Slack, Intercom, Zapier, Amazon Web Services, Zendesk, Mixpanel - SaaS tools have improved the lives of so many startup founders and executives! What used to take time and lots of money to implement can now be done easily via a web connection.
But as the need for new tools emerges, a startup’s SaaS stack can quickly become unmanageable - especially as your team grows. Being able to clearly manage this array of subscriptions has become a real nightmare for finance teams and founders. How can you pull yourself out of this tricky situation? We’ll tell you all about it…
Being a SaaS collector is a costly addiction 🎰
The abundance of good SaaS tools these days is definitely a plus. But the downside of having so many great options is that you actually have to pay for all of them.
And forget about their cost for a moment. There's also a serious administrative burden that comes with managing so many payments.
Here at Spendesk, we have more than 50 paid SaaS tools running - not to mention all the free trials! So we have a good understanding of what it feels like to be buried under all those email notifications, credit card changes, and invoicing issues.
Any business with a stack like ours has already run into one or more of the following issues:
- It’s always a hassle to get hold of your company credit card when you need to pay for a new subscription. Who knows when it was used last, and where it may have ended up now?
And if you're an everyday employee, do you really want the pressure of making a mistake, using the card on a dubious payment page, or losing the card altogether?
- Your accountant or finance team is going nuts every month trying to track down all those recurring expenses. Slack messages and emails get sent out left and right asking "please can you send me the invoice for [SaaS tool]?"
- You’ve probably heard Tom from the Marketing team saying with great outrage (only a slight exaggeration) ‘No way! We’ve been using both Mixpanel and Kissmetrics all that time? But it’s the same thing! We should have optimised all of this!”
- Or when Lisa almost had a panic attack after receiving an umpteenth reminder coming from the accountant: she had forgotten to provide most of her receipts for the past 3 months. Well, in fact, she has lost half of them…but don’t tell the accountant
- Do you remember that time the company credit card couldn’t be found while you needed to start a trial for the latest “Ninja Growth Hacking SaaS?” Rick went on holidays for one week in beautiful Australia and unintentionally took the card.
Your meltdown became legend in the office...
- Or what about when the card actually got lost? It happens to the best of us. The boss did the right thing and cancelled the card.
But that meant that every ongoing SaaS payment could no longer process. And your payment details had to be updated one-by-one.
- We must admit that it’s really generous of you to keep paying for Sam’s Linkedin Premium account. Especially since he left the company six months ago…
- Thinking of it, the greatest loss certainly happened the day you came back from your awesome break, and realized you couldn’t access your sales pipeline. Your CRM’s payment method had expired 2 weeks ago and you didn’t notice.
We're sure that some of these stories sound familiar. Using the boss’ credit card might work out for a little while, but then when things become serious it turns out to be a real mess.
Not to worry! We found the right solution for you… I mean we actually built it!
Further reading for startups!
- A CEO's guide to startup expense management
- How to allocate and manage your startup marketing budget
- Fundraising strategy: how to raise startup venture capital
Manage your recurring SaaS payments like a pro 💪
Properly handling payments involves two key elements:
- Entering your card details and ensuring that payments will continue
- Tracking each payment as part of your expense management process
Every issue identified above basically fall into one of these two areas. So with a good strategy for each, we can say goodbye to all those problems.
Here's how to master each of these.
Use a better payment method
If your company is sticking with the corporate card, this next section is for you. We're pretty convinced that the company credit card is a bad idea. Too little flexibility, and too much risk of fraud.
For SaaS payments, you really want a virtual credit card. These let you enter your company card details on a website, except they're not actually your company card's details. They're unique.
This method has a few very clear advantages:
- There's no physical card to lose, or for Rick to take to Australia. Any team members who need access can have it, wherever they are.
- You can have different virtual cards for every payment.* So if one virtual card is compromised (or maxed out), you can simply cancel it and all the other payments go on unaffected. This also means that every virtual card can have a different max - the exact amount required for the payment in question.
- Different team members can have different levels of access. So managers might be given a monthly budget to spend as they like, whereas a new employee may have to request authorisation before making a payment. And this authorisation can be granted instantly online, so it's still better than going looking for the physical card.
- If your virtual cards are integrated with your expense management system, you also kill the issue of reconciling payments at the end of the month. We're about to go into this in detail.
*Note: Not every supplier lets you have multiple virtual cards. If you're currently with one of these providers, consider a switch!
In short, virtual cards are pretty much perfect for subscription payments. It's just a shame they didn't come around sooner!
Integrate your expense process from the start
We mentioned above those constantly Slack messages from the finance team: "Please send me the receipt for [SaaS tool]." This is annoying enough when it happens occasionally, but what if you have monthly recurring payments? And what if you manage 15 tools on that basis?
This is a bore for the average employee, but it's awful for the finance person. They have to do this for the whole company!
Except they don't have to. Since you're hooked on SaaS, it's worth knowing that there are tools to manage this part of the process too. Expense management software tracks every payment for you, so you know who in the company paid for what, when, and how they went about it. This is excellent when it comes to tax time, and a lifesaver during an audit!
What you want is a software that has the payment method built in. For SaaS subscriptions, that means a tool that gives you virtual cards, and then tracks every payment made.
The best tool to manage subscription payments
Spendesk lets you easily manage and pay for all your subscriptions. Here's the process in a nice little infographic:
With a simple click, a teammate can make an online subscription request in Spendesk, fill in the supplier name, and ask for a slice of the monthly budget. This request requires a manager’s approval to be validated, if you want approval to be mandatory. Once approved, the team member can access a virtual prepaid card to proceed with the purchase.
A unique prepaid virtual card is issued for each subscription, giving you optimal control over your recurring payments.
And attaching invoices is even easier. Once you've paid, your new subscription will issue an invoice by email. Just forward this to your Spendesk account email, and our AI will match it to the payment.
In a nutshell, Spendesk makes it easy to manage ALL your SaaS subscriptions by giving you more flexibility on one hand, and more control on the other. Our solution enables you to:
- Monitor recurring payments in real-time. There’s no surprise anymore as you are in total control of your spending!
- Set a monthly budget on each prepaid card according to your spending needs for a specific supplier. We prevent any SaaS from taking extra money on your subscription card! You can easily modify your monthly budget and adapt it accordingly, giving you greater flexibility.
- Put on hold all or one of your subscriptions, directly from your Spendesk interface. You can deactivate or reactivate a card in a single click, very handy to make sure you won’t be charged if you don’t want to.
- Collaborate smoothly with your colleague. you know exactly who’s in charge of which tool and you're able to change a subscription’s owner at your convenience!
- Make your accountant smile since you won’t have any missing invoices or lost receipts. They'll also save hours on bookkeeping since we integrate with your favourite accounting software.
Still not convinced? Well, for dinosaurs there’s always going to be good old Excel…
NOTE: This post was originally published on August 10, 2017. It has been updated with new information.