Where licence problems come from
Software licensing used to mean a box with a key on it. Now almost everything is a subscription, bought monthly or annually, often on a credit card, sometimes by whichever staff member needed it. A typical ten to twenty person office may pay for Microsoft 365, an accounting system, a payroll system, a practice or job management system, a design tool, an e-signature service, a survey tool, a password manager and several smaller apps, each with its own billing cycle.
Two problems follow. Businesses pay for licences nobody uses, because a leaver's seat was never removed or a trial quietly turned into a paid plan. And they run software they aren't properly licensed for, such as one licence shared between several people, or a personal-use version used for business. The first wastes money; the second can cause compliance problems and, occasionally, a bill from the vendor.
Build a licence register
Start a spreadsheet or a list in SharePoint with one row per product. Record the name, what it's used for, the vendor or reseller, the plan or edition, the number of seats, the cost per seat and total, the billing frequency, the renewal date, the payment method, who the admin is and which email address receives the bills and renewal notices.
To find everything, check the business credit card and bank statements for the past year, your accounting system's recurring bills, and invoices in the accounts mailbox. Ask staff what tools they use; you'll often find a few that were signed up for with personal email addresses. Each of those needs moving to a business account.
Match seats to people
For each product, compare the number of seats paid for against the people who actually use it. Microsoft 365 admin centre shows assigned licences and sign-in activity; most other cloud tools have a users page. Look for licences assigned to leavers, duplicate accounts for the same person, and users who haven't signed in for months.
Also check that people have the right plan. In Microsoft 365, for example, some staff may need desktop Office apps while others only use web and mobile apps; the plans differ. Matching the plan to the role can save money without anyone losing what they need. Check current Microsoft pricing and plan features before changing anything, because they change periodically.
Control new purchases
The register only stays accurate if new software doesn't appear without anyone knowing. Make a simple rule: any new software, app or cloud service used for work is approved by the IT owner before purchase or sign-up, and is added to the register. Free tools count too, because they often hold business data and can turn into paid plans. This isn't about saying no. It's about checking that the tool doesn't duplicate something you already pay for, that it's reasonably secure, that it will be signed up for with a business email address, and that someone knows to cancel it when it's no longer needed.
Renewals and annual commitments
Put renewal dates in a shared calendar with a reminder a month or two ahead. Many subscriptions auto-renew, sometimes with a price increase, and some annual plans can only be reduced at renewal. A reminder gives you time to review seat counts, compare plans and decide whether you still need the product.
When you consider switching from monthly to annual billing to save money, check the commitment carefully. Annual plans are often cheaper per seat but you may be unable to reduce seats until renewal. For a stable team, that's usually fine; for a business with seasonal staff or changing headcount, monthly flexibility may be worth the extra cost.
Review quarterly
Once a quarter, the IT owner should spend half an hour with the register: remove leavers' seats, cancel tools nobody uses, check upcoming renewals and confirm admin contacts are still correct. If you work with an IT provider, they can do much of this for Microsoft 365 and other systems they manage, and Office IT includes a licence check in its regular client reviews.
The register also pays off in other ways. It speeds up the leaver process, helps when an insurer or auditor asks what software you run, and gives a buyer a clear picture if you ever sell the business. It is one of the cheapest and most useful pieces of IT administration a small business can do.
In short
- Keep one register of every subscription with seats, costs, admins and renewals.
- Check bank statements and recurring bills to find everything.
- Compare seats paid for against active users every quarter.
- Route all new software purchases through one person.
- Review annual commitments before they renew.