Direct Answer
Routine monthly or annual SaaS subscriptions (like Google Workspace, Slack) must be expensed as incurred because you do not own the software or have a perpetual license. Only significant upfront implementation or customization costs can sometimes be capitalized.
The Rule of Ownership
Under most accounting frameworks (IFRS, US GAAP), you can only capitalize an intangible asset if you control it and it provides future economic benefit. With SaaS, you are merely paying for access to a service.
Implementation Costs
If you implement a massive ERP system (like Salesforce or Workday) and pay $50,000 to consultants for configuration, new accounting standards often allow you to capitalize certain implementation costs of Cloud Computing Arrangements (CCAs), amortizing them over the term of the subscription.
Audit Best Practices
Keep a clear schedule of software subscriptions. Any invoice for 'monthly license' should immediately hit the software expense account.