The best SaaS Spend Management Softwares compared

SaaS Spend Management Software Definition: What is a SaaS Spend Management Platform?

The acronym "SaaS" stands for "Software-as-a-Service". This refers to a licensing and distribution model in which software is provided online or in the cloud. Users of such a system usually do not have to perform any maintenance or update tasks in the IT backend. Companies receive the respective SaaS ready for operation and with the guarantee of long-term secure usability – as a complete service. The use is usually via browser and on a subscription basis. Payments for the booked package and for the relevant license(s) are due monthly or annually.

A SaaS spend management software helps managers, IT departments, accountants or other responsible parties keep track of the costs for such programs. The core goals of such spend solutions are to provide companies with a holistic and centralized overview of their SaaS expenses and to allow them to optimize costs through specific insights.

The handling of all SaaS cost factors - from the booking of new systems to the cancellation of no longer needed ones - ideally takes place exclusively via the respective SaaS expense software. In detail, suitable tools streamline the contract management of (new) SaaS services, track expenses, forecast long-term costs for SaaS subscriptions, manage SaaS licensing or renewal, and control product usage.

Why Should Companies Use a SaaS Spend Management Tool?

When using a SaaS, IT managers in companies and ultimately the users can focus entirely on using the respective program. Inside the company, no special IT infrastructures and/or personnel resources are necessary for the operation of a Software-as-a-Service. In addition to these savings, the SaaS model brings many advantages - from rapid implementation to very easy remote use and highly flexible scalability of the respective solutions.

More and more companies are recognizing the numerous SaaS benefits and broadly using them. Various studies indicate that on average about 80 percent of the programs used in companies are SaaS applications. In Germany alone, Statista anticipates an increase in spending on SaaS services of more than 40 percent based on past sales figures.

However, there is often a significant problem: Gartner studies estimate that between 30 and 40 percent of technology spending is hidden costs. Employees or departmental managers often decide autonomously that a certain Software-as-a-Service is to be acquired (shadow IT or shadow software). This is possible because no major internal setup work or special IT infrastructures or more personnel resources are required for SaaS.

This "black hole" in software costs makes it impossible to accurately assess what is really being acquired and actively used and what advantages arise from it or whether individual programs are beneficial at all. In the worst case, a lot of money is thrown away. For example, a SaaS service subscribed to for less than ten Euros a month without agreement, but which is hardly used, initially raises no concerns. However, if you multiply this one case - for example by 20 - and look at a period of two years, the figures quickly add up. This can lead to a noticeable and alarming reduction in sales.

The often numerous SaaS contracts in companies alone and the usually associated high costs make central organization of all financial aspects around Software-as-a-Service applications using a specific spend management solution extremely useful. Especially when many SaaS applications are in use, it can quickly happen that apps are paid for twice, sensible contract cancellations are overlooked or unused licenses of individual users go unnoticed. Add to this the relatively high risk that various SaaS licenses as shadow software lie in the dark, the relevance increases considerably.

How Do SaaS Spend Management Solutions Work?

A software-supported SaaS spend management process obviously depends centrally on the features of the respective solution. The following tools and related processes are typical.

• Assistance with SaaS purchasing decisions: SaaS spend software can give responsible parties insights into the latest SaaS tools and related product information. It then supports users in finding out how the existing and potential new tools work together. This way, harmful barriers in the final workflow can be avoided. It is possible to compare prices, implementation times, support, and other aspects of relevant SaaS providers.

• All providers on a unified platform: With a good SaaS spend management platform, all existing and potentially forthcoming SaaS contracts can be managed centrally. This gives those responsible a comprehensive overview and enables a precise reaction to changing requirements. With SaaS spend management software, users can organize existing contracts in various ways. There is, for example, a category-based search, sorting functions, displays for renewals as well as other important events and the option to quickly carry out certain actions.

• Faster approval workflows: SaaS expense software makes it possible to implement approval workflows, streamline renewal requirements and simplify the entire process of procurement and long-term payment of corresponding applications. Those in charge get a clear overview of purchases, renewals, usage assignments and possible cost savings. Automated reminders for renewals can also be used. Approvals for purchases are directed directly to the right places via business messengers or emails.

• Tracking SaaS usage by employees: SaaS spend software usually provides the opportunity to track the use of individual SaaS tools for each department and all users. Monitoring based on certain roles, for example as an administrator or end user, is also possible. Corresponding features can be essential for identifying unused or less used licenses. Also, additional licenses that may be needed can be precisely determined. The company ultimately only pays for what is really needed.

• Simple and meaningful reporting: Using a SaaS management platform, those responsible gain insight into usage trends and can possibly perform further analyses. Easy-to-use reporting and visualization tools ensure that corresponding findings are optimally prepared and particularly useful for decision-making. Thanks to such data-driven and visually practical insights, including diagrams, scales, etc., smarter purchasing decisions can be made.

What Advantages and Disadvantages Do SaaS Spend Management Platforms Offer?

The main benefits that companies can take advantage of when using a SaaS spend management software are of course the highly efficient cost regulation and the prevention of unauthorized tool purchases that it offers. The following summarises the detailed benefits associated with this.

• Efficient expense tracking: No company wants to find at the end of the quarter or month that it has overspent. With a SaaS expense management software, this can be very efficiently prevented. With it, those responsible can comprehensively track the costs for SaaS services. They thus get a better overview of what individual departments or employees are spending on SaaS acquisitions. This does not have to limit teams, but it does help to identify and eliminate pointless purchases in the long run.

• Central Overview: In a SaaS spend management software, those in charge can get a central overview of all SaaS products in their company. They can track the usage of individual applications and compare corresponding expenses. This offers the opportunity to identify wastage or potentials for additional tools. The insights gained here can be used by all teams to optimize the SaaS stack.

• Workflow Automation: SaaS spend software shortens approval cycles for renewals and new purchases through automation. When done manually, corresponding approval emails and phone calls can demand enormous time. Access to potentially very important tools is significantly delayed.

• Seamless Integration: Today, companies typically use multiple tools for accounting. Ideally, the SaaS cost software can be seamlessly integrated into this program stack. This provides companies with a single "source of truth" for all costs - including SaaS. This makes corresponding monitoring and cost-benefit calculations even more efficient and goal-oriented. Because this way, SaaS costs can be compared to all other expenses and there are no system breaks.

• Reporting: Good SaaS spend software offers those in charge analysis and reporting functions. These provide insights into the purchase history and allow tracing back to the level of individual departments or people. Everything is ideally visually presented in intuitive reports, without anyone having to make the effort of manual data evaluation and design. Corresponding reports are very effective for limiting expenses, planning the budget, and taking other important decisions in a well-founded manner.

SaaS Spend Management software doesn’t have any significant disadvantages. However, there is one crucial point in its use that companies often stumble over.

• Incomplete Centralization: SaaS spend software can only fully exploit its potential if all processes related to SaaS expenses are truly processed via the respective solution. Ideally, there is no way around the respective management software for software purchases, package adjustments, or contract extensions. Unfortunately, this is not the case in every company. In many places, a less strict strategy is followed, so that despite SaaS expense management, programs slip past the system every now and then. This should be avoided as much as possible – especially since this threatens massive hidden costs.

How Do You Choose the Best SaaS Spend Management Software for Your Own Purposes?

SaaS expense management platforms give those in charge a better overview and control over recurring payments for specific programs. They make it possible to manage SaaS subscriptions easily and thus optimize cost efficiency.

However, for maximum benefits, such an application must also be carefully selected. Given the size of the market and the diverse features available, this is far from easy. By considering the points listed below, decision-makers can significantly simplify the search.

Cover all major spending errors For a SaaS Spend Management tool to be effective, it must primarily help identify all areas with excessive spending. There are actually several typical wastes associated with SaaS services:

• Ideally, the tool recognizes duplicate and/or unauthorized applications, also known as shadow IT or shadow software. These are often different applications to solve the same problem. It's not uncommon that there are a number of tools with common functionalities. The best SaaS Spend Management software detects these.

• Often list prices are simply accepted or licenses are not optimized. A typical example relates to SaaS applications where companies get price advantages for larger packages. Of course, this is generally not bad – but only as long as buyers assess their needs accurately. If you just buy for the sake of a discount, you'll ultimately end up paying much more than necessary. Good SaaS-Spend software also reveals such expenses.

• Unresolved licenses are another frequently occurring spending issue. For example, when a person leaves the company, the responsible parties should ensure that their licenses for all previously used SaaS programs are revoked. Without the centralized overview of a SaaS Spend Management software, it is relatively difficult to get an overview. If shadow applications have been subscribed on top of that, the matter becomes even more critical.

• Also, forgotten cancellations repeatedly lead to unnecessary costs. Due to automatic extensions of contracts and the expiration of free trial periods, quite a few companies pay for programs that they don't actually need. Ideally, a SaaS Spend-Software warns those responsible automatically before such events.

Choose software with a good reputation Next, decision-makers should take the time to find a serious and customer-friendly solution. They need to ensure that the online reviews about the tool are positive and that the users were satisfied with the services offered.

When reading reviews, interested parties should always pay attention to comments left on independent review platforms. After all, you don't want to fall for any marketing texts. Apart from that, it can be helpful to take a look at the client base of the SaaS Spend Management company. If there are big names to read, this is usually a good sign. In the above SaaS Spend Management software comparison, there are several brief reviews from real users about the individual solutions.

Consider functionality An effective SaaS expense management tool should not only help identify areas where companies spend too much money, but should also be useful in controlling other spending-related issues.

The best solutions for controlling SaaS expenses offer a wide range of other innovative features. For example, it is possible to get full transparency about the status of all payments via a central dashboard. Furthermore, payments can be traced in detail. Links are made to the relevant department heads, teams, or individuals. Unlike corporate credit cards, (IT) managers or accountants using SaaS spend tools can trace who is responsible for each payment and why.

Don’t forget the usability Last but not least, user friendliness should also play a central role in the research. Nobody wants a tool with a long learning curve. Instead, the aim is to rely on an application that can be easily integrated into the current software stack and corresponding processes around operating expenses.

Ideally, the usability of a tool is evaluated using a demo or a free trial version. Also, the reviews of other users often provide insight into whether there is a steep learning curve or not.

How Much Do SaaS Spend Management Tools Cost?

SaaS spend management providers usually offer their solutions in subscription models. Customers pay either monthly or annually for their licenses. How expensive it becomes depends largely on how many SaaS programs are to be monitored and which functions are required. There are, for example, basic packages and professional bundles or enterprise suites.

If you're just looking for a simple system to create an overview of expenses and keep them under control in the long term, you don't have to spend more than 100 euros. Tools with very limited functionality are even completely free. More detailed cost assignments as well as analytics and reports cost significantly more. For more comprehensive programs, between 100 and 500 euros must be calculated.