Step 1: know what you are paying for
Open the licences page in the admin centre and your latest invoice. Match them up. Microsoft explains the relationship between subscriptions and licences if the terms are unfamiliar.
Step 2: find seats that are not used
Use the usage reports to list people with no recent activity, as set out in unused Microsoft 365 licences. Confirm each name with a manager.
Step 3: check plan fit
Ask what each group actually needs. Someone who reads email and joins meetings may not need the plan an analyst or administrator does. Compare plans using Microsoft's own comparison and our Microsoft 365 plans compared guide.
Step 4: look for overlap
Check for add-ons bought for features a plan already includes, and for separate subscriptions that duplicate what you own. Look at each person's assigned licences, not just the totals, because duplicates are invisible in a summary.
Step 5: time the change
Some changes only apply at renewal, so start early. Our renewal checklist sets out a 90-day plan.
Step 6: check the invoice
A saving is only real once it appears on your invoice. Check the next one, and repeat the exercise on a regular schedule. For the wider approach, see reduce Microsoft 365 licence costs and Microsoft 365 licence optimisation.
Frequently asked questions
Is it better to pay monthly or annually?
Annual terms often cost less per seat but are less flexible. Which suits you depends on how stable your headcount is, so check the terms of your own agreement.
Can we reduce costs without losing security?
Often, yes, but check which protections each plan provides before you move anyone. Cost and security should be reviewed together.
Who should do this?
Someone with admin rights to pull the reports and someone from the business to confirm findings. Smaller firms can read Microsoft 365 cost optimisation for SMEs.
Innoligo is an authorised Microsoft CSP partner. This page is general information and applies whoever you buy your licences from. Microsoft changes its plans, prices and admin screens, so check the linked Microsoft pages for current detail. Microsoft, Microsoft 365, Entra and Copilot are trademarks of the Microsoft group of companies; this page is independent and is not published or endorsed by Microsoft. About Innoligo.