How To Do a Software Audit & Find Free Money

At the beginning of every year, we’re inundated with everyone telling us about their previous year, what they did, how it went, what their goals are for next year. You might even be working on your own annual review.

Reviewing what you did in the past is a great learning tool. While these kinds of reviews are admirable (and every once in a while, they’re actually interesting), doing one isn’t likely to make you money. You might learn why you did or didn’t hit your goals this past year. That’s good information for the year ahead. And might indirectly lead to you making more money this year. But it’s probably not going to happen right this second.

An annual review of your software stack, however, is different. Because a software audit is one way, completely within your control, to immediately increase your profitability.

What’s a Software Stack?

Your software and apps all work together, as an ecosystem. This ecosystem is often referred to as a software “stack.”

I love the term “stack,” because it creates this visual picture of all your tools working cohesively together, one on top of the other, which is how it should be.

Software Stack Example.png

They should work together, but you probably didn’t choose them together - and that’s where the issues normally happen.

How did you end up with your current stack?

When you started out in business, the software tools you used were probably pretty straightforward. You picked a few tools that did most of what you needed them to do and they were fine for a while. GSuite + Asana + Calendly got the job done.

Unfortunately for most entrepreneurs, they hit a point where that just doesn’t cut it anymore. But, instead of doing a wholesale replacement, you just tack on some other tools that put a bandaid on the issue and move along.

  • Need email marketing? Tack on MailChimp
  • Proposal software? Tack on Qwilr
  • Accounting? Tack on Xero

Maybe you connect them all -- but, more likely, they’re all just out there, operating on their own.

Eventually, you end up with a fairly complicated system with 42 different software tools running and you’re afraid to touch any of them for fear that EVERYTHING will come crashing down around your ears.

Understandable, but… it’s costing you money.

Your Stack Is All ONE System

When you choose your software tools one at a time, only considering the problem you have RIGHT NOW, instead of looking at your stack AS A WHOLE, there’s a high probability that problems you have in one area will just crop up somewhere else in your system later on. Like playing an endless game of Whack-A-Mole.

Say you pick Bench for your accounting software, it seems easy on the surface -- you’ve got some bookkeepers out there, doing your bookkeeping -- great. But, Bench doesn’t have invoicing, and it doesn’t integrate with the rest of your system. Which means, you’re probably also running something like Freshbooks, so you can send invoices. And you’re stuck in this cycle of wanting to automate a bunch of your back office functions, but you can’t (because Bench doesn’t integrate with the rest of your software tools).

The only real way to fix that is to look at your stack all together and evaluate the entire ecosystem as one-- and that’s where the audit comes in.

What is a Software Audit?

You know the KonMari method for tidying up all of your stuff? Well, a software audit is the same idea but for your digital “stuff” - your software “stack” - instead of your clothes.

  1. Make a list of ALL the software you’re currently paying for or using -- including the free stuff.  
  2. Then, divide them by functionality -- what do they do for your business? Scheduling, project management, live chat -- what are you using each of these things for?  
  3. Make note of how critical this tool/functionality is to your business. Can you do without it? Or is it a critical part of making your business run?
  4. Next, you’ll “touch” each tool and evaluate whether or not it “sparks joy”. Do you love it? Hate it? Meh?  
  5. Get rid of anything that’s easy - tools you pay for and don’t use at all, or ones where the functionality can be replaced by something else you’re already using.
  6. Take a look at what you have left and evaluate whether or not it should stay a part of your business going forward.

Why Bother To Do A Software Audit?

Your business is constantly changing, - growing, shrinking, and changing focus. The same systems that worked for you when you were starting out probably won’t work for you with a team of 10. Continually reviewing will make sure that your software tools always fit where your business is NOW.

A software audit is an opportunity to have a real look at where you are today -- to see if what you’re using is still working for where your business is now, instead of where it was three years ago.

Even if you decide to stick with the software tools you’ve got, an audit is a great opportunity to eliminate any unnecessary tools clogging up your system and see if there might be some opportunities to simplify.

Simplify Your Stack

An audit is an opportunity to simplify your stack -- to get rid of any tools you don’t use or ones that could be easily replaced by something else you’re already using.

  • A stack with fewer tools is WAY easier to maintain -- and you don’t have to worry that touching it or changing something will break the whole damn thing.
  • You save time when you’re working because you don’t have to constantly be switching from one app to another to get the job done.
  • Save money -- fewer apps and tools usually means you pay less.

Save Money

Doing a software review is like finding $20 in the pocket of a jacket you haven’t worn in a year. It’s free money.

It’s hard to inch your profitability up by selling more, but easy to increase your profit by cutting your costs. Costs are one of the few things in your business that are entirely within your control - and software subscriptions (especially software that doesn’t work for you or that you’re not using) are low hanging fruit.

For any modern business, software fees are a hefty chunk of your costs. For a brick and mortar business, rent might be your biggest expense, but your point-of-sale software is going to be a close second. For online or remote companies, software is probably your highest cost outside of salaries.

Taking a look at what you’re paying for will probably bring up at least a few tools that you’re paying for (or you bought the annual subscription for last Black Friday) and completely forgot about.

And paying for software you’re not using is basically doing this with your hard-earned money...

Cancel the stuff you’re not using and you instantly increase your profitability.

How to do a Software Audit

I’m going to give you 2 different ways to do a software audit - you can choose which one you use based on how much time you want to devote to this.

And, you can always do a fast & simple audit now, and come back later for the full audit. This should actually be a continual process. That’s why I recommend you do this every year.

Fast & Simple

Print out a report from your accounting system that shows ALL your software charges from last year. I recommend doing a full year because often you’ll pay for subscriptions annually, and then forget about them. Running a report for a full year will capture everything.

Run down the list and make sure that there’s nothing missing - sometimes software charges will end up being recorded to several different accounts in your accounting system, so have a quick look and make sure nothing’s missing. (Pro Tip: If you aren’t already recording all your software services to a single account in your accounting system, start doing it for this year. It’ll make it MUCH easier to do this next year.)

Look at the list a second time, and scan for any software you’re paying for and don’t use anymore.

Go cancel those.

This shouldn’t take you more than about 15 minutes. You’re grabbing the easiest, low-hanging fruit, saving some money, getting rid of software that’s not serving you anymore and moving on.

Do the math on how much you saved with your cancellations… that’s all pure profit.


Do the Fast & Simple option first. Now KonMari the shit out of your stack.

I’ve created a template in Airtable that you can use to help you organize your remaining list of software, calculate your costs and keep track of your changes.

Get the Template

Categorize First

Go through your list of software and identify what you’re using each tool for. This will allow you to compare groups of similar software together, which will make it way easier to figure out what to keep and what to replace later on.

I like to do this in 2 ways:

Operations Area- broad categories that talk about where or who in your business you use this particular tool. For example:

  • Client Management
  • Marketing/Sales (sometimes together, sometimes separate -- depends on how YOU approach this in your business)
  • Accounting
  • Employee Management
  • Communication

Functionality - these categories should address what this tool does for you. Things like:

  • Scheduling
  • Proposals or contracts
  • Project management
  • CRM
  • Forms
  • Email Marketing
  • Chat
  • Landing Pages

Find the Love

Then go through your list of the software that’s left and categorize them into LOVE, HATE, NEUTRAL.

  • LOVE - tools that you adore, that work just the way you want them to. Channel your inner Marie Kondo here - what software sparks joy for you? Makes your life SO much easier?
  • HATE - tools that are ALWAYS driving you nuts. They’re down all the time, or constantly buggy, or you’ve just never managed to make it work properly. They don’t integrate properly or even at all with your favorites and you’re only using them because you got a discount on someone’s affiliate code.
  • NEUTRAL - they do the job, aren’t particularly offensive, don’t cause issues or you just don’t care enough about this part of your operations to have an opinion.

We’re not eliminating anything just yet -- just getting a benchmark on what tools might be ripe for potential replacement later.

Review Functionality

Since you signed up for most of your software tools, they’ve changed. They’ve added features and functionality - as you’ve grown, so have they. So, before you start evaluating what to actually do with the software that’s still on your list, you need to figure out two things:

  1. What functionality do you actually need?
  2. What functionality do the tools you LOVE already have that you can take advantage of?

Start by looking at the list of software categories (both operational area and functionality) that’s on your list. Get familiar with it and look at what functionality you actually need to keep in your system (and what you might be able to get rid of).

Then, familiarize yourself with the current functionality of the tools you LOVE. You want to build your stack around these as much as possible (because you already know and love them), so if they’ve added features since you started with them, maybe you can get rid of a few of those HATE tools by replacing them with functionality from tools you already love.

(Pro Tip #1: Best places to check out their current functionality is their marketing website/pricing pages and a public roadmap, if they have one. The roadmap will usually tell you what they’ve released recently and what they’ve got planned in the future)

(Pro Tip #2: Subscribe to their updates/blogs/emails -- they’ll alert you when they’ve got new features coming soon or just released)

Remove Duplicates

Now that you’ve figured out what functionality you NEED, it’s time to try to see if you can eliminate anything.

Since SaaS (software-as-a-service) tools are constantly adding functionality, there’s a good chance you’re probably paying for multiple tools that now do the same thing.

For Example:

  • You paid for Calendly way back when to schedule meetings. But now, you have Drift (which has that same function). Since Drift does meetings plus other stuff, you might be able to drop your Calendly account and replace that with Drift Meetings.
  • You’re paying for LeadPages, but your online course software actually has a landing page builder in it, so you can cancel LeadPages.  

Go back to your list of categorized tools -- is there functionality that’s duplicated? Could you eliminate some tools by using features of tools you already used?

Right Size Your Plan

Software companies are constantly testing their plans and pricing -- especially as they add new features.

Check out the current pricing plans for each software, and then check your usage of the tool.

  • Are you still on the best plan for you?
  • Should you upgrade to a new plan (that might allow you to completely remove another software tool)?
  • Should you downgrade (because you don’t have the volume you estimated or you don’t use the functions and could make do with a lower priced plan)?

Also, look at the number of users you have. Software services often charge per user - so look at who on your team has user accounts and whether or not they actually need that access (or ever use that tool in the first place). Remove any extra users to reduce your costs.

Assess What’s Left

Have a look back at your list. What tools are you left with?

Are they mostly LOVES? Great! Tally up your total savings, pat yourself on the back for having increased your profitability AND ensuring that the tools you use to run your business make you happy and productive.

Are they mostly HATES (or NEUTRALS that you just wish could be better)? Might be time to check out some new tools or look at a more extensive review or a system overhaul.

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