SaaS spend management explained: benefits, key features, and software to choose

In today's digital landscape, businesses of all sizes rely heavily on Software as a Service (SaaS) applications. From CRM and project management tools to communication platforms and design software, SaaS solutions power core operations. However, this reliance can lead to a sprawl of software subscriptions, often resulting in uncontrolled SaaS spend, unused licenses, and budget overruns. This is where SaaS spend management comes in.

What is SaaS spend management?

SaaS spend management is the process of tracking, optimising, and controlling all SaaS spending within an organisation. It involves gaining real-time visibility into your SaaS spending, identifying cost-saving opportunities, and implementing management strategies to ensure efficient use of software subscriptions. A robust SaaS spend management platform acts as a centralised management tool, providing actionable insights into your SaaS spending, helping you make informed decisions about software purchases, and ultimately aligning your SaaS spending with your business objectives. Effective SaaS spend management is an ongoing process, not a one-time activity, and requires a proactive approach to achieve cost efficiency and optimise your software stack. It's about understanding where your money is going, eliminating unnecessary costs, and maximising the value you get from your software investments.

8 benefits of using a SaaS spend management platform

Implementing a SaaS Spend Management Platform offers a multitude of benefits, significantly impacting a company's bottom line and operational efficiency. Here are some key advantages:

1. Cost savings

One of the most significant benefits is identifying and eliminating unnecessary spending. A SaaS Spend Management Platform helps uncover unused software licenses, redundant applications, and underutilised subscriptions, allowing you to reclaim those funds and reduce your overall software spend. This can lead to significant cost-cutting opportunities.

2. Centralised visibility

A management platform provides a single platform for managing all your software subscriptions. This centralised visibility eliminates the lack of visibility often associated with decentralised procurement, offering a 360-degree view of your entire SaaS stack.

3. Improved budgeting and forecasting

With real-time insights into your SaaS spending, you can create more accurate budget allocations and improve budget forecasting. This allows for better financial planning and helps prevent budget overruns.

4. Enhanced renewal management

The platform provides alerts for upcoming renewals, giving you valuable time to assess whether the subscription is still needed and negotiate favourable terms or cancellation terms. This proactive approach prevents automatic renewals of underutilised or unwanted subscriptions.

5. Reduced compliance risk

By tracking software licences and usage, you can ensure compliance with software licensing agreements, minimising the risk of compliance issues and potential penalties.

6. Data-driven insights

A SaaS Spend Management platform provides valuable insights into app usage, active users, and other key metrics. These data-driven insights empower you to make informed decisions about your SaaS spending, optimising your software stack and maximising ROI.

7. Improved operational efficiency

By automating tasks like renewal management and licence management, you can free up valuable time for your procurement team and other employees, improving overall operational efficiency.

8. Strategic decision making

With a clear understanding of your SaaS spending and usage patterns, you can make more strategic decisions about your software investments, aligning your tech stack with your business goals and strategic initiatives.

Key features to look for in the best SaaS spend management software

When choosing the Best SaaS Spend Management Software, consider the following key features:

• Usage monitoring: Track actual usage patterns of your SaaS applications to identify underused licences and optimise subscription costs.
• Renewal management: Automated alerts for upcoming renewals, along with tools to manage the renewal process, are crucial for preventing unwanted renewals.
• Cost optimisation: The platform should provide insights into potential cost-saving opportunities, such as identifying redundant subscriptions or underutilised licences.
• Integration capabilities: Seamless integration with your existing accounting systems, financial systems such as Xero, Quickbooks, and MYOB.
• Reporting and analytics: Robust reporting and analytics features provide deep insights into your SaaS spending, usage patterns, and other key metrics. Custom report and detailed reports are valuable.
• Access management: Control and manage application access to ensure security and compliance.
• Contract management: Centralise contract management to keep track of contract terms, renewal dates, and other important information.
• User management: Manage user access to SaaS applications, including onboarding and offboarding users.
• Intuitive interface: An intuitive interface makes the platform easy to use for the entire organisation, from the procurement team to individual employees. A browser extension can also be helpful.
• Security and compliance: Ensure the platform meets your security and compliance requirements.

How Subscription Management Systems Work

Effective subscription management systems offer a streamlined approach to controlling software expenses. They typically operate by providing a dedicated payment method for each subscription, allowing for granular control over spending and ownership. Here's a typical workflow:

1. Payment method allocation: For each SaaS subscription, a unique payment method is created. This could be a virtual card, a dedicated physical card, or another designated payment instrument. This allows for isolation of charges and simplifies tracking.
2. Subscription payment: The designated payment method is used exclusively for the specific SaaS subscription. This ensures that charges are easily identifiable and attributable to the correct software.
3. Ownership and responsibility: Each subscription is assigned to a responsible individual or team. This clarifies accountability for the software and its associated costs.
4. Budget control: Spending limits or budgets can be associated with each payment method, preventing overspending on individual subscriptions. This helps enforce budgetary discipline and avoid unexpected costs.
5. Spend control: The ability to quickly freeze or deactivate a payment method provides a way to immediately stop charges to a specific subscription. This is crucial for cancellations, preventing unwanted renewals, or addressing security concerns.
6. Reporting and tracking: Subscription management systems offer reporting and tracking tools that provide a consolidated view of all subscriptions, including costs, renewal dates, and responsible parties. This centralized dashboard simplifies oversight and provides valuable insights into SaaS spending.
7. Integration (optional): Some systems integrate directly with accounting software or other financial platforms to automate data transfer and simplify reconciliation. However, direct integration with the SaaS applications themselves is not always required for effective subscription management. Control can be achieved simply by managing the payment methods associated with each subscription.

Why your business needs a SaaS spend management tool

Many businesses enthusiastically embrace SaaS solutions, but often overlook the growing complexity of managing them. This "SaaS sprawl" can lead to a host of challenges, impacting your bottom line and operational efficiency. Without a dedicated SaaS Spend Management Tool, your business might be facing these problems:

Runaway costs

Uncontrolled SaaS spending is a common problem. Without clear visibility, it's easy for subscription costs to spiral out of control. Underutilised licences, forgotten subscriptions, and redundant tools all contribute to unnecessary expenses, draining your budget. This often happens because different teams are making software purchases independently (decentralised procurement), leading to a lack of oversight.

Hidden costs

Beyond the obvious subscription fees, there are often hidden costs associated with SaaS. These can include implementation fees, training costs, and the cost of integrating different SaaS applications. Without a comprehensive view of your SaaS landscape, these hidden costs can be difficult to track and manage, leading to budget surprises.

Lack of visibility

A lack of centralised visibility into your SaaS subscriptions makes it difficult to understand where your money is going. This lack of transparency makes it hard to make informed decisions about software purchases and can lead to redundant subscriptions and wasted resources. You might have no idea how many licences you have for a particular application, how many are actively used, or when your renewals are coming up.

Administrative overhead

Managing multiple SaaS subscriptions can be a significant administrative burden. Tracking renewal dates, managing user access, and processing invoices can consume valuable time and resources. This can distract your team from more strategic initiatives and reduce overall productivity.

Compliance risks

Without proper tracking and management, it's easy to fall out of compliance with software licensing agreements. This can lead to costly penalties and legal issues. Ensuring that you have the right number of licences and that your users are accessing software appropriately is crucial for mitigating compliance risk.

Security vulnerabilities

Uncontrolled SaaS sprawl can also create security vulnerabilities. If you don't have a clear picture of all the SaaS applications being used within your organisation, it's difficult to ensure that they meet your security standards. This can increase the risk of data breaches and other security incidents.

These challenges highlight the critical need for a robust SaaS Spend Management Tool. By addressing these pain points, a good tool can help you regain control of your SaaS spending, optimise your software stack, and improve your overall business performance.

Choosing the right SaaS spend management platform

Choosing the right SaaS Spend Management Platform is crucial for maximising its benefits. Consider the following factors:

• Business needs: Identify your specific needs and requirements. What are your biggest pain points? What features are most important to you?
• Integration capabilities: Ensure the platform integrates seamlessly with your existing business systems.
• Scalability: Choose a platform that can scale with your business growth.
• Ease of use: The platform should be intuitive and easy to use for your entire team.
• Vendor reputation: Choose a reputable vendor with a proven track record.
• Pricing: Evaluate the pricing structure and ensure it aligns with your budget.

Why Weel is the best SaaS spend management solution

Managing SaaS subscriptions is often a chaotic mess. A single card shared across a department makes it nearly impossible to track who's responsible for what software, where your money is actually going, and when renewals are due. This lack of clarity creates a breeding ground for overspending, forgotten subscriptions, and administrative nightmares. Weel simplifies this chaos with our intuitive subscription management tool, giving you control and visibility you never thought possible.

Issue new cards for a software subscription in a few simple clicks

No more lengthy processes with your bank. Simply select the software name (or add a new one if it's not already listed), assign a card owner (which can be instantly updated anytime, eliminating the need for new cards when employee roles change), set the charge frequency (monthly, quarterly, annually – you're in control), and input the cost.

Complete control at your fingertips

Need to prevent a chargeback? Freeze the card instantly. Subscription details changed? Edit them on the fly. Subscription no longer needed? Delete the subscription card with ease. Weel gives you granular control over each and every software subscription. This level of flexibility saves you valuable time and prevents unexpected charges.

Real-time visibility of all your subscriptions

See all your software subscriptions in one place, with clear details of costs, renewal dates, and card owners. No more scrambling to find information or worrying about missing renewal deadlines. Weel gives you a clear overview of your entire SaaS landscape.

Competitive FX rates

Many SaaS subscriptions are priced in US dollars, and if you're using a standard credit card for these purchases, you could be paying hefty FX fees – sometimes as high as 3% – on top of your subscription costs. These seemingly small percentages can add up to a substantial amount over time, particularly for services like Google Ads or other high-spend SaaS tools.

With Weel, you get access to an incredibly competitive FX rate of just 0.9% through our partnership with Visa. This can translate into significant savings on your international SaaS subscriptions.

Beyond subscription management

Weel offers a comprehensive suite of spend management features. Gain real-time visibility into all business spending, automate expense tracking and categorisation, and leverage powerful budgeting, forecasting, and reporting tools. Streamline approvals, integrate with accounting software, and control company cards—all within a single platform. Weel empowers your entire organisation to spend smarter, optimising expenses and driving business growth.

Curious to see how Weel can fit within your business? Take our product tour or book a demo with our team today!

Frequently Asked Questions (FAQs)

What is SaaS spend management?

SaaS spend management is the process of tracking, optimising, and controlling all SaaS spending within an organisation.

How does SaaS spend management software work?

SaaS spend management software connects to your business systems to discover and track your SaaS spending, analyse the data, and provide insights into cost-saving opportunities.

Why is SaaS spend management important for businesses?

SaaS spend management is important for businesses because it helps them control costs, improve operational efficiency, and ensure compliance with software licensing agreements.

What are the benefits of SaaS spend management tools?

The benefits of SaaS spend management tools include cost savings, centralised visibility, improved budgeting, streamlined procurement processes, and enhanced renewal management.