5 Common Myths About Software Spend (That Could Be Costing You Thousands)

Truly controlling software costs is harder than it looks.

Even in budget-conscious companies, SaaS spend keeps growing, fueled by automatic renewals, subscriptions purchased across teams, and invoices that slip through without centralized oversight.

This isn’t a software problem. It’s a governance problem.

Now that every department can purchase digital tools directly, managing software in the same way as ten years ago is no longer sustainable. 

Tools have multiplied, procurement has become decentralized, and what used to work now creates inefficiencies and hidden costs. Challenging a few widely held assumptions can help you regain control, free up resources, and get your full spend visibility back.

That’s why we’re breaking down five of the most common myths that stand in the way of a smarter, more strategic approach to managing software costs.

Myth #1 – “We only use a handful of tools, our spend is low, everything’s under control.”

It’s something you hear often, especially in smaller or fast-growing companies. The assumption is that if the spend stays within a certain threshold, it’s not worth worrying about. But that mindset can be risky.

When it comes to software, even a relatively small spend can hide significant waste. A subscription activated by one team and never cancelled, two tools doing the same job, an auto-renewal left running because “it doesn’t cost much.” 

These are all common scenarios, and when they add up, they create a real impact.

Multiple studies agree that companies waste up to 30% of their software spending. And it happens even in organizations that believe they have things under control. It's not unusual for the number of active tools to be double the estimate at the first proper audit. Some are unused. Others are still active without a clear owner.

The issue isn’t how much you’re spending today, it’s how much visibility you have. Even small budgets, if unmanaged, can become a steady source of inefficiency.

Myth #2 – “Software management belongs to IT”

This idea is still common: IT handles software, so Finance doesn’t need to get involved. In many companies, this has been the standard approach for years, and to some extent, it makes sense. After all, IT teams are the ones implementing tools, managing access, and ensuring security.

The problem arises when software is treated purely as a technical matter. IT may have the expertise to evaluate tools from a functional perspective, but they often lack visibility into budgets, recurring costs, ROI, or broader strategic considerations.

And that’s exactly where waste tends to hide: licenses purchased but never used, overlapping tools doing the same job, auto-renewals managed without questioning if they’re still needed. Effective governance requires shared responsibility: procurement, approval, and usage need to happen on the same playing field.

IT knows the tools. Finance knows the numbers. The business knows what’s needed. Put them together, and you finally get the full picture.

Myth #3 – “Controlling software spend means slowing down the business”

It’s a common fear: putting controls in place will mean saying “no” more often, slowing down teams, holding back innovation. In short, becoming a blocker. But in reality, a solid governance system strengthens the business and makes it easier to choose the right tools.

Control doesn’t mean cutting everything. No one’s suggesting you take Slack away or ban new software. Quite the opposite: a good spend management system creates space.

Space to invest in what truly matters.

The key is knowing what’s being used, what’s redundant, and what’s actually delivering value. It’s not unusual to find three tools doing the same thing, or licenses still active long after the original user left. Bringing order to the stack isn’t about limiting teams, it’s about protecting the company from waste and inconsistency.

Shifting from a reactive to a proactive approach helps reduce costs without compromising performance. It’s not about blocking resources, but reallocating them. And when your software is tracked, justified, and shared across teams, it supports the business instead of weighing on the budget.

Myth #4 – “Excel is enough”

For many teams, managing software spend means keeping a shared Excel file. One tab for tools, one for costs, maybe a column for renewals. And that’s it. It might work in the beginning. But then the company grows, teams multiply, tools pile up. And that file just can’t keep up.

The problem isn’t Excel itself. It’s pushing it beyond what it was built for. As complexity grows, data gets outdated, human errors creep in, renewal dates get missed, and ownership gets blurred. Tools stay active long after they’re needed—or after the person responsible has left. Duplicates go unnoticed. Renewals happen on autopilot.

This is what happens when software spend is managed manually.

A modern system does the opposite: it centralizes information, automates workflows, assigns clear ownership, and keeps track of every renewal. It gives you real-time visibility, reliable data, and a level of control no spreadsheet can match.

Myth #5 – “Managing costs means asking for a discount”

When it comes to software spend, the first thing many people think of is negotiation: asking for a discount, renegotiating terms, trying to shave off 10%. And in some cases, that can absolutely make a difference. But it’s not the whole picture.

Because real savings don’t just come from price, they also come from visibility. If you don’t know exactly what you’re paying for, who’s using it, and why, even the smartest negotiation might just be covering up deeper issues: unused tools, duplicate licenses, contracts left running with no real owner. In that case, you’re just spending less… on something you might not need at all.

Negotiation is an integral part of the process, and companies like Smartness use it effectively. But what really made the difference for them was putting it inside a broader system: continuous monitoring, clear ownership, automated workflows, and proactive alerts. That’s what turned savings from occasional to structural.

Bottom line: negotiating smart is great. But when it’s part of a structured system, that’s when the results become consistent and measurable.

Recognize the signals, before they get expensive

If any of these look familiar (“IT will take care of it,” “we only use a dozen tools,” “Excel works just fine”), it might be time to look at software management from a new angle.

Because behind those assumptions, real inefficiencies can quietly build up and show up in your numbers quarter after quarter.

Managing software effectively is no longer just a technical task. It’s a shared responsibility between Finance, IT, and Business teams. And if there’s no visibility today, stepping in later will be more challenging, costly, and risky.

The first step? Question old habits. Start a conversation with your IT team. Explore solutions that bring clarity, control, and transparency to your software spend.

And if you want to see how to reduce up to 30% of your software costs without sacrificing speed or efficiency, download the full guide. You’ll find 4 clear steps to help you get started right away.

Download the guide