Writing
How to raise software spend at a client's year-end review
The year-end review is a good time, because 12 months of charges are already in the books. For clients on monthly advisory, a month-end close works too, with one or two items at a time.
Year-end is a meeting clients rarely skip. You already have 12 months of books open, and the client is starting to think about next year's budget.
That makes it a good time to bring up software spend. This post covers what to prepare, a short script, and how to turn the client's answers into follow-up work.
Why year-end works for this topic
Software charges look small one at a time. A client glances at a card statement, sees a modest monthly charge, and moves on. Added up over 12 months, the same charges get the client's attention.
Year-end also gives the client time to act. If an annual plan renews in the next few months, the client can still decide before the next charge hits.
Month-end works too, for clients on monthly advisory. Use a short version with one or two items and skip the full list.
What to bring
Keep it to one page. The client should be able to read it in a couple of minutes.
- A list of repeat software charges from the last 12 months. Give each one a plain tool name, how often it bills, the payment method, and the 12-month total.
- Annual charges that are likely to renew in the next 90 days, based on the date of last year's charge.
- Any pairs that look like overlap, such as two scheduling tools or two file-sharing tools.
- The open questions you want answered, written out so you don't have to improvise.
Leave out anything you can't back up with a payment. Don't guess at how many people use a tool or whether anyone opens it. You only know what the client paid.
Here is an example. Northpine Bookkeeping is a made-up firm, and its client and numbers are fictional. Northpine preps a year-end review for a client and finds 11 repeat software charges totaling $6,400 over 12 months. Two of them are project tools. One is an annual charge that renewed last February, so it will likely bill again in February. Those three items go at the top of the page.
A short script
Adapt the wording to how you already talk with the client. Start with what you did and why it matters now.
"When we closed the year, we pulled every repeat software charge from your books. There are [number] of them. A few may renew in the next couple of months, so I'd like ten minutes to go through the list with you."
Then go tool by tool, starting with the largest 12-month total. Ask one question per tool.
"This one is [tool], paid on the company card, about [amount] over the year. Is it still part of how you work?"
For a possible overlap:
"You're paying for [tool A] and [tool B]. They look like they do similar jobs. Is one of them left over from before?"
For a charge nobody recognizes:
"We can't match this one to a tool you've mentioned. Do you know what it is? If not, we can help you find out before it bills again."
End with a next step, not a pitch:
"I'll note which ones you want to keep, cancel, or check on. At the next month-end close, I'll confirm the cancelled ones stopped."
What to listen for
Each answer falls into one of a few buckets.
"Keep" is fine. Note it and move on. The client now knows the yearly total, and that alone is useful to them.
"Cancel" needs an owner and a date. Ask who will cancel it and when. Offer to check the next statement to confirm the charge stopped.
"Not sure" is the most useful answer for the firm. It means someone has to find out who signed up for the tool, check with staff, or read a contract. That is work you can scope and price.
Turn the answers into follow-up work
The list from this meeting gives you a reason to come back. A few ways to package it:
- A check at each month-end close that cancelled charges stopped and no new repeat charges appeared.
- A software spend review once a quarter, added to an existing advisory package.
- A one-time cleanup project for the "not sure" items.
Write the client's decisions into the client file. Next year's review then starts with this year's list, and you can show the client what changed.
Make the prep faster
The meeting is short. Building the list is the slow part. Pulling 12 months of charges and cleaning up vendor names by hand takes time, and you repeat it for every client with a year-end review.
ShadowLedger does a first pass from the payments. It takes a QuickBooks Online or Xero export, or a CSV from other books, and flags charges that repeat, possible duplicate vendors, amounts that changed, and renewals you can see from the charges. On the Firm plan you can connect QuickBooks Online or Xero directly, and you get a white-labeled findings report to bring to the meeting under your firm's name.
You review the findings, add your questions, and run the conversation yourself.
FAQ
When should a firm bring up software spend with a client?
The year-end review is a good time, because 12 months of charges are already in the books. For clients on monthly advisory, a month-end close works too, with one or two items at a time.
What should I bring to a software spend conversation?
Bring one page. List each repeat software charge with a tool name, billing frequency, payment method, and 12-month total. Add annual charges likely to renew soon and any tools that look like overlap.
Can I tell the client which tools nobody uses?
No. The books show payments, not who uses a tool. Ask the client about each charge and record the answer as keep, cancel, or not sure.
How does a software spend review turn into paid work?
The "not sure" items become a cleanup project. Cancelled charges need a check at the next close. You can also add a recurring software spend review to an existing advisory package.
To try it on one client before your next year-end meeting, run the free audit on one company's CSV. It needs no card.