Software solutions are the epicenter of modern businesses. You rely on them for a host of tasks, ranging from simple accounting processes to more complicated CRM. As a result, it’s not overly surprising to discover that companies spend an average of $121,336 to $251,119 on software solutions annually.
The lower end of that scale is for smaller companies with up to 20 employees, while the higher end is for bigger businesses with between 100-200 employees. In either case it demonstrates just how costly business software can be.
Many of you are probably wondering whether or not this is an issue. After all, software purchases can be written off as a business expense on your tax returns every year. That’s all well and good, but you’re still spending this money and it’s interrupting your cash flow management. You can’t let software push you into a negative cash flow because it costs so much to manage and maintain.
You can make business software more affordable and budget-friendly – and here’s what you need to do.
Establish Your Software Needs
To begin, you need to understand that the right software can save you time and money, but the wrong software does the opposite. There is zero point in paying money for business software solutions unless you genuinely need them and their features.
Companies are guilty of making this costly mistake all the time. They see other businesses using a suite of software solutions and assume they need to follow the trend. This results in them only using one or two software platforms while five or six sit there collecting virtual dust.
You must establish your software needs before you buy anything.
Learn exactly what your business requires from a software perspective to avoid paying for things that won’t help you. It’s probably worth working with a business consultant to help you understand all of this. They can look at your company and determine what makes sense for you – and more crucially – what doesn’t.
Combine Solutions Into One Software Package
After knowing what software solutions make the most sense for your business, the temptation is to go ahead and buy multiple packages. This may be necessary in some instances, though you almost always find one software solution that combines multiple functions.
NetSuite is the perfect example of this: you can do accounting & finance, CRM, inventory management, and many other things in one place. It’s often far more affordable to get a package like this instead of spending money on numerous separate software solutions.
The fewer packages you have, the easier it is to manage bills. You’ll have one chunk of money leaving at the same time every month, rather than looking out for four or five software subscriptions. It’ll also be more affordable overall because you’re not paying for multiple initial purchase fees. Some software providers charge you a fee at the beginning as a “sign-up” or “set-up” fee. It’s a one-off, but if you have 6 different solutions, that’s 6 separate fees.
Get The Most Out Of Your Business Software
Making software more affordable isn’t just about keeping the initial and repeat costs as low as possible. It’s also to do with how much you get out of the software itself. Good software utilization will help you make more money because you’re getting so much out of the various features.
It’s okay to get help with this. If you use NetSuite, invest in a NetSuite partner who’ll help you learn all about the platform and how to maximize every single feature. You start seeing more benefits from using this software solution, which translates to a better return on your investment.
Once you understand how to get the most out of business software, you can keep these skills for life. It makes it a darn sight more affordable and cost-effective than paying for something and not using it to your full advantage.
Use Free Trials To Avoid Bad Purchases
Buying software for your business is a risk in the sense that you might not agree with the software you choose. Let’s say you pick Workday because you’ve seen the ads and it has generally favorable reviews. Big companies use it, so it must be good, right?
You download it and set things up, but just can’t get to grips with the system. Even after getting help from a consultant, you still don’t like how the software works. You’re now left with two options:
- Plug away and make the best out of a bad situation
- Cancel your membership and buy different software
Both ideas are likely to lose money, but what if you did something very simple to avoid being put in this situation to begin with? Look out for free trials that let you test a software solution before you spend real money. These free trials won’t always give you access to the entire fleet of features, but they at least help you use the system and decide if it works for your business.
Maybe you discover that this software solution isn’t right for you. That’s totally fine because you’ve not spent any money. Use free trials to your advantage and then settle on the software solutions that work the best.
Consider Downsizing Your Staff
You’ll remember that statistic from the start of this article about the average spend on business software. Well, it reveals that one easy way to spend less money on software solutions is to downsize your staff.
Smaller companies will have smaller software demands than bigger ones, which usually means you can afford cheaper price plans. You won’t have to pick the most expensive price plan that allows hundreds of users. Downsizing to a smaller employee base means you can save hundreds of thousands per year.
This obviously comes with a drawback: you lose a lot of employees. It’s not something you should take lightly, but it’s worth assessing your business and discussing if you genuinely need as many staff members as you’ve currently got. \
The final verdict on things is this: business software will always cost a lot of money, but you can take steps to reduce the financial burden on your company. Follow some of the ideas in this article to get back on track and avoid a negative cash flow due to expensive software subscriptions.
