How to manage your businesses software subscriptions
Subscriptions are more important than ever
2014 was the year that spending on software subscriptions first started to become noticeable. Fast forward to today and the average 1-50 person business will use up to 40 subscriptions. Each team has their own unique processes that are enabled by the subscription that they use. Sales teams use Salesforce, Marketing teams use Marketo, Finance teams use Xero, and Software Development teams use Jira.
The adoption of subscriptions has only become more prevalent as COVID-19 has set in. Satya Nadella, the CEO of Microsoft, said that they’ve seen “two years’ worth of digital transformation in two months” since COVID-19 and that subscriptions have become an important part of helping the world shift towards remote work.
We’ve observed the same trends at DiviPay. Since late April, weekly spending on subscription software has increased by 130%:
And it should come as no surprise that subscription payments to Zoom’s video conferencing software have grown by over 1000% in the last 12 months:
How to manage and control your software subscriptions
So how do you best manage your growing list of subscriptions? We’ve seen 3 practices work well:
- Maintain a subscription register
- Regularly review subscription ROI
- Split subscription spend across multiple cards
Maintain a subscription register
Managing and regularly viewing a register of all your active subscriptions helps you lower your business costs and save your business thousands of dollars of unnecessary spending. An up-to-date register will help you stay on-top of upcoming subscription spend. It will also reveal any duplicate subscriptions and stop subscriptions from slipping through the cracks if the previous owner changes roles or leaves the business.
To create your own subscription register:
- List all of the subscriptions your business uses
- Check your credit card statement and check for any missed subscriptions
- If you missed a subscription, there’s a good chance it’s not critical to your business
- Cancel unnecessary subscriptions to save extra money
Add your remaining subscriptions to spreadsheet and fill in the following:
- The name of the subscription
- Who the owner of the subscription is
- How much the subscription costs
- How frequently you are billed for the subscription (weekly, monthly, yearly, or by usage)
- Update the register for all new subscriptions
Regularly review subscription ROI
Once your subscription register is set up, it’s a great opportunity to evaluate the cost and benefit of each subscription. How much does the subscription cost? Is the team getting the uplift that we expected? Are there any better alternatives available? Answering these questions on a regular basis ensures that every subscription returns a positive ROI.
If a subscriptions ROI is in question then the price can often be re-negotiated or if required cancelled all together. You might also find that the tool meets the businesses requirements but the users need up-skilling. If this is the case, encourage self-education or book in training with the supplier if it’s available.
Split subscription spend across multiple cards
Using a single card to pay for every subscription increases your exposure to online fraud. Whilst you’re likely to get any frauded money refunded you’re going to have to spend hours speaking to customer service. You’re also going to have to login to each subscription and replace your old card details (this also needs to happen when a card expires).
A unique card per subscription or at least grouping multiple subscriptions onto unique cards becomes particularly important when critical business infrastructure is billed off your cards. We’ve heard one too many horror stories of customer-facing features suddenly switching off due to unexpected card cancellations.
How DiviPay can help you manage subscriptions
DiviPay is an award-winning subscription management platform built for Australian SMEs. With DiviPay you can create a new virtual card for each subscription and cancel or pause cards with the click of a button. Any inefficient subscription spending is surfaced in real-time through a clear subscription register and a set of easy-to-read charts and metrics.