Subscription management - Challenges and best practices
No matter what the scale of its operations is, modern-day businesses are relying heavily on SaaS (or Software as a service) tools to improve operational efficiency and accuracy.
In the market today there is a variety of software available for almost every business process in practice.
From expense management to human resource management, there is software for everything and companies need to utilize these digital tools if they are to keep pace with industry trends.
However, paying for all the software a company uses, i.e. software subscription management, can be quite challenging and damaging for your finances if not handled properly.
Simply put, subscription management is the practice of paying for and handling all the software services and digital tools that your business subscribes to. Softwares as a service are usually not products that can be bought with a one-time payment.
These products are typically available only on a subscription basis, i.e. you will have to pay a certain amount every month to be able to avail the provider’s services.
They will likely offer varying packages with different price levels and features, depending on your choice you will have to pay subscription fees on a monthly, quarterly, or yearly basis.
The practice of shadow spending can be a major challenge in SaaS subscription management.
Shadow spending basically involves the unauthorized or unapproved use of SaaS applications that leads to the company incurring unexpected costs. Whether it is done intentionally or unintentionally, shadow spending can easily end up costing your business a lot of money.
Shadow spending may happen for a variety of reasons, employees may be using the software for personal use or they might be unaware of what features are authorized for company use and which ones are not, they may even accidentally subscribe to a package that is different from the one that was initially agreed upon.
Given the large number of software that a modern-day business works with there is no wonder that this issue has emerged as a significant challenge to manage subscriptions. With so many digital tools to manage and work with, it is quite easy to forget which software is still in use and which ones are no longer required.
If you end up forgetting to cancel the subscriptions you have made to the software you no longer use you will inevitably end up spending money on tools that you don’t even use, leading to unnecessary and quite damaging overspending.
If your business works with more than a few software then reconciling the payments for all these subscriptions can be a hassle. Especially if you do your spend reconciliation manually this task can be quite the challenge.
Finance and accounting departments will have to painstakingly match and verify each and every payment made for each and every software subscription you have. Not only can this process be painstakingly long and laborious but it is also highly susceptible to errors and discrepancies.
Financial data security can be a real issue when it comes to software subscription management. This can be especially problematic if you pay via credit card standing instructions.
Software providers may store your card or financial details, leaving the information vulnerable to theft, fraud, or misuse. If your software provider does not have adequate levels of security provisions then your business’s financial information can be really compromised.
To ensure you do not suffer the consequences of poor data security make sure you properly vet your software providers’ security protocols before getting them on board.
Software and digital tools are used by pretty much every department in a business organization. However, the larger your company and the more the number of departments the harder it will be for you to enforce accountability to manage subscriptions.
With multiple departments involved, segmenting the subscription expenses made by each department can be quite challenging. You will have to trace every payment back to the originating department, find out the particular employee who was the payee, and then hold them accountable for the expense made.
Establishing proper accountability with multiple software subscriptions at hand can be much more challenging than you think.
Constant visibility and control over software subscription payments can be a challenge, particularly if you use traditional or manual forms of subscription management. With so much software to work with and pay for, keeping track of each and every subscription and its associated payments can take a lot of meticulous effort.
In most cases where manual management systems are used, you won’t even know the full impact of subscription payments until the end of a month, quarter, or even a year sometimes. This means you have little in terms of control over how regular payments are being made and visibility over the patterns of subscription payments.
Under the pressure to keep up with competitors and industry trends, businesses might end up onboarding more SaaS products than they actually need.
While there is a SaaS tool available for almost every business process out there not all such products will be an essential requirement for your business.
Before you get so many digital tools on board make sure you first evaluate the needs and requirements of your business in terms of software products.
If, on the other hand, you already have too many subscriptions on your list then you might want to manage subscriptions that are unwanted or cancel them altogether.
Working with multiple software subscriptions at the same time is often the cause of mismanagement and overspending. Not all your software subscriptions will be running on the same payment cycles.
If you are using a manual subscription management system you’ll likely have to individually manage and pay for each subscription you work with. This is clearly not the most ideal or efficient way to manage subscriptions.
A better approach would be to centralize all your subscriptions in one place for easy management. The best way to do this is to employ a subscription management software.
This software comes with features that provide you with a comprehensive dashboard from where you can manage all your software subscriptions.
Overspending or unauthorized spending on software subscriptions often takes place due to the lack of a well-organized expense approval process. Having a concrete expense approval system in place for your business has a host of benefits.
Not only does it help eliminate cases of unwanted or unauthorized spending on software subscriptions but it also makes sure that a proper process is followed in paying for your subscriptions.
A typical expense approval system should have an easy expense-requesting process, a seamless workflow for obtaining approvals as well as a structured redressal function.
If you are using a traditional or manual software subscription system then the process of renewing your subscriptions can take a good amount of time as well as manual effort.
You will have to individually address every subscription you have, track when it is due to expire, and go through the whole process of renewal for each subscription.
Instead of going through this long and tedious process, you can simply use automate your software renewal process.
There are digital tools available in the market today that can easily do this job. These tools automatically monitor your subscription plans, track when renewals are due, and get the renewals done accordingly.
If the software providers you work with prefer to request payments via invoices then you also have to consider how you manage your invoicing process.
A typical business may receive invoices from multiple channels such as emails, accounting software, expense management portals, or even by hand.
With invoices coming in from so many different channels managing them all at the same time can be tricky. It can be easy to miss invoices, pay incorrect invoices, or even make duplicate payments. To avoid such problems the best option is to automate your invoicing process.
Properly tracking and monitoring your software subscription payments can solve a lot of problems that would have otherwise harmed your finances in the long run.
Make sure you have a subscription management system set up that lets you maintain constant and complete visibility over all your subscription payments. The ideal way to do this is to use a software service that can help you monitor payments in real-time.
Expense tracking software can give you real-time, instantaneous updates on how money is being spent on your software subscription payments.
As we have already observed in a previous point, using subscription management software can be instrumental in improving the way you manage your software subscriptions.
Most modern businesses work with more than a few software, and managing all these software at the same time efficiently is no easy task. However, having subscription management software at your disposal can make all the difference.
This software comes equipped with features that can make managing your subscriptions almost effortless.
Using this kind of software you can set up automated recurring payments so that you never miss a pay date. Additionally, you also get consolidated data and analytics reports on your spending behavior.
With Volopay at your disposal, you get access to highly capable, unique virtual cards that you can use to manage your software subscription payments with ease. You can issue an unlimited number of cards at no additional cost and assign an individual card for each subscription.
Payments made via Volopay are secured by multiple layers of bank-grade security. Additionally, you also get access to approval workflows and spend controls that you can employ to enhance financial security.
Volopay tracks and consolidates all your spending data to give you valuable, actionable insights and analytics on spending behavior.
With Volopay’s centralized dashboard system you can maintain complete control and real-time visibility over your subscriptions
Volopay also comes with in-built spend controls such as spend limits, easy freezing and blocking, in-store purchase controls and so much more.
You can set up a multi-level expense approval workflow on Volopay. This workflow is also highly customizable and can help completely eliminate unauthorized spending.
Start by creating individual virtual cards for each of the subscription payments you have to make regularly. You can create both one-time as well as recurring payment cards.
After creating the virtual cards you can set up and customize the approval workflow process to fit your operational structure.
Set your virtual cards up and customize the card controls and other settings as per the needs and requirements of your business. You can also specify information such as expiry date, funds limit, one-time or recurring payment pattern, and so on.
You can also sync your card expense details with your existing accounting software. With Volopay this is particularly easy because of the accounting triggers feature.
Once you are done setting up your virtual cards you can then proceed to make the actual payments. You can either choose to make the payment manually yourself or simply set up an automated payment date and the amount and let the system handle the rest.
Finally, after you are done paying for all your software subscriptions you can use Volopay as a subscription management software.
You can get a comprehensive overview of all your subscription payments and at the same time get in-depth data and analytical insights into your spending behavior.