What this check looks at
Compares seats purchased against seats assigned for every paid subscription.
Microsoft 365 bills for the number of seats bought on each subscription, not the number assigned to people. Seats bought for a project, for joiners who never arrived, or freed when leavers’ licences were removed stay on the invoice until someone reduces the quantity. Under Microsoft’s new commerce terms, annual-term subscriptions can only be reduced within seven days of purchase or renewal, or for the next term, so the reduction has to be planned.
This check compares purchased and assigned seats on every paid subscription (free and trial subscriptions are left out) and lists those with five or more unassigned seats, valued at indicative UK list prices. The check fails when the unassigned seats are worth £500 or more a month in total, and warns when there is a smaller surplus.
The waste is direct: ten spare Microsoft 365 Business Premium seats cost over two thousand pounds a year at list price for nothing. The gap also tends to grow, because the leaver process that frees seats rarely includes reducing the subscription, and an untidy licence position makes the next renewal harder to negotiate.
Why it matters
Unassigned seats are billed every month and deliver nothing; reducing them carries no technical risk.
A typical case: a 60-person firm cut staff in a restructure and removed licences from the leavers, but kept renewing 75 Business Premium seats and 20 Visio Plan 2 seats nobody uses. At list price that is several thousand pounds a year, roughly the cost of a security assessment and a year of the MSP’s monitoring, spent on nothing.
Reducing seat counts carries no technical risk and the saving recurs every month. Keeping a small buffer for planned joiners is sensible; carrying dozens of spare seats is not.
ISO 27001 A.5.9 (inventory of information and other associated assets), CIS Controls v8 safeguard 2.1 (software inventory), the NCSC 10 Steps asset management guidance and the NCSC CAF asset management outcome all expect licensed software to be tracked against actual use.
How to fix it
Where: Microsoft 365 admin centre → Billing → Your products
Before you start
- Check the renewal date and term; monthly subscriptions can be reduced at any time, annual ones only at the anniversary.
- Keep a small buffer for joiners if hiring is planned.
Step by step
- Confirm the surplus and agree a buffer. In the Microsoft 365 admin centre, go to Billing > Licences. For each subscription in the evidence, compare the total licences with the number assigned, and agree with the client how many spare seats to keep for planned joiners.
- Check each subscription’s term and renewal date. Go to Billing > Your products and open each subscription. Note whether its term is monthly or annual, how it is billed, and its renewal date. Monthly-term subscriptions can be reduced at any time; annual-term ones only within seven days of purchase or renewal, or for the next term.
- Reduce monthly-term subscriptions now. On the subscription page, select Remove licences, enter the new total quantity and Save. If the admin centre says the licences are still assigned, first remove them from leavers (see the disabled and dormant account licence findings).
- Set the renewal quantity on annual-term subscriptions. For annual-term subscriptions, open the subscription’s renewal settings and set the number of licences for the next term, then put the renewal date in the MSP’s calendar so you can check the change took effect.
- Ask the CSP partner where they hold the subscription. If the subscription was bought through a Cloud Solution Provider (the admin centre shows the partner), the quantity is changed by that partner in Partner Center. Send them the new quantities and dates in writing.
- Keep the gap from reopening. Add a monthly check of assigned against purchased seats (Billing > Licences) to the MSP’s routine, and make reducing the subscription part of the leaver process.
- Confirm the quantities changed. Billing > Licences should show available seats equal to the agreed buffer on monthly-term subscriptions, and the renewal quantity set on annual ones. The finding clears at the next assessment once the quantities change.
What users will notice
None.
How to confirm it worked
Microsoft 365 admin centre, Billing, Licenses: available seats match the buffer you agreed.
Frameworks and controls
This check maps to controls in 5 frameworks. Passing it is evidence that the setting is in place, not a certification against any of them.
| Framework | Control |
|---|---|
| NCSC CAF | A3.a Asset management |
| ISO 27001:2022 | A.5.9 Inventory of information and other associated assets |
| CIS Controls v8.1 | 2.1 Establish and maintain a software inventory (IG1) |
| NIST CSF 2.0 | ID.AM-02: Inventories of software, services, and systems managed by the organization are maintained |
| NCSC 10 Steps | Asset management |
The framework mappings were last checked against the published standards in October 2026.
Microsoft’s documentation
- Buy or remove licences (Microsoft Learn)