Before renewing Microsoft 365, compare the licences your business buys with the people and services that still need them. Check the renewal date and the rules for reducing quantities before making changes. Microsoft treats unassigning a user’s licence and removing a paid licence from a subscription as separate actions.[5]
Start with a review, not a deletion exercise. Ask whoever manages your tenant for a current licence inventory and match it against your invoice and staff list. The aim is a written renewal instruction: which subscriptions to keep, what to change, when changes can happen and who has approved them.
Separate purchased licences from assigned licences
For each subscription, record the product name, purchased quantity, assigned quantity and supplier. Microsoft explains that businesses buy a number of licences and then assign them to individual accounts; a licence can also be reassigned when somebody leaves.[3] An available licence is therefore something to investigate, not proof that your bill has already fallen.
Ask why any spare capacity exists. It might be intended for an agreed new starter, or it might be left over from an old project. Mark the reason and the person who confirmed it. Keep the account inventory restricted to the people doing the review rather than circulating staff details with every quote request.
Confirm the date a reduction can take effect
Find the commitment end date and distinguish it from the next invoice date. Record the payment frequency separately. Ask your supplier to confirm the deadline for renewal instructions, the quantity being renewed and the first invoice that would reflect a reduction. Do not budget for savings until that effective date is clear.
Microsoft’s guidance distinguishes billing arrangements. For a Microsoft Customer Agreement billing account, it describes a seven-day window after purchase or renewal for reducing licences, with later reductions reflected after renewal.[5] Do not apply that rule blindly to every reseller contract. Have your provider confirm the terms of your actual subscription in writing, particularly if you are changing suppliers at the same time.
Match each licence to the work being done
Ask managers to confirm what each role needs now, including installed applications, email, specialist add-ons and security requirements. Check planned starters and role changes too. Our guide to choosing a Microsoft 365 licence explains the plan-selection questions.[1] This review is about whether the existing allocation still fits, rather than buying everything again from scratch.
Review add-ons alongside the main subscription. Microsoft gives the example of assigning a separate Visio subscription to only a subset of users.[3] Ask the owner of each specialist tool to confirm who still needs it. Avoid treating a quiet month as proof that software is unnecessary: annual reporting or occasional client work may explain infrequent use.
Deal with leavers before reclaiming their licences
A former employee’s account needs an agreed handover, not just a cheaper renewal. Microsoft’s leaver guidance puts preventing sign-in, preserving mailbox content and arranging access to email and OneDrive data before removing the licence.[8] Ask your administrator to follow that process and confirm who now owns the person’s ongoing work.
Do not delete an account because it looks inactive in an export. Check whether it belongs to someone on leave, supports a business process or holds information that needs preserving. Get the data owner to approve the handover and any retention requirements. Keep licence removal as a recorded step in the leaver process, with someone responsible for checking the result.
Write down the changes and their consequences
Use a short change record for each proposed adjustment. Include the subscription, current quantity, proposed quantity, effective date, approver and any work required first. Separate confirmed changes from unresolved questions. Someone checking the renewal should be able to understand the decision without reconstructing a conversation from several email threads.
Before downgrading a plan, ask your administrator to check which applications and security controls rely on it. Request a change window, a way to reverse the change where possible, and checks for affected staff afterwards. A lower invoice is not a useful outcome if the accounts team discovers during month-end that an essential application no longer works.
Make the renewal instruction easy to check
Send the supplier the approved changes before its stated deadline and ask for written confirmation. After the effective date, compare the subscription quantities, user assignments and invoice with your instruction. Keep unresolved items open until someone has explained them. Schedule the next review before the next commitment ends, rather than waiting for another renewal invoice.
If you want help preparing that instruction, talk to BMT about Microsoft 365. Bring your renewal dates, subscription list and the questions you could not resolve internally. That gives the conversation a practical starting point without committing you to a migration or a different plan.
Sources
[1] https://bm-technologies.co.uk/what-microsoft-365-licence-does-my-business-need
[5] https://learn.microsoft.com/en-us/microsoft-365/commerce/licenses/buy-licenses?view=o365-worldwide