Cloud-based software has transformed the way businesses operate. From accounting platforms and project management tools to AI assistants and design software, businesses of all sizes now rely on subscription-based applications to improve productivity and collaboration.

However, this convenience comes with a hidden cost. Many businesses are unknowingly paying for software they no longer use, a growing issue commonly known as “SaaS creep.” Over time, these forgotten or underutilised subscriptions can quietly drain thousands from a company’s budget.

What is SaaS creep?

SaaS, or Software as a Service, refers to software that is accessed online through recurring monthly or annual subscriptions instead of a once-off purchase.

SaaS creep occurs when these subscriptions accumulate over time without proper oversight. New tools are added, old ones are forgotten, employees come and go, and automatic renewals continue in the background. Before long, businesses are paying for licences that are rarely, if ever, being used.

Because most subscriptions renew automatically, unnecessary expenses often go unnoticed for months or even years.

The hidden cost of unused software

Recent research highlights just how significant this problem has become.

According to the Zylo 2026 SaaS Management Index, the average large organisation manages more than 300 software applications, with almost half of all licences sitting unused at any given time. This translates into millions of dollars in unnecessary annual spending.

While these figures relate to large organisations, small and medium-sized businesses are far from immune. Estimates suggest that the average UK SME could be wasting the equivalent of around R250,000 each year on software subscriptions that deliver little or no value.

The issue is rarely the result of reckless spending. Instead, it develops gradually as businesses adopt new technology without regularly reviewing what they already have.

Why does SaaS creep happen?

In many businesses, software purchasing is no longer handled by a single department.

Marketing teams subscribe to design platforms, sales teams adopt customer relationship management tools, operations implement workflow software, and individual employees sign up for productivity or AI applications using company expense accounts.

Each purchase may solve a genuine business need at the time. The challenge arises when no one maintains a complete overview of every active subscription across the organisation.

Without central oversight, duplicate software, forgotten licences and unnecessary renewals become increasingly common.

Automatic renewals make the problem worse

Most software providers rely on automatic renewals as part of their business model.

Unless a subscription is cancelled before its renewal date, payment is processed automatically, regardless of whether the software is still being used. Vendors are under no obligation to notify customers that licences are inactive or underutilised.

As a result, businesses often continue paying for software long after it has stopped providing value.

How can your business stay in control?

The first step is gaining complete visibility over your software subscriptions.

Create a comprehensive list of every subscription your business pays for, including the monthly or annual cost, who authorised it, who uses it and when it renews. This makes it much easier to identify duplicate services or subscriptions that are no longer needed.

Assigning responsibility is equally important. Having one person or department oversee software purchases helps prevent unnecessary duplication and ensures every new subscription has a clear business purpose.

Regular subscription reviews should also become part of your financial management process. Reviewing software usage every few months allows you to cancel licences that are no longer required before they automatically renew.

Employee onboarding and offboarding processes should include software access as well. This helps ensure licences are reassigned or cancelled when staff members leave, preventing unnecessary costs from continuing in the background.

How we can help

Many businesses are surprised when they discover just how many recurring software payments appear on their bank statements each month.

As your trusted accounting partner, we can help you review your business expenses, identify recurring software subscriptions and determine whether they are still delivering value. A subscription audit can uncover unnecessary costs and help improve cash flow without affecting day-to-day operations.

The bottom line

SaaS creep isn’t simply a technology issue, it’s a financial management issue.

While subscription software offers flexibility and convenience, it also requires regular oversight. Treating software subscriptions like any other business expense, reviewing them regularly and assigning clear ownership can help prevent unnecessary spending and keep your operating costs under control.

Taking the time to evaluate your software portfolio today could save your business thousands in unnecessary subscription costs tomorrow.