It's late October and an email arrives from Finance: "Please send next year's IT budget by next week." You open last year's file and the software line says only "+10% year over year." Then the questions start. How many design-tool seats did we buy, and how many people actually use them? Were the accounts of the three people who left last month cleaned up? How many SaaS tools are teams paying for on their own corporate cards? 🤔

Once a software budget is set, it runs unchanged for a full year. That makes the two to three weeks before budgeting the best time to cut waste. This post is a step-by-step checklist for IT teams to work through before drafting next year's budget.

Step 1: 🧾 Pull scattered purchases into one list

The starting point is a complete list of every piece of software the company pays for. In most companies, the problem starts because that list doesn't exist in one place.

• Ledger and corporate card statements: Pull every software, cloud and subscription charge from the last 12 months. Don't miss foreign-currency payments or small recurring charges.
• Contracts and quotes: Mark annual contracts separately from perpetual licenses and maintenance agreements.
• Team-level purchases: Ask team leads directly about SaaS that marketing, design or engineering pay for themselves.

For each item, record at least product, license type (subscription/perpetual), quantity, billing cycle, renewal date, owning department and admin account. Those seven columns alone answer half the questions you'll get in the budget meeting. 💡

Step 2: ⚖️ Compare what you bought with what you use

With purchase quantities in hand, match them against actual usage. Three patterns usually show up.

💤 Installed but unused licenses

Software installed on PCs with no launches for months. You can't find these by checking installs alone; you need run time and last-used date.

👻 Orphaned accounts

SaaS accounts still assigned to people who have left, are on leave or changed teams. Put the HR roster next to the account list and they stand out immediately.

🔁 Overlapping tools

Different teams using different products for video calls, shared docs or design. Consolidating cuts seats and gives you negotiating leverage.

Criteria vary by company, but setting one rule, for example "no launches in the last 90 days", and flagging those licenses as reclaim candidates speeds up every later discussion.

Step 3: 📅 Build a renewal calendar

Many SaaS contracts auto-renew by default. If you only notice after the renewal date, you may be paying for another full year. 😱

1. Move the renewal dates from Step 1 onto a monthly calendar.
2. Check each contract for the cancellation notice period (e.g., written notice 30 days before renewal) and note it alongside.
3. Set a reminder 60 days before each renewal to review usage and decide whether to adjust seats, cancel or renegotiate.
4. If renewals cluster in the first half of next year, agree with Finance on which quarter those amounts land in.

Step 4: 💰 Draft the budget with next year's demand

Add next year's plans to the cleaned-up picture and you have a budget backed by evidence.

• Headcount plan: Recalculate required seats based on expected hires and departures.
• Reassign reclaimed seats: Give unused licenses found in Step 2 to new hires first to reduce new purchases.
• New tool candidates: For new subscriptions such as AI tools, note the trial period and evaluation criteria.
• Price changes: Flag vendor price-increase notices and the share of foreign-currency payments exposed to exchange rates.

A budget that shows "quantity × unit price per product, and seats reduced through reclaiming" is far more persuasive than "X% over last year."

Step 5: 🔄 Make it visible all year, not once a year

A spreadsheet cleaned up once drifts out of date within three months. People join and leave, and teams sign up for new tools. So the last step is building a setup where the picture updates itself.

With SELLEASE IT Asset Management, an agent installed on each PC collects installed software and run time, so you can compare what you bought with what you use on one screen. On the software detail page, members who have left (been deleted) are marked with an icon, so reclaim targets are easy to spot. The Cost optimization view on the Licenses page shows licenses unused in the last 30 days and the annual savings per product. Managing physical assets such as laptops and monitors in the same ledger lets you review hardware and software budgets together.

To learn more about where software spend leaks, see The hidden cost of software: what's draining your budget. 👀

✅ Final checklist before the budget meeting

• □ Collected all software and SaaS charges from the last 12 months
• □ Listed quantity, renewal date, owning department and admin account per product
• □ Set an unused-license rule and flagged reclaim candidates
• □ Cross-checked accounts of departed and on-leave staff against the HR roster
• □ Identified overlapping tools and reviewed consolidation
• □ Added renewal dates and cancellation deadlines to the calendar
• □ Reflected next year's headcount plan and new tool candidates

💬 Frequently asked questions

How often should we review SaaS?

A full review once a year before budgeting is the baseline, plus an individual check 60 days before each product's renewal. If usage data is collected automatically, a short quarterly look is enough.

Won't employees push back if we reclaim unused licenses?

Ask the user first whether they still need it, and explain how to request it again. Announcing the rule in advance (e.g., 90 days unused) also reduces friction.

Do perpetual licenses need review too?

Yes. Perpetual licenses may look free after purchase, but maintenance contracts often renew every year, and installs exceeding owned seats can create license compliance issues. Check owned seats and installs together.

🌱 Start next year's software budget with numbers you can back up

Run this year's review in SELLEASE instead of a spreadsheet. Get started with SELLEASE for free 🚀