We’re settling the debate.
It’s easy to see certain app or service subscriptions as useful tools for your business–even if you’re only testing them out for a short-term project.
But how do you know whether buying into a subscription is a worthwhile investment or a 3-day trial gone bad?
Today we’re helping you save money and settle this never-ending business debate with three simple questions.
Is the subscription brand new?
If you just started subscribing and you’re not familiar with the platform or service yet, it’s perfectly all right to choose a month-to-month subscription for now. The upfront cost will be low, and you can be more flexible with canceling based on how often you actually use the service.
For example, you may choose to start with a basic account on an AI transcription service.
The free plan lets you record and transcribe up to 90 minutes of meetings, interviews, or audio content each month.
That might be enough for now.
However, your team needs access to the finished files, and you need to be able to upload external recordings to save time.
A pro account is only a few dollars, and it increases the number of features you can access from that service. You opt in, and your team quickly wraps up the project. Now you can quit the monthly subscription and still keep your access to the finished files from that platform.
Until you’re sure this is for the long term, month-to-month is a solid choice for subscriptions.
Which brings us to our next question–
Have you had the subscription for 6 months (or more)?
It’s easy to get started on a new app or delivery service when there’s a 3-, 10-, or 30-day free trial. Once your payment method kicks in, however, that becomes a recurring business expense.
So, how do you know whether it’s better to commit to the annual plan or stick with a monthly payment?
Simple.
If you’re already using the subscription and you have been for the past six months and this is a service you know you need long-term, it’s probably in your best interest to make this an annual subscription.
Lots of platforms and providers also offer a discount if you pay for the services in one lump sum, meaning it might be beneficial to take advantage of the annual price break!
Add it to your budget and make sure you account for it in your annual cash flow. Setting a reminder can help you keep track of a payment like this that only falls due once a year.
Here’s the caveat–
What does the annual cancellation policy look like?
If you opt for the annual plan, it’s very possible there are cancellation fees should you choose to end the subscription farther down the road.
That, or you might be stuck paying the remainder of your membership regardless of whether you use it or not. In most cases, it’s unlikely that you’ll be reimbursed or pro-rated for quitting part way through.
So unless you’re clear on the hoops you may have to jump through to cancel, be sure to stick with the month-to-month option. If you are, and you’re willing to accept them, then an annual plan could be perfect for you.
So, buy the annual subscription if:
The annual subscription isn’t going to cause you bottom-line panic.
You’ve had the subscription for some time and you love it and need it.
You’ve read the cancellation policies and are prepared to accept them, should you decide to cancel.
Like so many of our accounting services, we’ve done the math so you don’t have to. The next time you’re using an app to double check your current subscription plans, use these three questions to evaluate whether they’re worth keeping for a little or a long while.
In the meantime, we’re always here to help you with public accounting in the Brainerd Lakes and Aitkin Area. And if you’re interested in more tips for saving money, check out our Top 7 recommended Apps for Small Business Bookkeeping.