It’s no secret that software audits drain companies of time and money, but the scale of their impact is growing. Our recently published 2025 Survey on Software Audits, commissioned by LicenseFortress and produced by Unisphere Research, reveals that audits are becoming more frequent, with nearly 62% of organizations reporting an audit by a major software vendor in the past year—a sharp increase from 40% in 2023. While most organizations focus on the financial penalties tied to compliance failures, the hidden costs of responding to audits—such as lost productivity, diverted resources, and operational slowdowns—can be just as damaging. Despite their significance, these costs are often overlooked in business planning. This blog explores the survey findings to help organizations understand the full financial burden of software audits.
The Time Investment
Responding to a software audit is rarely a quick process. According to the survey, the median time to resolve an audit is 4.5 months. For more than one-third (36%) of organizations, audits take between three to six months to resolve. For 11% of respondents, the process drags on for six months to a year, and 3% report audits lasting more than a year. While 4.5 months may not sound like an excessive timeframe, the true burden becomes evident when considering the number of employees involved and the cumulative hours dedicated to audit response efforts.
Staffing Requirements
Software audits require significant human resources, often diverting critical personnel from their primary responsibilities for extended periods. According to the survey, the median response for the staffing burden includes:
- An average of 7 employees involved in responding to an audit.
- Approximately 15% of their time over a 4.5 month period is dedicated to audit-related tasks.
- A typical audit consumes over 820 cumulative hours across multiple departments.
- Most commonly involved roles: IT administrators, procurement managers, operations managers, and legal teams, with 25% of audits requiring direct involvement from C-Suite executives.
The involvement of highly skilled personnel, including IT administrators, operations managers, and C-level executives, diverts labor expenses away from revenue-generating and strategic projects, forcing teams to prioritize compliance defense instead. This shift can create bottlenecks in critical operations, delay key initiatives, and disrupt long-term business strategies.
The strain of an audit is not evenly distributed across an organization, and its effects can be felt more acutely in companies with lean teams. Companies that rely on lean teams often feel the burden more acutely, as they have fewer employees available to absorb the additional workload. This means that the overall disruption is not only higher, but also that higher-level executives and senior personnel often take on more responsibility for audit-related tasks. As a result, these key decision-makers spend more hours on compliance instead of focusing on business growth and strategy, further amplifying the opportunity costs. As audits stretch on, employee morale can decline, leading to burnout and inefficiencies. The broader implications extend beyond compliance—audits create an environment where businesses are constantly reactive rather than proactive.
Quantifying the Financial Burden of Audits
Recognizing the time and personnel required to respond to an audit is only the beginning—organizations must also quantify the full financial burden these audits impose. While software vendors often frame audits as standard compliance checks, the reality is that they create significant hidden costs for businesses.
Two key factors drive these costs:
1. Salary Expenses: The Hidden Labor Costs of Audits
Audits don’t increase payroll, but they do redirect labor costs by pulling employees away from their primary responsibilities. IT administrators must review software entitlements, procurement teams negotiate with vendors, finance departments assess potential financial exposure, and executives dedicate time to high-stakes decision-making. The longer an audit lasts, the greater the financial impact of these diverted resources.
To quantify this cost, we calculate:
- The number of employees involved in audit-related tasks.
- Average salaries for affected roles, sourced from industry benchmarks.
- Percentage of time each role dedicates to audit response.
- Audit duration, which compounds salary expenses over time.
By analyzing these factors, organizations can determine the true cost of labor diverted to compliance efforts, rather than revenue-generating activities.
2. Opportunity Costs: The Unseen Consequences
Beyond salary expenses, audits create an even greater burden: lost business opportunities. Every hour employees spend responding to an audit is an hour not spent on high-value initiatives like IT security updates, product development, business process improvements, and customer-facing projects. These disruptions can have long-term consequences, delaying growth, innovation, and operational efficiency.
To measure the financial impact of lost opportunities, we estimate:
- The net benefit employees generate for the organization beyond their salary.
- The total time dedicated to the audit, reducing productivity on strategic projects.
- Industry-specific benchmarks to calculate the revenue impact of stalled initiatives.
By factoring in both direct salary expenses and lost business value, organizations gain a clearer picture of the total financial risk posed by an audit. A data-driven approach ensures companies can plan ahead, manage compliance costs proactively, and make informed decisions about software procurement and licensing strategies.
Use our calculator to gain insights into the true cost of software audits and make informed decisions about your compliance strategy.
Mitigating the Hidden Costs
Organizations can reduce the hidden costs of audits by leveraging proactive solutions and expert guidance. The average engagement with LicenseFortress costs $50,000, yet it helps organizations mitigate $3.2 million in costs. These savings stem not only from addressing compliance challenges but also from identifying optimization opportunities that drive long-term value. Furthermore, the engagement reduces the opportunity costs associated with diverting critical personnel from their core responsibilities. By implementing tools and services tailored to software asset management, businesses can effectively prevent the cascading impact of audits on their productivity and finances.
Software audits are unavoidable, but their impact doesn’t have to be crippling. By understanding and addressing the hidden costs, organizations can better prepare for audits, minimize disruption, and protect their bottom line.
Book a meeting to see how we can help you reduce the financial and operational burden of audits with a proactive compliance strategy.
