Preparing for a Software Licence Audit

Preparing for a Software Licence Audit

Software audits are not just for large companies. Vendors audit small businesses too. Being ready is mostly a matter of keeping decent records.

What a Software Audit Is

A software licence audit is when a vendor checks whether the number of licences you have purchased matches the number you are actually using. If you are using more than you have paid for, you may have to buy additional licences. If you have paid for more than you use, you are unlikely to get a refund, but at least you will know.

Audits are usually initiated by the vendor as part of their contractual right to verify compliance. Some are routine, others are triggered by a discrepancy in purchasing data.

Which Vendors Commonly Audit

The vendors most likely to audit are those with the most to lose from under-licensing:

• Microsoft – audits Microsoft 365, Windows, and server products. Microsoft runs compliance checks regularly.
• Adobe – audits Creative Cloud and Acrobat deployments, particularly in design and marketing firms.
• Salesforce – checks user counts against contracted seats.
• SAP and Oracle – less common in very small businesses, but they do audit mid-sized companies.

If you use any of these, it is worth assuming you could be audited at some point.

What They Ask For

A typical audit request includes:

• A list of all installations of the vendor’s software across your devices
• Proof of purchase for each licence
• The number of users assigned to each product
• Access to run a scan or review your admin console

The vendor may send a self-declaration form, or they may ask to run a discovery tool on your network. Either way, they want to compare what you have installed against what you have paid for.

How to Prepare

The best preparation is to keep records as you go, rather than scrambling when an audit notice arrives.

Keep licence records. For every software purchase, store the invoice, the licence agreement, and the number of seats. This applies to both annual and monthly subscriptions.

Track deployments. Know which devices or users have which software installed. If you use Microsoft Intune or Google Workspace, your admin console already holds this information. For desktop software, keep a manual list.

Document purchases. If you buy licences through a reseller, keep the reseller invoices. If you buy direct, keep the order confirmations. Store them somewhere you can find them in a hurry.

Review annually. Once a year, compare what you are paying for against what is actually deployed. This is the same process described in the article on cutting software costs, and it serves double duty here.

What to Do If You Are Audited

If you receive an audit notice:

• Do not ignore it. Responding late makes things harder.
• Nominate one person to deal with the vendor.
• Gather your licence records and deployment data before responding.
• If you find gaps, address them before the audit concludes. Buying the licences you are short on before the audit closes is usually better than waiting for the vendor to find the shortfall.
• If the audit feels heavy-handed or you are unsure of your position, consider getting advice from an IT consultant or your reseller.

Practical Takeaways

• Keep invoices and licence agreements for every software purchase.
• Track which users and devices have which software installed.
• Review your licence position at least once a year.
• If audited, respond promptly and nominate one person to handle it.
• Being prepared means the audit is a paperwork exercise, not a crisis.