Start with the billing data
Pull every SaaS expense from the last 12 months. Payment provider exports, credit card statements, and AP records will give you the list. Sort by vendor and annualize. At a $5M company it is common to find $80K to $150K in tools, half of which are underused or duplicative. This is where the waste hides.
Before pulling vendor data, set an objective. Are you trying to reduce spend, reduce tool sprawl, or improve data flow? These lead to different answers. Spend reduction focuses on seat counts and duplicates. Sprawl reduction focuses on tool count and adoption. Data flow focuses on integrations and system of record. Doing all three at once is a 6-month project. Doing one at a time is a quarterly process.
Export 12 months because seasonality is real. Some tools spike at year-end (tax, finance close tools). Some spike at renewal cycles (CRM add-ons). Some have hidden annual true-ups. Looking at just the last three months will miss an annual contract that just renewed for $40K. The full 12-month view catches these.
Renewal timing dominates this exercise. Annual contracts lock in spend for the next year, so catching duplicates before renewal saves the whole year. Monthly subscriptions can be cut any time. Build a calendar of renewal dates and start the audit on tools with renewals in the next 60 days. This turns the audit from an academic exercise into a concrete savings calendar.
Map tools to workflows
Group the tools by what they do, not by what they are sold as. You may have three tools that do project tracking, two that do customer messaging, and nobody knows which is the system of record. Where multiple tools do the same thing, pick one. Where a workflow is split across tools because of bad integration, fix the integration or consolidate.
A simple grouping that works for most companies: Finance & Accounting, People & HR, Customer Tools, Engineering & Product, Data & Analytics, Security & IT, Marketing & Sales. Within each group, list the tools and what they do. The duplicates usually jump out. "We have three tools tagged Customer Tools that all do messaging" is a common finding.
The system of record question is the most important one in this exercise. For every key entity - customer, employee, transaction, lead - there should be one system that is the source of truth. If sales thinks the CRM is the source of truth for customers and finance thinks the billing system is, you have a reconciliation problem that will surface every month-end. Fix the source of truth before worrying about integrations.
Do not forget the free tiers that turned into paid tiers. Many tools start free with limited users, then someone upgrades to paid during a push, and it never gets downgraded. These are often the longest-standing overcharges. A tool that costs $40/month but is only used by two people for something trivial is worth cancelling or downgrading immediately.
Identify the unused seats
Most SaaS tools charge per seat. Pull active user reports. If a tool has 40 seats and 12 active users, you have a 70% waste rate. Either reduce the seat count at renewal or cancel outright. Annual billing makes this harder to spot, so audit at the annual renewal cadence, not the monthly one.
The 70% unused seat rule is common in tools that were rolled out enthusiastically and then quietly abandoned. New onboarding tools, engineering tools bought for a project that ended, marketing tools that nobody learned. These are the easiest wins because removing seats has no downside. Some vendors make seat reduction surprisingly hard - you have to call, email the CSM, jump through hoops. Do it anyway. Build this into the renewal process.
Also look at admin seats specifically. Some tools charge the same for admin and regular seats, some charge more. If five people have admin access to a tool that two people actively administer, you are paying a premium for permissions nobody uses. Downgrade the three to regular seats at renewal.
Ownership is the other hidden issue. If no single person owns the decision to keep or cancel a tool, the default is to renew. Assign an owner for every tool. That person is accountable for the annual keep-or-cut decision. This is boring governance work, but it is the reason some companies have tight stacks and others have bloat.
Before cancelling, check the integrations
The tool that looks useless may be the one feeding data to the one that matters. Before you cancel, map the integration chain. A cancellation that breaks your revenue reporting or finance automation is not a savings - it is a self-inflicted cleanup project. Cancel in the right order, or not at all.
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Integration mapping is where this exercise goes from tactical to strategic. Draw the data flow: where do leads come from, where do they end up, who has them at each stage. You will usually find two or three points where data gets copied manually because the integration was never built. Those are either opportunities for automation or candidates for tool consolidation.
A warning: do not cancel a tool just because nobody logs in. Sometimes the tool is running in the background, providing data via integration, and never needs a UI. The CEO might never open the BI tool, but every dashboard they look at might be powered by it. Before cancelling, check usage data from the tool, check integration logs, and ask the technical team. A cancellation that breaks a dashboard or reporting pipeline is a much bigger cleanup than the monthly savings justifies.
Audit the alerts as much as the tools. Every tool with monitoring or alerting sends emails. When those alerts go to a shared inbox that nobody reads, the signal is lost. If a tool has alerting but nobody is configured to receive or act on it, the tool is not actually providing the value you are paying for. Either fix the alerting workflow or accept that the tool is underused.
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