What am I spending on advertising?

Bottomline pulls your ad spend from your accounting data and cross-references it with platform performance metrics to show cost per acquisition.

What am I spending on payroll?

Your monthly report breaks out payroll as a percentage of revenue and flags when it crosses the threshold you set.

Are my expenses in line with my revenue?

Bottomline benchmarks your expense-to-revenue ratio and flags categories that are growing faster than your top line.

Which expense categories are over or under budget?

Your monthly report breaks down expenses by category and flags any that are trending above your budget thresholds.

What's my net margin?

After all expenses, your net margin tells you how much of every dollar you actually keep. Bottomline tracks this automatically.

What am I spending on software and tools?

Software subscriptions add up one $29/month tool at a time. Here's how to find your total software spend and figure out which tools are actually earning their keep.

6 min read

The short answer

Software and tool costs include SaaS subscriptions, one-time licenses, app marketplace purchases, and any cloud hosting fees. They are usually in one or two P&L accounts, but many businesses also have software charges hitting their credit cards that never get properly categorized. Below, we show you how to find the real total.

Why SaaS sprawl is the new expense leak for small businesses

You sign up for a project management tool at $12/month. A CRM at $79/month. An email marketing platform at $49/month. Accounting software at $85/month. A design tool at $22/month. A scheduling tool at $15/month. None of them feels expensive on its own.

Then you add the tools your team signed up for: a $30/month file sharing upgrade, a $45/month analytics platform, $20/month for a password manager. Plus annual subscriptions you forgot about that auto-renewed: $240 here, $180 there.

Suddenly your software stack costs $6,300 a month. That is $75,600 a year. For a business doing $900K in revenue, software is eating 8.4% of every dollar, often more than insurance and sometimes rivaling equipment costs. The difference is that nobody ever audits it.

What counts as software spending in your books

SaaS subscriptions: Monthly or annual subscriptions to cloud software (CRM, email marketing, accounting, project management, etc.).
One-time software licenses: Desktop software, plugins, templates, or theme purchases.
Cloud hosting and infrastructure: Web hosting, AWS/GCP charges, domain registrations, email hosting.
The hidden ones:App purchases on credit cards that get categorized as “Office Expenses” or “Miscellaneous.” Annual renewals that hit once a year and get lost in the noise. Trial subscriptions you forgot to cancel.

How to find your software spending in QuickBooks Online (5 steps)

1
Open the Profit and Loss report
From the left sidebar, click Reports. Search for “Profit and Loss” and set it to the current month or year-to-date.
2
Find software-related accounts
Look for accounts like “Computer and Internet Expenses,” “Software Subscriptions,” “SaaS Expenses,” or “Online Services.” QuickBooks does not have a default software account, so the name depends on your setup.
3
Check other accounts for hidden software charges
Click into “Office Expenses,” “Miscellaneous,” and “Credit Card Charges” accounts. Look for recurring charges from software vendors (Stripe, Shopify, HubSpot, Adobe, etc.) that may have been miscategorized.
4
Review credit card statements for subscriptions
Go to Banking (or Transactions) and filter by your business credit card. Sort by payee name and look for recurring monthly charges. These often reveal subscriptions that never made it into a software account.
5
Total and evaluate
Add up everything. Then go through the list and ask: is anyone actively using this tool? When was the last time someone logged in? Could two of these tools be replaced by one?

Total time: about 10-15 minutes for a thorough audit. The P&L gives you the known total in 3 minutes. Finding hidden subscriptions on credit cards takes the rest.

How to find your software spending in Xero (4 steps)

1
Go to Accounting → Reports → Profit and Loss
Set the date range and click Update.
2
Find software accounts under Operating Expenses
Look for “Computer & Internet,” “Software Expenses,” “Subscriptions,” or “IT Expenses” in Operating Expenses. Xero includes a default “Computer & Internet” account.
3
Search bank transactions for recurring charges
Go to Accounting → Bank Accounts, select your credit card account, and look for recurring monthly charges from software vendors. Xero's bank rules may have auto-categorized these into the wrong account.
4
Total everything and compare periods
Add up all software-related expenses. Use “Compare with: Previous Year” to see if your software stack has grown. Most businesses see a 15-25% annual increase in SaaS spending without realizing it.

Total time: about 10 minutes. Like QuickBooks, the known expenses take 3 minutes. Finding miscategorized subscriptions takes the extra time.

What it takes to keep software spending under control

10-15 minutes quarterly to do a proper audit (monthly is overkill unless you are actively cutting).
A subscription inventory. A simple spreadsheet listing every tool, its monthly cost, who uses it, and when it renews. Without this, you are relying on your memory and your credit card statements.
A cancellation habit. Most SaaS tools auto-renew. If nobody remembers to cancel the tool your team stopped using three months ago, it keeps charging. The average small business has 2-4 unused subscriptions running at any given time.

Or track your software spending automatically, every month

Bottomline identifies all software and subscription charges in your accounting data, including ones miscategorized in general expense accounts, and shows the combined total:

Software & tools

Monthly total $6,340/Annual run rate $76,080/% of revenue 6.9%

Up 22% year over year

From a real Bottomline report. Software charges are identified across all expense accounts.

Bottomline also flags new recurring charges that appear for the first time, so you know immediately when someone on your team signs up for a new tool. No more discovering a $45/month subscription six months after it started.