You made the offer, they said yes, and it was a good day. Then you went to add them to everything, and the good day got a bit smaller. The invoicing tool wants another seat. So does the time tracker, the project board, the password manager and the shared inbox. None of the increases is outrageous on its own. Together they are more than you had in your head, and they arrive every month from now on.
The bit that grates is not the money. It is that nothing about the work changed. You did not get a better tool. You got the same tool, for one more person, at a price that went up because your business did the thing you were hoping it would do.
Is this you?
- You have had to check what a hire costs in software before deciding you could afford them.
- Somebody on your team is sharing a login, because a second seat felt like too much for what they do.
- You cannot say, without going and looking, what your software costs you a year.
- A tool you have used for years repriced, and the new number is not in the same category as the old one.
- You are paying for seats belonging to people who only ever need to look at something.
Do the arithmetic once, because nobody does
Per-seat pricing is designed to be read one month at a time, which is where it looks reasonable. Read it a year at a time, for the team you expect to have, and it reads differently.
Take one tool at $11 a seat a month. On your own that is $132 a year, which is nothing. At five people it is $660. At ten it is $1,320, for the same software doing the same job. Now do that for the four or five tools your team actually needs a login to, and you have the number that made you hesitate over the hire.
The honest version of this is not that per-seat pricing is wrong. It suits a business where every extra person generates extra value in that specific tool, which is often true of the tool they spend all day in. It suits nobody for the tools people merely need access to.
Our invoicing software cost calculator does the per-year arithmetic for invoicing and time tracking specifically, including the plans where the seat price is only a floor. It needs no account.
Your prices have not moved, and that is the real squeeze
Here is the part that makes a rising software bill hurt more than the figure suggests. We looked at the saved catalogue items in our own data, which is what businesses charge for their regular work:
At least half of small businesses charge no more for their regular items than they did 18 months earlier: the typical price change is 0% (saved catalogue items, 86 businesses).
So for at least half of small businesses, the cost of the tools went up and the price of the work did not. That gap comes straight out of the margin. Software is rarely the biggest line in it, but it is one of the few that rises automatically, without anyone deciding anything, every time you grow.
See what a rising software bill does to your margin
Put your price, your costs and the extra software spend into the Profit Margin Calculator. It shows how much of each sale is left once the tools are paid for, before you decide on the next hire.
The three ways tools charge, and which one you want
Per seat. You pay for each person with a login. Predictable, and it scales with headcount rather than with value. This is most project and time tracking tools.
Per business. One price for the account, usually with a cap on users or clients. You only pay more when you cross a limit, and then it is one step rather than a per-person fee. Cheaper for a team, worse for a sole trader who could have had a free tier.
Usage. A base rate, with charges on top for how much you actually do: invoices, projects, clients, tasks. The one to watch, because the published number is a floor rather than a price. Harvest moved to this shape in 2026, and the BBC reported a UK consultancy whose monthly bill went from $130 to $2,110 at renewal, and a US customer whose annual charge went from $2,800 to $23,000. Those are the extremes, and they are the reason to read the pricing page twice. We wrote that one up in full, with the sources and what Harvest said, in the 2026 Harvest price change.
Most stacks are a mix, which is why the annual figure surprises people. Work it out per tool, not in total.
What to do about it, this week
1. Count the seats you are buying for people who only need to look
This is usually where the waste is. Somebody who needs to see whether an invoice was paid, or check a project is on track, often does not need to work in the tool at all. Many tools have a free or cheaper view-only role, and plenty of businesses have never checked. Go through each tool and ask what each person actually does in it, rather than what their job title suggests.
2. Put the annual figure on one line each
Not a total. Per tool, per year, at your current headcount and at the headcount you expect in twelve months. The two numbers side by side are what tell you which tool is the problem. It is almost never the one you assumed.
3. Check what happens at the next person, not the current one
Plan caps bite between hires. A tool that covers five users for one price and jumps a tier at six will do that silently, in the month you are least paying attention. Find out where each cap sits now, while nobody is waiting on a login.
4. Only then look at switching
Changing tools costs real time and some goodwill, so it is the last step rather than the first. If one tool turns out to be most of the increase, and the thing your team does in it is narrow, that is the one to look at. Moving a tool people live in all day to save a few hundred a year is a bad trade.
What not to do
Do not share a login. It breaks any audit trail you have, it means you cannot see who did what, and it makes removing someone who leaves a much worse afternoon than it needed to be. If a seat is not worth paying for, the honest answer is a view-only role or no access, not a shared password.
And do not cancel something your team relies on to make the number look better this month. A tool that was earning its seat is not the place to find the saving. The seats nobody is using are.
Free tools for working out what your tools cost
Frequently asked questions
Why does my software bill go up when I hire someone?
Because most business tools charge per seat, so each person with a login adds a monthly fee to every tool they are added to. One hire typically touches four or five tools at once, which is why the jump is bigger than any single price suggests. Some tools also bill on usage on top of the seat, so the published figure is a floor rather than the full cost.
How do I work out what my software actually costs per year?
List each tool on its own line with its per-seat or per-account price, multiply by twelve, and do it twice: once at your current headcount and once at the headcount you expect in a year. Keep them as separate lines rather than one total, because the point of the exercise is finding which single tool is most of the increase.
Is per-seat or per-business pricing cheaper?
Per business is cheaper for a team and per seat is often cheaper for one person, since several per-seat tools have a free tier a sole trader can sit on. The crossover usually arrives at the second or third login. Work out both at the headcount you expect in twelve months rather than today's.
Should I share a login to save on seats?
No. It removes any record of who did what, which matters most on anything touching money, and it makes offboarding someone who leaves far harder than it needs to be. If a seat is not worth the money, look for a view-only role, which many tools offer free or cheaper, or give no access at all.
What is usage-based pricing and why does it matter?
It is a base rate per seat with extra charges for what you do, such as invoices, projects, clients or tasks. It matters because the number on the pricing page is then a floor rather than a price, and you cannot budget from it. Read the pricing page for the phrase starting from, which is the signal.
What is the first thing to check?
The seats you are paying for on behalf of people who only need to look at something. That is where the waste usually is, because a view-only role is often free or cheaper and most businesses have never gone through tool by tool to ask what each person actually does in it.
