Imagine the scene - a new contractor has come into your business to review your expenses.
You show them the bank account and they decide to go through your transactions to see how many subscriptions you have.
What would they find?
This is an ever-increasing problem for businesses as most online services and software are bought on subscription.
And while some subscriptions are incredibly useful, if you’re not sure what each of those subscriptions is for, you risk ending up in a situation where you’re doubling up on services.
So what can you do to make sure you don’t suffer from subscription overload?
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Subscriptions make complete sense.
If you buy complex software or services that would otherwise cost a fortune then a subscription is a great way to spread the cost.
It means that smaller businesses can afford to compete with larger ones because the barrier to entry is lower.
But they do come with a risk – inertia.
See how many of the following apply to subscriptions you have in your company.
Often subscriptions were bought to gain access to a different tool. Perhaps the project has finished or you no longer work with the client but forgot to cancel your payments.
Often people buy a subscription to help with their role but when they leave the need for the tool also goes. The problem is the person who remembers what that subscription was for is now an ex-employee!
When you signed up for a particular service you really needed the premium version. Now though, you find that you don’t need all the tools and could make do with a basic or free version but just haven’t changed the setting.
You know the deal, you put your card details in to get the trial version but the software wasn’t for you. But you agreed to allow the company to charge you if it wasn’t cancelled at the end of the trial.
You may have found a better service that perfectly suits your needs and you signed up, but forgot to cancel the old version.
So you bought an add-on, then another add-on, then another add- on and so on. Before long you have no idea what each subscription does!
After a while, your bank statement has payments to all sorts of companies many of which don’t use the same name in their payment references as the services you bought.
Not to mention the fact that some subscriptions are paid for on the company bank account, some from a debit card, some from a credit card and some are paid by employees and reimbursed through expenses.
Caxton services were developed with the mindset that minimising touchpoints wherever you can will lead to higher employee satisfaction. One platform, every payment means that you know where your money is being spent, with simple reporting and less risk of unused subscriptions continuing to impact your bottom line.
If you want to have a handle on your expenses, then yes, it does.
Each subscription might be tiny in the great scheme of things, some of them being less than £20 per month. But when you add them all up it ends up at hundreds or thousands of pounds annually.
Remember also that many subscriptions are priced per user, so the more users you add, the more expensive they get. Some have massive hikes when you breach a particular user number.
And thirdly, remember that many of these are sold on a Direct Debit or continuous payment authority. In effect, another business has direct access to your bank account and can take what they like.
The first thing to do is to review your bank and credit card statements. If you have monthly amounts leaving your account then you need to start taking action.
List all the regular payments and go through marking off what each item is for and who uses it.
Be aware that at this point you might not get all the answers you need. You may have subscriptions on there that nobody remembers setting up or people may even be embarrassed to admit they’re not using it anymore.
Next, go through and investigate what each unidentified payment is for. In some cases, this will be obvious, but in others, less so. Google can be your friend here. Search for the payment reference and you’ll probably be able to work out which company you are paying.
Investigate the use of the apps you are buying. Some apps will be used frequently while others less so. But don’t fall prey to the temptation to cancel things without letting potential users know – for example, there may be apps that will be used heavily at the end of financial year, and not at all for the rest of the year.
Once you have a list of apps that you think may not be adding enough value you can circulate a list to the business and ask people to let you know if any should be kept.
Make it clear that if nobody puts their hand up you will be removing the subscription. Put a date by each one to let them know the point at which they will become unusable.
As you go through this process you will produce two lists; one of apps that need switching off and one of things that need to be kept.
But there are a couple of further steps to take.
First, ask yourself whether the app you are considering is really needed, or whether there’s a different app that combines functions.
For example; Caxton can handle all of your outgoing payments, so instead of having an app for payroll, an app for accounts payable and an app for expenses, you can link all of these into one. This removes the need for several subscription costs, and for employees to learn several different apps – it’s all in one place.
An unexpected benefit is that you’ll also increase your cyber security.
Not sure how? By having fewer passwords to remember, your employees will be less likely to forget their logins or store their passwords in unsafe ways, meaning your information is safer.
When you start looking at slimming down your apps it can be tempting to start switching things off all over the place but doing this is bound to annoy people.
Take a measured approach and go through your subs methodically only removing access when you are sure it is safe to do so.
Look into which subscriptions can add greater value to your business, and will allow you to combine several key functions into one app.
Want to learn more about how Caxton can support all your payment needs in one simple, secure app? Our proprietary API allows you to combine not only all your existing payment needs, but also opens up new possibilities for automation. Contact us now for a no-obligation demonstration of how we can support your payment needs, now and in the future.
Caxton Payments is an alternative to traditional banks, established over 20 years, we help businesses make faster payments more reliably. We offer streamlined processes, automation through API and a collaborative solution to complex payment issues all from a single platform. Our payment capability extends from business expense management, to payroll payments, supplier payments, and currency risk management. We also offer personal prepaid travel cards and international money transfer.