Before you remove a Microsoft 365 licence, check these five things

Start with the question you can actually answer

A licence review should produce a small list of decisions somebody can approve. Which seats can be reused? Which users need a different plan? Which subscriptions can change at renewal? Put those questions at the top of the review so an activity export becomes a useful starting point.

Microsoft separates licence assignment from service usage. In the admin centre, Billing → Licences shows allocation, while Reports → Usage shows activity across services. Use both views. Microsoft documents reporting delays, so a recent change may take time to appear. Source 1.

The five checks

1. Confirm the account owner. Record the person or team responsible, their role and whether the account is still needed.
2. Read a useful reporting period. Choose a window that covers the work. Ask about leave, seasonal tasks and project timing before treating low activity as unused capacity.
3. Check the whole requirement. Document the services and controls the role needs. A single quiet application is incomplete evidence for changing an entire plan.
4. Confirm the assignment route. Establish whether the licence comes from a direct assignment or group membership before making a change. Microsoft documents both routes. Source 2.
5. Check the commercial date. Confirm the subscription term, renewal and quantity-change rules with your licensing owner or provider. Record when a reduction could affect an invoice.

Keep reclaimed seats and cash savings separate

Use two columns in the review: capacity available for reuse, and a confirmed reduction in purchased quantity or cost. Moving a seat to a new starter can be useful even when the current invoice stays the same. A claimed saving needs a billing consequence and a date.

Microsoft describes licence reassignment and subscription cancellation as different actions, with cancellation windows applying to some subscriptions. Check your own agreement before promising a saving. Source 2.

What should the review hand over?

For each proposed change, record the account, current plan, usage period, business requirement, proposed action, owner and expected billing impact. Add any retention or service dependencies that need a separate check. Ask the owner to approve the change, then record the outcome after it happens.

That creates a review you can repeat at the next renewal without rebuilding the reasoning from scratch.