An Enterprise Agreement is built around a yearly ritual called the true up. Once a year you count the licensed products you have added since the agreement started or since the last true up, and you pay for the increase. It sounds like simple accounting, and that is exactly why it is dangerous. Treated as a form to fill in, the true up quietly converts a year of growth, project servers, new hires, and expanded services into a single invoice that few people inside the business ever question. This article explains how the true up works, why it so often overstates what you owe, and how a buyer side defense keeps it honest.
For the wider picture of how Microsoft verifies and bills licensing across audits and agreements, the Microsoft Audit Survival Guide sets out the full landscape. Here we focus on the true up itself.
What the true up actually is
Under an Enterprise Agreement you license a baseline at the start and then report increases each year. The true up captures the net additional quantity of each licensed product over the year and prices it. You pay for the added licenses going forward, and you confirm the new baseline for the year ahead. A true up is not an audit. It is a self report you submit, which is precisely why the accuracy of your own count matters so much. Nobody from Microsoft rebuilds your number in a routine true up. They take the figure you give them, and if that figure is inflated, you simply pay more.
A true up is a self report, not an audit. Whatever number you submit is the number you pay, so the number has to be right.
Why true ups tend to overstate
Left to run on autopilot, a true up almost always counts too much. The reasons are structural rather than malicious, and they recur across organizations.
- Project and test servers that were stood up during the year and never decommissioned still show in tooling and get counted as permanent additions
- Staff who left are not always removed from user counts, so departed employees inflate the per user products
- Entitlements you already hold, through prior purchases, downgrade rights, or an acquisition, are not netted against the new deployment
- The agreement may not require you to true up certain reductions, yet additions are reported without testing whether offsetting rights exist
- Edition and product mapping defaults to the higher cost option when the records are unclear
Each of these pushes the reported quantity up. None of them is caught by simply running the standard report, because the standard report counts what is present, not what is genuinely a new, licensable, net addition.
The true up and the audit are connected
Buyers sometimes treat the true up and the formal audit as separate worlds. They are not. The figures you submit at true up become part of your licensing history, and an inaccurate true up can both overpay in the moment and create inconsistencies that draw attention later. In 2026 Microsoft uses anomaly detection across licensing and telemetry to select audit targets, and a true up that does not reconcile with the telemetry Microsoft already holds is exactly the kind of mismatch that raises risk. Getting the true up right is therefore both a cost control and a way to avoid becoming an audit candidate.
A worked illustration
Consider an organization that ran the standard report and found 600 additional units to true up. The figures here are indicative and used only to show the mechanics.
| Step | Units | What changed |
|---|---|---|
| Standard report | 600 | Everything tooling counted as added |
| Remove decommissioned and test systems | 470 | 130 systems no longer in service |
| Remove departed users | 420 | 50 leavers still in the user count |
| Net against existing entitlements | 340 | 80 already covered by held rights |
The same estate produces a true up of 340 units rather than 600 once the count is cleaned and netted against rights already held. At an indicative price the difference is the cost of 260 units the organization would otherwise have paid for without owing them. The work is not aggressive. It is simply reporting what the agreement requires rather than what the default report produces.
How a buyer side defense runs the true up
Defending a true up follows the same discipline as defending an audit position, only with the advantage that you control the timing and the submission.
Where this leaves you
The annual true up is one of the few moments where you control your own number, and that control is worth using. A true up run on autopilot reports growth without testing it, and the result is an invoice for licenses you may not owe and a record that may not reconcile with Microsoft's own data. Treated as a defensible report, built from real additions, netted against held rights, and mapped to the correct products, the true up becomes a routine event rather than an annual surprise.
To see how the true up fits inside the wider audit landscape and how to keep both honest, download the Microsoft Audit Survival Guide and use it to pressure test your next submission before you send it.
If you would rather not face that alone, our EA true up defense team verifies the numbers before they become contractual.