Blog Strategy SaaS Spend Optimization: A 5-Step Guide to Cut Costs

SaaS Spend Optimization: A 5-Step Guide to Cut Costs

11 min read
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SaaS spend optimization is the process of cutting unnecessary software expenses while maximizing the value of the tools you actually use. With the right strategy, businesses can save money, reduce security risks, and improve operational efficiency.

What is SaaS Spend Optimization?

SaaS spend optimization involves identifying, managing, and reducing software expenses by eliminating underused or redundant subscriptions. It’s a core part of Technology Value Optimization (TVO), which helps organizations control costs, boost ROI, and improve software utilization.

Why Does SaaS Spend Optimization Matter?

Most businesses are wasting money on unused software. As of 2024, over 53% of SaaS licenses go unused, costing organizations approximately $21 million annually in wasted spend.

This growing problem—called SaaS sprawl—creates financial waste, compliance risks, and productivity issues.

4 Reasons to Prioritize SaaS Optimization

If you sell video games online, SaaS or software, due to the increased level of competition on the market, you are tempted to use all sorts of apps that guarantee greater visibility.

There are 4  key reasons why it’s worth focusing your attention on SaaS optimization and figuring out exactly what you’re spending on your SaaS usage.

1. Boost Team Productivity

Cutting duplicate or irrelevant apps ensures your team uses the right tools at the right time. This reduces confusion and boosts collaboration across departments.

2. Establish Software Priorities

Track usage and spending data to understand which tools offer the most value. Use this data to inform renewals, cancellations, and upgrades.

3. Minimize Security Risks

Unused or unauthorized apps can expose your business to data breaches. With full visibility, you can restrict access, eliminate shadow IT, and protect sensitive data.

4. Cut Unnecessary Costs

Unused licenses are a silent budget killer. Proactive license management and app audits lead to measurable cost reductions.

SaaS Spend Optimization Cut Costs

How To Optimize Your SaaS Spend

Step 1: Make Your SaaS Stack Visible

Create an inventory of every app, license, contract, and cost. Without visibility, optimization is impossible.

Step 2: Audit Regularly

Conduct audits every 3–6 months. SaaS needs evolve quickly, and regular reviews keep your stack lean and aligned

Step 3: Set Priorities:

Prioritize software based on:

Cost

Renewal dates

Number of users

Business value

Focus on the highest-cost apps first for quick wins.

Step 4:  Set Usage Goals

Set a target SaaS utilization rate (e.g., 90%). Track your current usage and aim to close the gap through smarter license allocation.

Step 5: Eliminate Waste

Centralize software purchases. Don’t let employees buy SaaS tools ad hoc. Create a governance team to approve and manage purchases.

 

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How to Handle Unauthorized or Redundant Apps

Unauthorized apps may be tools purchased by employees without approval or ones that duplicate existing functionality.

Best Practices 

Communicate with employees to understand their needs

Replace overlapping tools (e.g., Dropbox vs. Google Drive)

Monitor logins to identify low-use or rogue tools

Remove former employee access to avoid data and cost risks.

 

Your Dedicated
eCommerce Partner

Thrive with the industry's most innovative all-in-one SaaS & Digital Goods solution. From high-performing payment and analytics tools to complete tax management, as well as subscription & billing handling, PayPro Global is ready to scale your SaaS.

Sell your SaaS globally with PayPro Global!

 

Proactive License Management Strategies

Check License Usage

Use login and activity data over 30, 60, or 90 days to assess actual usage. Downgrade or reassign licenses where necessary.

Tailor Licenses by Role

Not every employee needs premium features. Match license types to usage patterns.

Use Automation

Leverage SaaS management tools or platforms to automate license assignments based on usage data.

Promote Company-Wide Adoption

Adoption increases ROI. Encourage the use of selected tools by:

Launching internal campaigns

Holding training sessions

Appointing team champions for new apps

Manage Renewals with a Calendar

Track renewal dates to avoid unwanted auto-renewals. Use tools to consolidate this data and get alerts in advance.

Plan for Future SaaS Needs

As your business scales:

Forecast department-level software needs

Monitor usage trends to anticipate expansion

Adjust subscriptions proactively

 

How a Merchant of Record (MoR) Like PayPro Global Supports SaaS Spend Optimization

A Merchant of Record (MoR) handles the entire transaction lifecycle, including payment processing, tax compliance, fraud prevention, and more. For SaaS businesses, MoRs offer major cost-saving and optimization benefits.

How MoRs Like PayPro Global Help

PayPro Global's MoR offers: 

Simplified Payment & Compliance

Automates global tax management (VAT, GST, etc.)

Handles currency conversions and exchange risks

Reduces legal liability for compliance and billing

Subscription & Revenue Recovery Automation

Prevents involuntary churn with smart dunning workflows

Supports flexible billing models (e.g., usage-based, tiered)

Recaptures failed payments automatically

Advanced SaaS Analytics

Get actionable insights into churn, revenue, MRR, and LTV

Identify underperforming regions, plans, or user segments

Optimize pricing and feature sets based on real data

Centralized Software Stack

Reduce 3rd-party dependencies with one full-service platform

Unify billing, subscriptions, trials, upsells, renewals, and reporting

Eliminate redundant tools with a single MoR solution

 

Why Choose PayPro Global for SaaS Spend Optimization?

PayPro Global is more than just a billing tool. It’s a full-service MoR platform designed specifically for SaaS, software and video games companies. With PayPro Global, you get:

SaaS subscription billing
Automated renewals, complete tax management and trial management
✅ Built-in compliance across global markets
✅ Customizable pricing and discount models
✅ Business intelligence dashboards for optimization

 

Your Dedicated
eCommerce Partner

Thrive with the industry's most innovative all-in-one SaaS & Digital Goods solution. From high-performing payment and analytics tools to complete tax management, as well as subscription & billing handling, PayPro Global is ready to scale your SaaS.

Sell your SaaS globally with PayPro Global!

Conclusion

SaaS spend optimization isn’t just about cutting costs — it’s about making smarter choices with the tools you invest in. By gaining visibility, removing redundancy, managing licenses effectively, and leveraging MoR platforms like PayPro Global, you set your business up for leaner operations and long-term success.

Ready to sell software online internationally now that you know how to optimize your SaaS spending? Get in touch with PayPro Global , your full-service eCommerce partner.

 

FAQ

FAQs 

What is SaaS spend optimization?

SaaS spend optimization is the process of cutting costs on software subscriptions while maximizing the value of the tools you use. It involves identifying and eliminating underused or redundant applications to improve your ROI.

Why is managing SaaS spend important?

It's important because most companies waste money on unused software. With over 53% of licenses going unused, businesses lose millions annually. Poor SaaS management also creates security risks and lowers team productivity.

What is SaaS sprawl?

SaaS sprawl is the uncontrolled growth of software applications in a company. It happens when new tools are added without oversight, leading to redundant apps, wasted money, and significant security gaps.

How do I start optimizing my SaaS spend?

The first step is to create a complete inventory of every app, license, and contract. You cannot manage your software spend until you have full visibility of what your company is using and paying for.

How can I improve my SaaS license utilization?

Improve utilization by tracking login data to find inactive users. From there, you can downgrade or reassign licenses to employees who actually need them. Avoid giving every user a premium license by default.

Is SaaS spend optimization only for large companies?

No, it's essential for businesses of all sizes. Even for small companies, eliminating waste from unused software can free up significant cash flow and establish good financial habits as you grow.

Meet the Author

Hanna Barabakh

Hanna Barabakh is a language and content specialist passionate about SaaS, technology, and e-commerce. Her expertise in multilingual content, connected to her background in Lexicography and Translation Studies, allows her to communicate complex ideas across cultures easily. She uses her knowledge to create engaging content that resonates with global audiences. In her spare time, she enjoys reading and exploring new ideas.

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  • Businesses that want to reduce expenses and get the most out of their software investments must optimize their SaaS spend.
  • Key optimization tactics include proactive license management, regular SaaS audits, and getting rid of unnecessary programs.
  • Consider using a Merchant of Record (MoR) such as PayPro Global to manage subscriptions, payments, and compliance.

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