License reconciliation is the monthly check that what you pay your vendors matches what you bill your clients. Skip it and the gap grows quietly. A few unbilled seats per client, across 30 clients, can be thousands of dollars a year.
Here's a process that works with a spreadsheet, whatever tools you use.
1. Pull what you pay for
Section titled “1. Pull what you pay for”Export the current license counts from every place you buy: vendor portals, distributors and any direct subscriptions. You want one row per client, per product, with the quantity and your cost.
Do this as close to invoice day as you can. Counts pulled on the 1st are already wrong by the 15th.
2. Pull what you bill
Section titled “2. Pull what you bill”Export each client's recurring billing lines from your PSA: product, quantity and sell price.
3. Make the product names match
Section titled “3. Make the product names match”This is where most of the time goes. The same license has one name on the vendor side and another in your PSA. Build a small mapping table, vendor product name in one column and PSA item in the other, and keep it. Next month you'll only add new products.
4. Compare client by client
Section titled “4. Compare client by client”For each client and product, put paid quantity next to billed quantity. Then add two columns:
- Gap: paid minus billed.
- Monthly cost of the gap: gap times your cost.
Sort by that last column. Fix the biggest numbers first.
5. Check your margin while you're there
Section titled “5. Check your margin while you're there”Add sell price minus cost for each line. It's common to find a product that's been billed at an old price since the vendor raised theirs. A negative margin is a gap too.
Where the gaps usually hide
Section titled “Where the gaps usually hide”- New hires added mid-month. The seat is bought the day they start. The invoice isn't updated until someone remembers.
- Annual commitments. Seats on a yearly term can't be reduced, so a client who drops users still costs you until renewal.
- Add-ons. Backup, filtering and security add-ons often follow the main license count on the vendor side but not on the invoice.
- Clients who left. Their subscriptions sometimes keep running after the last invoice.
- Free trials that converted. A trial becomes a paid subscription with nothing on the client's agreement.
When the spreadsheet stops working
Section titled “When the spreadsheet stops working”This process is fine for a handful of clients and one or two vendors. It tends to break somewhere around 15 clients or a third vendor. At that point, the export, mapping and comparison steps take a day or more each month, and one missed row costs real money.
That's the work Sinculate is being built to do for you.