Monthly subscriptions are a great option when you’re trying a new service, or you can’t afford to pay for an entire year upfront – but they can end up being a curse if you don’t stay on top of them! Many of us sign up for monthly subscriptions that we don’t actually need, then we forget to cancel and end up paying fees month after month after month.
So what’s the best way to manage those subscription fees?
List every single subscription you have
Analyze all your billing statements to determine what subscriptions you have – and then make an actual list. It’s easy for us to assume we don’t have very many, but when you see them all laid out for you, you’re likely going to realize you have more than you realize.
While I typically focus on business-only expenses, it’s a good idea to include ALL subscriptions. Yes, even your Netflix and Hulu subscriptions! Here’s a typical list I see from my clients:
- Accounting software
- Gym membership
- Business organizations
- Cleaning service
- Web hosting
- Domain purchases
- CRM software
- Music subscription
- Video subscription
- And so on
It’s easy to see how these can add up to a large portion of your business (and personal) expenses! Once you have everything listed out, it’s time to ask yourself:
Are you still using them?
Do you truly need all those subscriptions? Sure, some of them are non-negotiable. After all, you do need an accounting software, web hosting, domains, and those kinds of expenses. But how often do you use those video/music subscriptions? Do you really go to the gym? Are you an active member of that business organization still?
Seriously consider how important these subscriptions are to your business and your everyday life. If you can do without them, cancel them right away. If not, move on to the next step.
Could you pay annually instead?
For those subscriptions that you use regularly, consider switching to annual billing. Most providers offer a substantial discount for annual billing instead of monthly, so making the switch could save you thousands. However, only make that switch if it’s something that you’ll continue to use. Most services don’t offer a refund for the annual rate, so you’re locked in for the entire year.
Keep in mind that making the switch from monthly to annual means that you’ll be facing a bigger lump sum payment every year. If your business tends to have cash flow issues, make sure that you aren’t signing up for all the subscriptions in one month. Upgrade one subscription this month, another next, and so on. Again, only make the leap to annual if you know you’ll use it AND if it will save you money. Otherwise, leave it monthly so you can cancel at any time.
Repeat every quarter
This isn’t a one-time-only project. Every quarter, take some time to do this all over again, because you know you’re adding subscriptions along the way. Knowing where your money is going is so important, so staying on top of your subscriptions is going to be an excellent way to help you stay on top of your expenses.
Deb Howard Greenleaf, EA, CEO and Principal, of Greenleaf Accounting Services provides virtual accounting and bookkeeping services and specializes in financial management to consultants, coaches, solo professionals, and other small business owners across the US. Deb is an Enrolled Agent (EA)—an IRS-licensed tax professional—and specializes in small businesses and entrepreneurs filing Schedule C or as an LLC. As an Advanced Certified QuickBooks ProAdvisor, Deb spends her day in QuickBooks Online and specializes in providing QBO support.