaS service without making sure you’re covered by your new effective date first.

Contract term

A contract term is simply the length of time the contract you signed is in effect. If you’re hoping to make changes to your current contract, most companies will make you wait until your contract term has expired. Always review the details around your contract term before signing any paperwork. It’s also important to know when your contract is ending before making big decisions. 

Contract termination window

Are you up a creek without a paddle once you’ve signed a contract? Not necessarily. Some contracts with have a built in termination window that allows you a grace period to cancel your contract without any penalties. Not all contracts have this built-in. You’ll need to check with your SaaS provider to see if there’s a termination window within your agreement. 


The service level agreement (SLA) is one of the most important parts of your contract. It sets the standard for the service you’ll be receiving for the duration of your partnership. Your SLA outlines your expectations from the vendor, metrics by which service is measured, expected timelines, and penalties should either party fail to deliver. 

This is the ultimate CYA section of your contract. Without a well-structured SLA portion of your contract, a vendor could legally keep you on the hook for a contract where they deliver nothing. It’s crucial to always double-check the SLA agreement before signing anything. 

Related: Dealing with a vendor violating your agreement? Learn how you can remedy a breach of contract.

3. Invest in a SaaS spend management tool

Once you’ve eliminated duplicate SaaS programs and fine tuned your contracts, it’s time to keep things moving in the right direction. The easiest way to start wasting money is losing track of what you’re spending.

That’s why investing in a SaaS spend management tool is a crucial final step.

With SaaS spend management, you can:

  • Centralize control over SaaS licenses
  • Facilitate SaaS contract management
  • Track spending and forecast the costs of SaaS subscriptions
  • Monitor SaaS product utilization and/or user sentiment
  • Implement employee offboarding

No more missing contract deadlines or falling short of compliance guidelines. With a SaaS system of record like G2 Track, you can start saving money by eliminating needless SaaS spend. Your team can securely sync accounting, financial, IT, and single sign-on systems in one setting. No matter the size of your company, a SaaS spend management tool can make your job and your life a lot easier! 

Spend less, save more with SaaS spend management

The key to eliminating SaaS waste is working ahead, staying on top of your contracts, and always looking toward the future.

Don't waste any time! Next, learn how to create an informed, comprehensive SaaS budget from scratch for your business.

Artboard 1 copy 18@2x
Manage Software Costs

Ensure your business isn’t wasting spend on unused tools and licenses.

Manage your software costs with G2 Track.