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Managing software as a service (SaaS) has become a vital responsibility for finance teams. In the past, finance had complete control over software spend, but with the rise of SaaS, it's no longer the case.
Purchasing new tools now is seamless for employees. They can quickly spin up a virtual card and make purchases in seconds. Finance and operations teams are on the back foot. Some controls and spending limits are generally in place, but it's far from perfect.
On top of this, bottom-up SaaS models that target individual users or small teams lead to SaaS costs snowballing out of control and finance is left helpless. According to Hudled data, SaaS has become the second-largest cost for a company outside of salaries. The average scale-up of 21-100 employees spends $472,361 on SaaS every year. SaaS visibility for finance becomes a key first step to ensure they can accurately forecast what the company will spend.
Visibility means much more than knowing what vendors a company has subscribed to. Each subscription cost has different features, add-ons, and subscription tiers. Before finance can even think of taking action, they need to understand what is being used and in what capacity.
For finance, the critical areas of SaaS management they should be aware of include:
So how can finance teams gain control of SaaS spend? The answer lies in nailing discovery because managing what you don't know is impossible.
Implementing a SaaS management tool like Hudled will automatically help you identify what tools your company is using, how much they're spending per year, whether you're on a monthly, annual, or multi-year plan, and what the billing cycle is. With this information, finance can accurately forecast costs going through the business and know when a new tool is purchased.
From here, you can start to assess what tools you should keep, reconsider and cancel. Many finance teams attempt to do this on a spreadsheet, and it quickly gets forgotten. It's no surprise why close to 30% of licenses provisioned within a company aren't used.
Effective finance processes will help you manage your SaaS spend while creating guardrails so people know what they can or can't do within a company. Below is a list of lightweight processes you can adopt that will enhance SaaS management in your company:
For growing companies looking to gain control of SaaS spend, adopting a SaaS management tool like Hudled becomes a no-brainer. A finance person can sign up within a few minutes and get complete visibility of their entire SaaS stack. If you want to get your company's SaaS spend under control, get started for free and request a SaaS audit to see where you’re overspending.