Managing Licences Without Overspending (Microsoft 365)

Why Licence Management Matters

Every active user in Microsoft 365 needs a licence assigned to them. Licences are what you pay for each month, so unused licences are wasted money. Equally, if you run out, new starters cannot be set up until you buy more.

For a small business, even a couple of unused licences can add up over the course of a year. A quick monthly check keeps costs under control.

Checking Your Current Licences

Step 1: See what you have

• Sign in at admin.microsoft.com.
• Go to Billing > Licences.
• This shows you each licence type you own, how many are available, and how many are assigned.
• If the ‘available’ number is zero, all your licences are in use. If it is more than one or two, you may be paying for licences nobody is using.

Step 2: Check who has what

• Go to Users > Active users.
• You can see the licence assigned to each person in the list.
• Look for any accounts that belong to people who have left or are no longer active.

👉 Tip: Set a reminder to check your licences once a month. It takes two minutes and could save you hundreds of pounds over a year.

Reassigning a Licence

Step 1: Remove the licence from the leaver

• Go to Users > Active users and find the old account.
• Click on their name, then Licences and apps.
• Untick the licence and click Save changes.

Step 2: Assign it to the new user

• Find the new user (or create their account first).
• Click on their name, then Licences and apps.
• Tick the licence you want to assign and click Save changes.
• When someone leaves, you can remove their licence and assign it to a new starter instead of buying a new one.

Understanding Common Licence Types

Microsoft 365 Business Basic: Web and mobile versions of Office apps, plus email, Teams, and OneDrive. Good for people who mainly need email and Teams.

Microsoft 365 Business Standard: Everything in Basic, plus the full desktop Office apps (Word, Excel, PowerPoint etc.). Best for people who need to work offline or use advanced features.

Microsoft 365 Business Premium: Everything in Standard, plus advanced security features like device management and advanced threat protection. Worth considering if security is a priority.

Not sure which licence is right for your team? Get in touch with Freethought Services and we can help you work it out.