Ask a small business owner what they spend on software each month and most cannot tell you within a few hundred dollars. Not because they are careless. Because the spend did not arrive as one decision. It arrived one seat, one tool, and one upgrade at a time, over years, and nobody was ever given the job of watching it.
The gap between what a business thinks it runs and what it actually runs is wide. Cledara's 2025 Software Spend Report, which draws on more than a million transactions from companies with fewer than 200 employees, found that businesses underestimate their own software usage by around 40 percent. For every ten tools a company believes it pays for, there are closer to fourteen.
Part of the reason is that buying software stopped being something only an IT function does. Gartner reported in 2022 that 41 percent of employees acquire or build technology outside of IT, and predicted the figure would reach 75 percent by 2027. In a small business with no IT function at all, that is closer to everyone, buying what they need on a company card and moving on.
Here is what a review usually turns up.
- Licenses nobody is using. A seat gets bought when someone joins and is rarely cancelled when they leave. Across the mid-sized companies tracked in Zylo's SaaS Management Index, only about half of paid software licenses are actually in use. Those are companies large enough to employ someone to watch this. A ten-person business has no such person.
- Two tools doing the same job. One person picked a project tracker, someone else picked a different one, and now the business pays for both. Overlapping apps and unused seats are the waste categories Cledara sees most often.
- A subscription for something you already own. The common one is paying separately for a feature that is included in the Microsoft 365 plan already on the bill: scheduling, e-signatures, simple forms, extra storage. Often it is already there, switched off.
- A plan tier nobody chose. The account started on a middle tier for a trial, or was upgraded once for a need that has passed, and it has renewed at that level ever since.
- Renewals that crept. A price that was fair three years ago has gone up quietly every year, and because the invoice looks familiar, nobody questions it.
- Charges on a personal card. A founder signs up for something early on and it bills their personal card for years. Individually expensed software is the fastest-growing category in Zylo's data, up 267 percent year over year, and it is the hardest to find, because it never appears on a company invoice at all.
Added up, this is not a rounding error. Cledara found that companies of 100 to 200 people waste roughly a third of their software budget, and larger companies closer to half. A smaller business is not exempt from this. It is more exposed, because there is nobody at all whose job is to notice.
Finding the waste is unglamorous work. It means going through every account, every invoice, and every admin console, and reconciling what is paid for against what is actually used and by whom. The output is not a headline percentage. It is a list, line by line: keep this, cancel this, downgrade this, consolidate these two, renegotiate this one, with a figure against each, so you can act on it the same week.
We do that review as a fixed piece of work, priced up front, and we do not take a share of what it saves. The saving is yours. If the review finds nothing worth changing, that is what the report says.
If nobody has looked at your software spend in a couple of years, the research is fairly clear about what is sitting in it.