Software licensing: staying ready for an audit without overpaying.

Licensing mistakes cost money in both directions: overspending on unused seats, or facing a bill after an audit for software used without entitlement.

Know your position

Reconcile three lists: what you bought, what is installed or assigned, and what is actually used. Gaps reveal both risk and waste.

Understand the model

Licences vary: per user, per device, per core, per subscription, perpetual with maintenance, or consumption-based. Virtualisation and cloud change the counting rules, so read the terms for each product.

Keep proof

Retain invoices, order confirmations, licence agreements and entitlement records. Store them with the asset register so they are found when needed.

Control the installs

Restrict who can install software. Use device management and application controls so unlicensed or unwanted software does not spread.

Plan renewals

Track renewal dates and decide in advance: renew, reduce, replace or retire. Last-minute renewals lose bargaining power.

Right-size

Remove inactive accounts, downgrade editions where features are unused, and consider alternatives for rarely-used expensive tools.

Open-source and free tools

Free does not always mean free for commercial use. Check the terms.

When an audit arrives

Stay calm, ask for the scope in writing, gather evidence and bring in an adviser. A prepared register turns a stressful event into a routine one.