8 Best Practices for SMBs to Manage Their SaaS Spend

8 Best Practices for SMBs to Manage Their SaaS Spend

Effective management of Saas expenditure is important for the SMBs who want to make a balance of their financial budgets and establish a balance and healthy cash flow. This is a common problem when it comes to SaaS solutions – despite the fact that their use is so widespread, these costs can snowball if they do not follow close watch. Here are some best practices to help SMBs manage their SaaS spend efficiently:

1. Perform SaaS Company Scan

To design a software-as-a-service (SaaS) integration strategy, begin by exploring all the SaaS applications presently utilized in your company.

  • How to Do It: Prepare a clear trove containing information on all SaaS subscriptions with information including but not limited to, cost, frequency of use, and which department the subscription belongs to.
  • Why It Matters: This inventory enables you to know what you’re subscribing to and perhaps recognize the incorporative or seldom-used services.

2. Consolidate and Standardize Applications

It can also happen that, in the organization, several departments might have bought applications with the same purpose.

  • How to Do It: The idea for implementing this recommendation is to determine where various SaaS tools have similar features and then reduce the utilization of those features across multiple applications while standardizing their use in a smaller set of appropriate tools.
  • Why It Matters: Consolidation eliminates duplicate roles and responsibilities, and assessing converts can be easier when processes are combined; it may also result in cost advantages arising from economies of scale.

3. Monitor Usage and Utilization

To measure the utility of each SaaS tool, write down how often you use them and determine whether they are worth the investment.

  • How to Do It: In this case, use SaaS management tools or applications that come with analytics to monitor user behavior or how you utilize certain features.
  • Why It Matters: This aids in the determination of licenses that are barely used or not used at all thus can be dismissed or attributed to other beneficial departments thus cutting on more costs.

4. Negotiate with Vendors

There is usually leeway to members of the vendor’s team if they’re a loyal customer or willing to enter into a long-term business relationship.

  • How to Do It: Discuss your usage statistics with the vendors and understand if you can get a lower price, better conditions for concern or discuss individual pricing plans with them.
  • Why It Matters: The exploration of ways of achieving good negotiation results shows that cost savings and better contract conditions can be achieved.

5. Implement Approval Processes

Make SaaS purchases pass through an approval formality to avoid the accumulation of random subscription services.

  • How to Do It: It is recommended to establish a centralized approval process for new subscriptions/reservations that entails an approval from the finance or the IT departments.
  • Why It Matters: This saves on unnecessary purchases to offices or end users, ensures that products meet organizational needs and requirements, and especially helps in the control of costs.

6. Optimize Subscription Plans

It is also important to constantly evaluate and adjust the subscription prices to conform to your practical use.

  • How to Do It: Check subscription rates that you have at this moment and correlate it with the rates of usage. These strategies require flexibility in plan either down grading or upgrading them based on the severity of the situation.
  • Why It Matters: Linking subscriptions to the real number of users enables organization to recognize they are not paying for the no-useful functions or quantities.

7. Automate Renewal Reminders

Record the subscription renewal dates to prevent auto-renewal of subscriptions that are not dramatic.

  • How to Do It: It is advisable that you are reminded before the subscriptions costs happen, you can use the calendar or use subscriptions SaaS management applications.
  • Why It Matters: This means you can review the use of the software and reevaluate their relevancy then look for better deals for the subscriptions needed or cancel the ones not so much used.

8. Encourage Cross-Department Collaboration

The executive level should observe how the different departments of the organization discuss the SaaS requirements and usage.

  • How to Do It: Organize occasional cross-sectoral meetings with representatives of other departments to focus on the topic of SaaS tools and exchange information on successful solutions.
  • Why It Matters: Certain tools can be used in conjunction with others; having various tools may allow for more effective usage or identification of similar tools and combined decision making for purchase.


Control of the SaaS expenditure is central to the efficient running of businesses and budgetary constraints within SMBs. To regain control over SaaS spending as well as improve organizations operational efficiency, SMBs should consider following actions: Audit SaaS usage on regular basis; Consolidate applications that have similar functions; Monitor their usage; Negotiate better terms with vendors; Introduce approval procedures; Optimize subscriptions; Automate renewals; Encourage collaboration; Ensure the SaaS usage security; Leverage SaaS management platforms. These best practices present a positive roadmap of SaaS expenditures and the overall strategic replenishment of the business firm.