Running a startup finance team is a notoriously busy role.
So we jumped at the chance to talk to Rob Collings about how he manages SaaS subscriptions at Fintech innovator, Flux.
Let's get straight to it!
Hey Rob, how easy do you find it to manage your SaaS subscriptions?
It can be pretty tricky, especially if there is no formal process for setting them up. We often have subscription payments going out of the bank which have very little detail, and it then becomes a task to work out who owns the subscription and if they still use it.
In an ideal world, our employees will set up the subscription on their own expense card [we use Pleo] because if they leave, we can just cancel their card which will end the subscription. But that then causes problems when there are multiple users of the subscription!
Do you have a formal SaaS purchase and management process? Is it working well?
We don't have a formal one, although our employees will typically let me know if they want to sign up to a new subscription. As I review the monthly management accounts, I have a good idea of what we pay for regularly so if it's a name I recognize, I'll let them know. Otherwise, they'll just go ahead and set up the subscription on their card.
How do you ensure you’re buying SaaS that adds business value?
Flux people are pretty good at only signing up for subscriptions they need. We're transparent about runway so people know that signing up for a subscription will impact runway, even if it's only a small impact.
The trouble comes when the subscriber decides the subscription doesn't deliver value – they won't always remember to cancel it and it could be a few months before I question it or they remember to cancel.
How do you push back on requests? Do you often have to cancel subscriptions – if so, why?
I generally don't push back on new requests because I trust people to buy what they need.
In terms of canceling subscriptions, I will review them every few months (quarterly to half yearly) and ask people to vouch for their subscription. If no one vouches for it, we then need to work out who's paying for it and how to cancel it.
We are currently paying a small subscription that we've been paying for years and no one is using it...but no one knows how to cancel it!
That can be a faff though – we are currently paying a small subscription that we've been paying for years and no one is using it...but no one knows how to cancel it! The only way we can do it is by canceling our main bank card, which isn't ideal because it cancels everything else.
Does chasing teams to understand SaaS subscriptions waste your time?
I wouldn’t say it wastes my time right now as it's so infrequent, but it's certainly a mentally draining task which isn't at the top of my priorities list as the only finance person in the company!
It usually involves a few spreadsheets and lots of slack messages which is quite time consuming. That’s time that could be spent on more important tasks like strategic work.
However, there does come a time when it needs to be done. It usually involves a few spreadsheets and lots of slack messages which is quite time consuming. That’s time that could be spent on more important tasks like strategic work (and tweeting of course!).
How many SaaS subscriptions does your company have (that you’re aware of)? Is it easy to maintain visibility and control?
I’m not sure off the top of my head, but maybe around 30 - 35. They're at the level right now where it's not unmanageable and if subscriptions continue unused for a few months, it doesn't cause too much of a problem.
I imagine this being a bigger problem as we continue to scale though – we'll need a better approval and management process to ensure we're not leaking cash into unused subscriptions.
I imagine this being a bigger problem as we continue to scale though – we'll need a better approval and management process to ensure we're not leaking cash into unused subscriptions.
What’s your biggest frustration with SaaS as you scale?
I think my biggest personal frustration is when we're paying for something that we no longer use. It pains me as an accountant to know we're wasting money on a subscription, but sometimes the time it takes to work out how to cancel it isn't worth the cost of the subscription (it can wait until a less busy time, if that time ever comes!).
My biggest personal frustration is when we're paying for something that we no longer use. It pains me as an accountant to know we're wasting money on a subscription.
Another frustration is when the vendor just sends us a payment confirmation, or sends us both a payment confirmation and invoice. The former is annoying because we need an invoice for VAT purposes, and the latter is annoying because we'll end up with two documents going into our approval system, risking the duplication of transactions in Xero if not properly managed.
What do you think the main benefits would be of having one centralized system for the purchase and management of all company wide SaaS subscriptions tools?
I would describe our subscriptions payments as a small fire in the corner – I know it's there, but it's small enough for me to just keep an eye on whilst I focus on the bigger fires. But there is always the risk that the fire gets out of control when I'm not looking, so I think having a system to manage subscriptions would give me more comfort that that fire isn't about to explode.
The ability to cancel a subscription without impacting everything else and without having to find out who has the login would be ideal too!
It would also be useful to know how much money we're spending in total at certain suppliers – for example, we pay a lot of individual linkedin subscriptions across multiple payment cards, but I can't easily tell how much we spend there in total without taking some time to work it out.
The ability to cancel a subscription without impacting everything else and without having to find out who has the login would be ideal too!
Rob, thanks so much for your time.
To get more data and insights on how finance and IT leaders manage SaaS processes, costs and culture, download our new State of SaaS report here.
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