Spend Control

How to Reduce SaaS Creep (Using ClearSpend)

Subscription or SaaS creep can be bad for business. Learn how to assess your subscriptions and take back control of your cash flow.

As a small-to-medium-sized business, it's easy to fall prey to the idea that you need dozens of different SaaS (service as a software) products to run your business. 

They do a fantastic job of seducing companies into believing your business will grow faster with their magical solution. You need social media schedulers, ad spend trackers, internal communication apps, and five product management tools. 

You get it. 

We're not saying some of these tools won't save you time and money overall or help your business grow. If your payroll department is still using pen and paper (or an abacus), then, yeah, maybe software is a good investment. 

But, there is such a thing as subscription creep. There's a good chance you've signed up for products you don't use but have lost track of. And as a SMB where margins are already tight, you need to manage these subscriptions before you've spent so much money you could have bought a new Tesla.

So let’s get you closer to that Tesla and let's find out what subscription creep is.

What is subscription creep?

You've most likely experienced subscription creep in your personal life. Remember that gym membership you bought but haven't used in six months? Or how about the dog toy subscription box you impulsively signed up for, and now your dog is so overwhelmed with toys he's thinking of getting his own apartment?

All of these subscription services you pay for but aren't using (or don't need) are what constitute subscription creep—and they add up fast! (You can hear the sound of the cash register singing, ka-ching $$$.)

For small businesses, these subscription fees are typically in the form of SaaS products. They're unused, overpowered for what you need, and could be downgraded. Typically, they have a cheaper alternative or a yearly payment plan that could save you hundreds of dollars. 

It's easy to let these subscriptions fly because you might need them one day, or you're simply too busy to go through them one by one and decide what stays and what goes. 

But, this is how you end up with out-of-control business spending and an unhappy accountant. Or worse, no cash flow.

How subscription creep affects small-to-medium-sized businesses

When you find out 82% of small businesses that fail do so because of poor cash flow management, it's good motivation to pay close attention to yours. 

All businesses go through ebbs and flows. Last year you may have operated with a larger team who all needed their own subscription to a software. But this year, you need to downsize a little and are still paying for those unused team members. Or, thanks to employee turnover, the new staff have signed up for accounts, while the old ones still haven't been removed. 

While the $15/month fee might feel like no big deal, compounded over one year, three years, five years, and you've wasted some decent coin. According to a 2020 report, small businesses spend $220,000 on average on SaaS products each year.

Home Alone's Kevin McAllister Screaming Face
(Even Kevin McAllister is shaking his tiny head at you from his cush Chicagoland home, sans the Wet Bandits, of course.)

How to identify subscription creep

The first thing you can do to help fight subscription creep in your business is an audit of all current products you use. Make sure you go back a whole year to avoid missing those annual subscription fees you automatically signed up for. 

How many cloud storage fees are you paying? Do you actually use them all? 

What about your marketing and creative team? Yes, they need tools to create gorgeous graphics. But do they need Adobe Photoshop and InDesign? Or is the pro version of Canva all they need? 

And then look even further—if you're using the pro or enterprise version of Canva, do you still need that other SaaS for social scheduling? 

Doing a deep dive into your current use of SaaS products (and those collecting digital dust) will most likely uncover a lot of wasted cash flow. But once you get your subscription creep under wraps, how do you stop it from happening again?

How ClearSpend can help your business fight subscription creep

ClearSpend’s flexibility makes it an ideal tool to help solve subscription creep. You can use ClearSpend Go Cards for everything, from paying for fuel and travel to paying contractor costs—and even setting budgets for subscription fees (ahem). 

These tools in the ClearSpend dashboard can help you end SaaS creep for good:

Budget allocations and sub-allocations

With a ClearSpend, you can create and fund budget allocations, and even sub-allocations (budgets within budgets, kinda like Inception). 

Say your marketing department has a $75,000 monthly budget, but you’ve crunched the numbers and you don’t want to spend more than $20,000/month on SaaS fees. With ClearSpend, you can set a $20,000 sub-allocation specifically for marketing SaaS fees that’s segmented out from the rest of the spend. Then, you can track how spend on that sub-allocation increases over time, allowing accounting to easily find increases in SaaS spend. 

You get to decide exactly how much money goes into each sub-allocation, and will never spend more unless you change the budget. Do this for all departments, and you’re back in control of all those pesky subscription fees. 

Expense categories

In addition to creating a specific budget allocation for SaaS products, you can also create a unique expense category for them. Then, whenever someone signs up for a SaaS subscription on a ClearSpend card, it’s automatically categorized as ‘SaaS subscription fee’ or whatever you want to call it.

You can then look at the spend data for that specific category to watch for creeping SaaS fee increases (aka SaaS creep) over time. When you find that it’s going beyond your budget, it’s time to remind your team members to delete accounts on SaaS products they don’t use. 

End subscription creep with ClearSpend

Set hyper-specific budget allocations and keep cash flow under wraps. Put a limit on how much your business can spend on software each month and never go over budget again.

Whether that budget is set for the entire company or specific for each department, you'll feel in control of how much you spend. 

More like this