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Software License Audit

Keeping your company’s software licensing in compliance

The right software enables organizations to operate efficiently, remain competitive, meet client expectations, adapt to change, and overall achieve their business goals. In today’s world, most software is obtained through licensing agreements. To ensure that a company complies with the licensing agreements they signed up for, an organization must undergo regular audits comparing the number of licenses purchased to those in use.

A software license audit is a process conducted by an organization to assess and verify its compliance with the terms and conditions of software license agreements. The audit can be as simple as pulling together a complete listing of all software an organization uses to build the following year’s budget or a more formal inquiry performed by internal or external auditors familiar with software use. It can be conducted at various times, depending on the organization’s needs, industry regulations, contractual obligations, and internal policies.

Other Manage services:

  • IT budgeting & reporting
  • KPI creation & reporting
  • Risk management
  • Vendor management
  • 1,3,& 5 year roadmaps

What happens if you don’t pass a software license audit from your original equipment manufacturer?

  • Financial penalties: A failed audit is often accompanied by a large bill. Companies are expected to pay for the missing licenses, usually without any discount applied. Among companies audited by their software vendors in the past three years, 64% were charged additional fees for non-compliance. A significant percentage, 35%, had to pay $100,000 or more to achieve compliance with the vendor, while 10% were charged $1 million or more in fees.
  • Software maintenance contract: There will be a software maintenance contract added to cover the new licenses.
  • Legal consequences: If the matter goes to court, your company may be held liable for breach of contract and copyright infringement, whether or not the infringement was intentional.
  • Reputation damage: The consequences of software non-compliance can cause irrevocable harm to a company if not addressed — resulting in regulatory scrutiny, hefty financial penalties, and damage to its reputation and credibility.
  • Vendor-initiated audits: There is the potential for vendor-initiated audits to be costly and time-consuming.

It’s important to note that these consequences can vary depending on the specific terms of the software license agreement and the nature of the non-compliance. Therefore, it’s crucial for companies to understand their software license agreements and ensure they comply to avoid these.

 

Calvetti Ferguson Software License Audit Process

  1. Identify software assets: The first step is to identify all the software assets within the organization.
  2. Verify software assets: Verify the software assets, including licenses, usage, and rights.
  3. Identify and close gaps: The auditor identifies any gaps that may exist between what exists on the installations, the licenses possessed, and the rights of usage.
  4. Record the results: The results are recorded in a centralized location with Proof of Purchase records.
  5. Take action to close gaps: Any identified gaps are addressed and closed.

Contact us

Calvetti Ferguson works with middle-market companies, private equity firms, and high-net-worth individuals across the country. Regardless of the complexity of the compliance, assurance, advisory, or accounting need, our team is ready to help you. Please complete the form below, and we will follow up with you shortly.