Do the users in the Inactive status take up a license? Will marking a user inactive downgrade their license automatically?

The users in Inactive status will not use up licenses in Zoho Expense. Marking a user inactive will not downgrade their license automatically. You will have to remove them from Zoho Expense. Here’s how:

• Click Admin View on the left sidebar.
• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Subscription under Organization. You will be redirected to the payments page where you can remove the users.
• Click Downgrade Add-Ons.
• Select the number of users you want to remove and click Proceed.
• Confirm your action by clicking Proceed again to remove the users.