Strategies for streamlining subscription management and optimizing spend

Written By

Anisa Purbasari Horton

Graphic illustration showing list of subscriptions with cursor selecting a few to cancel | Subscription management tips for your startup | Mercury
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Banking engineered for startupsExplore MercuryMercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.
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One of the most common pieces of advice you’ll see in personal finance articles when it comes to saving money is to audit your subscriptions. Maybe it’s a streaming service you don’t watch often enough, or a gym that you don’t really step foot in to justify the recurring costs. It’s one of the easiest ways to save money because if you don’t pay attention to it, those seemingly small payments can add up to a substantial amount over time.

The same applies to your startup. If you don’t keep a close eye on your subscriptions, you can spend a lot of money on tools you no longer use, unnecessary licenses, or duplicate subscriptions.

Here, we share some advice on ways to keep your subscription spend in check — and how to make sure you have the right controls in place for you and your team to ensure smarter spending at every stage of your company’s growth.

Do an audit of recurring payments and auto-renewals

One of the first steps in making sure that you’ve got a strong handle on your company’s spending is taking stock of your current spending patterns. In most cases, you’ll have opted into an auto-renewal flow when you or someone on your team signed up for a new tool or product — and in most of those cases, the subscription will renew automatically at the end of the term if you don’t actively cancel it. This is a quick way to rack up ongoing payments that can go unnoticed easily — payments that will eat into your cash flow over time.

Doing regular audits of your recurring payments and auto-renewals — quarterly if your company is young and cash flow is tight, or maybe once or twice a year if the company is more mature — helps ensure that no ongoing expenses are going unaccounted for or being kept unnecessarily. It’s also a chance to reset and assess whether all of the tools and subscriptions you’re currently paying for are ones your company truly needs, or if there are any you can do without.

Did you know?

Mercury gives you a bird’s-eye view of all your company’s debit or credit card subscriptions in one place.

Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.
1 From your Subscriptions page in your Mercury dashboard, you can view, track, and manage all your card subscriptions — including which employees are paying them, which cards are being used, and how much you’re spending with different merchants. We’ll automatically notify you about new subscriptions, flag duplicate ones, and direct you to merchant websites to cancel as needed — helping you reduce costs and save time.

Try Subscription Management

During this audit, make sure to ask the department leads what tools their teams are actively using on a day-to-day basis, and to what extent they utilize the features that the subscription provides. Identify not just whether or not teams are using what they’re paying for, but also that they’re not paying for excess usage and licenses that they don’t need. (It’s not uncommon for a company to have a process in place to add new licenses for additional team members while failing to remove the seats of those who no longer use the tool or aren’t with the company anymore.)

And while actively auditing your company’s subscriptions helps keep your expenses in check, it’s just as important to get ahead of things by maintaining good procurement flows for new tools. Another way to ensure smarter spend is utilizing company cards with custom spend limits or merchant locks.

Did you know?

All of Mercury’s debit

The Mercury Debit Cards are issued by Choice Financial Group and Evolve Bank & Trust, Members FDIC, pursuant to licenses from Mastercard.
2 and IO credit cards
The IO Card is issued by Patriot Bank, Member FDIC, pursuant to a license from Mastercard.
3 have the option to be set up as merchant-locked cards, which restricts spending on that card to a single merchant. Add daily, weekly or monthly spending limits per card, for even greater control over your team’s subscription spend.

Explore IO

Negotiate better terms with merchants wherever possible

While most subscriptions or tools your team will use have set off-the-shelf pricing and packages, there’s often room to negotiate better terms or package deals, whether that’s related to pricing, renewals, account support, or feature access.

And this is especially true if you’ve been a loyal customer or have multiple licenses with a merchant, since those companies will likely be willing to work with you to ensure that you don’t churn. As you approach any of these negotiations and seek more favorable terms, it helps to go into these conversations from the position that you’re building a long-term relationship with this merchant or vendor — one that is mutually beneficial and has a lot of growth potential.

You should also prioritize flexibility in your terms since the reality is that your company is probably changing quickly and your needs will change. Think about scalability and how your usage patterns might change over time. This will help ensure that the terms you’re negotiating are well-aligned with your growth plans and business cycles.

Upgrade or downgrade on an as-needed basis

Again, as your company grows, your needs will change — and as a startup, this is probably going to happen often and quickly. Subscriptions that you needed or that offered a lot of value when you were a 20-person company might not really have a purpose when you’ve scaled to 200+ employees. And conversely, if your team is still quite small, you might not need a super robust tool with all the bells and whistles that a more sophisticated company would benefit from more. In that case, the more advanced subscription might not necessarily warrant the extra cost.

If you’ve gone through your audit and found subscriptions that aren’t really serving your company’s purposes but that you don’t want to lose altogether, see if your terms allow an upgrade or downgrade before the end of your contract or payment cycle. If that option isn’t available for you right now, make a note of when you’ll be able to adjust your subscription to have it match up better with your company’s needs, and then revisit when the time comes.

In a lot of cases, you might also find that there’s a free version of the tool that has just enough to serve your company’s needs at any given time. If you’re considering a new tool, this is a good place to start, especially for tasks that don’t necessarily call for a lot of features. You might even find that the free version of a tool isn’t just good enough, but pretty robust.

Take advantage of discounts and bundles

A lot of software providers provide volume discounts. Those who charge a per-user model, for example, may lower the per-user price as you add more seats to your subscription package. It may also be worth looking at product bundles if you’re using a lot of different companies for various different things. There may be an opportunity to consolidate your services, which will not only be an opportunity to reduce subscription costs overall but can also help lead to cleaner accounting and spend management by streamlining your subscriptions and leaving you with fewer accounts to manage.

Some providers will also offer long-term discounts if you’re willing to commit for multiple years. This may be a great option if you know that your company’s needs are not going to significantly change during the terms of the contract.

Explore alternatives to current subscriptions

As you do your subscription audit and go through some of the steps to renegotiate with a merchant or adjust your plan to your needs, you might find that you’re better off looking for an alternative to a subscription or tool in your current software stack. If a current subscription isn’t really matching up with your needs or budget, go back to the drawing board and explore the other options out there. You’ll have the advantage of going into exploratory conversations or demo calls with a clearer idea of what you need, so you’ll be well-equipped to assess all your choices and find the right match for your company.

Did you know?

Navigating the sea of platforms and tools out there can be daunting. Whether you’re looking for a new project management tool, a new CMS, or a cloud computing platform, there are tons of options to choose from — and doing it takes time and effort. To help streamline the process, Mercury Raise created the Software Stack, a guide to top-tier startup tools and platforms, curated with the help of our extensive founder community. We’ve also got a range of partner perks that Mercury customers can leverage to get the best deals on their preferred tools.

Explore the Software Stack

Look at your payment methods

Lastly, you can optimize your subscription spend by being strategic with your payment methods – like opting to use a business card that provides perks or cashback that you can then reinvest into your business. For example, the IO Mastercard from Mercury offers 1.5% cashback on all spend, so making this your go-to payment option for recurring expenses is an easy way to regularly earn cashback on subscriptions that you’ll already be paying for every month.

To receive cashback, your Mercury accounts must be open and in good standing, meaning they cannot be suspended, restricted, past due, or otherwise in default.

Left unchecked, subscriptions can lead to preventable overspending. But if you take the time to create a system that ensures you’re investing in the right tools (and making the most of them), you can protect your company’s cash flow and free up time to focus on doing the work that’s important.

Written by

Anisa Purbasari Horton

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