Licence holding: why it matters who holds the licence

Does the client hold the software licence or does the firm? The consequences for price, control, data portability and the departure scenario.

The short answer

There are two models: the client holds the licence and gives the firm access, or the firm holds the licence and serves the client within it. Who holds the licence determines who pays the vendor, who controls the setup, who has the strongest position in a dispute and how a client departure unfolds. Neither model is better by definition, but a firm that lets the choice happen by accident discovers the consequences at the worst possible moment: when a client leaves.

Model 1: the client holds the licence

In this model the business owner takes out a subscription with the software vendor and invites the firm in as accountant or adviser.

Advantages:

• The data and the contract are in the client's name. On departure, the client takes the administration along without anything needing to be handed over.
• The firm has no contractual relationship with the vendor and therefore no payment risk for licences of clients who do not pay.
• For the client it feels like ownership: it is their bookkeeping.

Disadvantages:

• The firm has no control over the setup. The client can change charts of accounts, remove integrations or downgrade the subscription without consulting anyone, and the consequences land on the firm's desk.
• Firm-wide working methods are hard to enforce: every administration can be set up just slightly differently.
• The firm often still pays indirectly, through a higher adviser price, or misses the volume discount a practice licence would have given.
• If the client stops paying the vendor, access can disappear in the middle of filing work.

Model 2: the firm holds the licence

Here the firm signs one agreement with the vendor and runs all client administrations under it. The client gets access through the firm.

Advantages:

• Full control: the firm determines the setup, the charts of accounts, the processing rules and who can access what. That makes uniform working across the whole portfolio possible, and uniformity is where a firm's efficiency comes from.
• Tiered pricing: paying per administration at practice volume is almost always cheaper than the sum of individual subscriptions.
• One point of contact and one invoice stream instead of dozens of separate subscriptions held by as many clients.
• The licence can be part of the firm's own business model: the firm delivers a service including software, instead of hours next to somebody else's subscription.

Disadvantages:

• The client departure becomes more involved: the administration lives in the firm's environment and has to be handed over or exported on departure.
• The firm carries the licence costs, including for clients who pay slowly.
• The client may feel "locked in" to the firm. That feeling is justified if you do not arrange the departure properly, and unjustified if you do.
• The firm effectively becomes both processor and manager of the data and has to live up to that, including arrangements on availability and access.

The consequences side by side

That last row deserves a note. If the firm holds the licence and manages the setup, it is also accountable for that setup: a wrongly configured VAT code is then harder to deflect. That is no reason to avoid the model, but it is a reason to take the setup seriously and to record who configured what.

The client departure scenario

Every licence conversation should start at the end: what happens when the client leaves? In the practice model there are three clean outcomes:

1. Transfer of the administration to the client's own licence or to the new firm, where the vendor supports that.
2. Export of an audit file (XAF), the open items and the document attachments, with which the new package can be filled, see Data migration when changing software.
3. Read-only access for the retention period, so the statutory retention obligation is met even if the administration does not move along, see Record retention obligations.

A firm that arranges these three routes in advance removes the strongest argument against the practice model. A firm that uses data as leverage during a departure wins one invoice and loses its reputation.

What to put in the contract

With the client, usually in the engagement letter or an appendix to it:

• Who holds the licence and what it includes.
• That the data belongs to the client and will be handed over in a common format at the end of the engagement, with the timeframe for doing so.
• What the handover costs: many firms provide the standard export free of charge and only bill for custom work.
• How access and authorisations are arranged, including for the client themselves.
• What happens on non-payment: suspending work is something different from cutting a client off from their own figures.

With the vendor: the export options per administration, the conditions for transferring an administration to another licence, and what happens to the data after the practice contract ends.

Why more and more software is sold through firms

Vendors increasingly choose distribution exclusively through firms, and that is no coincidence. Accounting software with heavy automation only works well when the setup is right and someone reviews the exceptions, and that is exactly what a firm does. The vendor gets one professional counterpart instead of a thousand business owners with support questions, and the firm gets control and margin. Giroo deliberately chooses this model too: the software is offered exclusively through accounting and administration firms, with the firm as licence holder and the client as a user within it.

For the practice owner, the trend mainly means this: the question "who holds the licence" is increasingly answered by the market. All the more reason to arrange the departure scenario and the contractual side properly yourself, because that is where the difference lies between a practice model that retains clients through quality and one that holds them through friction.

Content reviewed: August 2026.

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