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· N Khanna

You do not have a software spending problem

You have a sorting problem. Every list of what a company pays for arrives sorted by supplier. Sort it by what each thing does instead and the duplicates show up in 20 minutes. In an illustrative 60-person distributor that is $10,020 a year, and the renewal calendar behind it is worth more.

A graphite pencil drawing of a cork board behind a wooden desk. 7 paper strips cut from a statement are pinned to the board in separate groups, a large magnifying glass hangs over the leftmost group where the strips look near identical, a long statement unrolls across the desk below, and coins fall from the strips into an open green money box.
The whole thing up frontSort your recurring software charges by what each one does instead of by who invoices you. In an illustrative 60-person distributor with 41 charges, that surfaces 3 tools doing 1 job and 2 doing another. Canceling the duplicates is $10,020 a year against $3,200 of switching cost, paid once, so $6,820 in year 1. Then the calendar. 17 of the 41 renew in the same month, which is 25 hours of review nobody has, so all 17 renew themselves. And 26 of the 41 cost under $200 a month, so not 1 of them ever needed approval. The sort costs a morning. Almost nobody does it.

I have spent years working inside other people's operations, and every time somebody has handed me a list of what their company pays for, it has arrived sorted by supplier.

Every single time.

I have never once been handed that list sorted by what the things actually do. Not by a bookkeeper, not by a finance lead, not by an owner who built the company from nothing and knows where every dollar goes.

That is not a criticism of any of them. It is what every system hands you. Card statement, accounts payable ledger, the export from the accounting package. Supplier name, date, amount.

What changed, and why this is worth 20 minutes now

Buying software used to need a purchase order and an IT department. There were 2 or 3 people in the building who could say yes, and everything went past them.

That is gone. Anybody with a corporate card and a browser is a buyer now. Marketing buys. Operations buys. The warehouse buys. A new hire buys.

Nobody moved the approval threshold to match. Most companies still set it near $1,000, and a $180 monthly subscription never touches it.

So the control that used to govern software spend is gone and nothing replaced it. Not the tools, and not anyone’s job description.

The sort is cheap and almost nobody does it.

Sorted by supplier, it tells you nothing

A supplier name does not tell you what you bought. A supplier sells 6 products and you own 2 of them. Another is an acronym from a company that got acquired 3 years ago. A third arrives as PMT* HLXAPP and means nothing to anybody in your building.

So you scan 41 line items, you recognize about 30, and you close the tab. I have watched capable people do this and then apologize for it.

Now sort the same 41 by what each thing does. Not who bills you. What it does.

3 of them send email to customers. 2 of them store files. 2 of them track where an order is.

You just found it.

The same 7 charges sorted by supplier, then sorted by what each one does On the left, 7 recurring charges listed the way a card statement shows them, as opaque payment descriptors in no meaningful order. On the right, the same 7 charges grouped by function, which puts 3 of them in a single group for sending email to customers and 2 each in groups for storing files and tracking orders. The duplicate group is the finding. Sorted by who invoices you 7 descriptors, no pattern Sorted by what it does 3 jobs, 1 of them bought 3 times PMT* HLXAPP SUB* NRDG-SYS WEB SVC 4471 PMT* CVX-MEDIA SUB* MAILBRIDGE ARDL-LABS SUB WEB* ORDERTRK same 7 Sends email to customers PMT* HLXAPP SUB* MAILBRIDGE PMT* CVX-MEDIA Stores and shares files SUB* NRDG-SYS ARDL-LABS SUB Tracks where an order is WEB SVC 4471 WEB* ORDERTRK

Nobody decided to buy 3 email tools. Marketing bought 1 in 2023. The person running the old webstore bought another, then left. Somebody got the third in a bundle with something else they wanted.

Every one of those was a good decision on the day somebody made it. So nobody made the bad decision. The bad decision made itself, because the only view anyone ever had was sorted by the name on the invoice.

The arithmetic

Cancel 2 of the 3:

  • The one the departed webstore manager bought. $260 a month.
  • The one that came in the bundle. $145 a month.

$405 a month. $4,860 a year.

Next group. 2 order-tracking tools, same job, 2 departments, bought 2 years apart by 2 people who did not know about each other. 1 costs $340 a month, 1 costs $210. Keep the cheaper one, move everybody onto it, remove $340 a month. $4,080 a year.

$4,860 plus $4,080 is $8,940. Add the duplicate file store at $90 a month and you are at $10,020 a year.

Now the number most write-ups leave out. Moving people off a tool costs real money. Export the data. Rebuild the templates. Retrain the 6 people who used it. Accept 2 weeks of everything being slightly worse. Call it $3,200, once.

Year 1: $6,820. Every year after: $10,020.

It is on paper until you do it

Those figures are an illustration, not a client. I built them the way we build a real ledger, but the company is on paper.

Not every business has 3 email tools. Some of you will run this sort and find 41 charges doing 41 different jobs, and the honest answer then is that you are already tight and it cost you a morning to prove it. That is a genuinely useful result and I would rather you got it for free than paid us to tell you.

And a saving that ignores the cost of switching is just a quote. That is why the $3,200 is in there. I would rather publish the smaller number that survives contact with reality.

This is also 1 category. The audit looks at 9 of them. This is the 1 you can run without us.

The second one is worth more and costs nothing

17 of the 41 renew in the same month.

That is not bad luck. Somebody bought a batch of things when the fiscal year started and every anniversary since has fallen in the same 3 weeks.

A renewal you actually review takes about 90 minutes. Pull the usage. Work out who logs in. Check the market rate. Write the email asking for a better number. Wait. Read the reply.

17 renewals times 90 minutes is 25 hours and 30 minutes.

In 1 month. On top of the month you already have. Done by the 1 or 2 people capable of doing it.

So it does not happen. All 17 renew themselves at whatever number the supplier picked, and everybody agrees to look at it properly next year.

Renewals piled into 1 month, and the same renewals spread across the year 2 calendar tracks of 12 months each. In the first, 17 of the 41 contracts renew in January, which leaves no time to review any of them, so they auto-renew. In the second, the same contracts are spread across the year at 1 or 2 a month, which makes each one reviewable. How it renews now Nobody has 25 spare hours in January, so all 17 renew themselves How it renews after you move the dates 1 or 2 a month, each with time to prepare 17 renewals J F M A M J J A S O N D J F M A M J J A S O N D

The fix is 1 email per supplier. Most will co-term a contract to any date you name, because a supplier would rather move your renewal than lose the conversation.

Move 3 a year. In 4 years every renewal on your list gets its 90 minutes.

Where it keeps coming from

26 of the 41 charges cost under $200 a month. Not 1 of them ever crossed an approval threshold.

26 charges at an average of $115 a month is $2,990 a month. $35,880 a year, bought entirely below the line where anybody looks.

Approving every $90 subscription would cost more in meetings than it saves. So do these 4 things instead:

  • Give the category 1 owner. Not a committee. 1 person who can name what is in it.
  • Put every recurring charge on 1 page with what it does and who uses it, sorted by function.
  • Read that page every quarter. Software renews continuously and an annual review is the wrong resolution for it.
  • At purchase, ask the only question that matters. Do we already own something that does this.

Monday

Export 12 months of recurring charges from the card and from accounts payable. Put them in a spreadsheet.

Add 2 columns no system will give you. What it does, in plain words. And the renewal date.

Sort by the first column. The duplicates announce themselves.

Sort by the second and you will find your own version of the month with 17 in it.

That is a morning, and it is the same morning we spend in week 1 of an audit.

I am giving the method away because it is not what you would be paying us for. Anybody can sort a spreadsheet. What takes 3 weeks is costing the switch honestly, checking the cheap tool actually connects to what you already run, and working out which of the 41 is holding up something you cannot afford to have go down.

So go do the sort. It is 20 minutes and it is sitting in a column you already have.

And if you would rather we ran it with you, the audit is 3 weeks and $2,500, and if we cannot identify $7,500 a year you do not pay. My co-founder and I take 3 a month, which is a real limit and also why I would rather you tried the free version first.

We run this as a fixed-fee audit. $2,500, and if we find less than $7,500 a year we refund it.

See whether it fits your company