How an Audit Differs From a True Up
An audit and a true up both end with you paying Microsoft, but they are different events with different rules and different defenses. Treating one as the other is how money leaks.
Two Microsoft events ask you for money based on what you are using, and companies routinely confuse them. An audit and an Enterprise Agreement true up share a surface resemblance, yet they run on different mechanics and reward different responses. If you treat a true up like an audit you create friction you do not need. If you treat an audit like a true up you concede ground you should defend.
What a true up actually is
A true up is a contractual step inside an Enterprise Agreement. The agreement lets you deploy as you grow and reconcile once a year by reporting the increases and paying for them. It is routine, it is expected, and it is built into the deal you signed. The true up is a count of additions since the last reconciliation, priced at your agreed terms.
What an audit is
An audit is a verification exercise, not a routine reconciliation. It can run through a SAM engagement, a self verification, or a formal audit through a third party accounting firm under the MBSA clause. It produces an Effective License Position covering your whole estate, and it carries a penalty structure a true up does not.
A true up prices new use at your agreed rate. An audit can invoke the contract clause that applies when unlicensed use reaches 5 percent or more of total use, which requires you to reimburse the cost of the audit and acquire licenses at 125 percent of price. The same gap can cost very differently depending on which event surfaces it.
Where the two diverge
| Dimension | True up | Audit |
|---|---|---|
| Nature | Routine annual reconciliation | Verification of compliance |
| Scope | Additions since last report | Whole estate against entitlement |
| Who runs it | You report to Microsoft | Microsoft or a third party firm |
| Pricing | Your agreed rate | Standard, or 125 percent if the clause applies |
| Penalty risk | None by design | Audit cost plus uplift if the clause applies |
Why the confusion costs money
The confusion runs both ways. Some companies treat a true up as adversarial, withholding information and creating friction with an account team during what is meant to be a routine step. Others treat an audit as a true up, reporting figures from a tool export without testing them, and walk straight into the 125 percent clause. Both errors come from not naming the event correctly.
The right response to each
For a true up, the goal is to report accurately and avoid paying for use you have retired. Decommissioned servers, reduced user counts, and reassigned licenses all reduce the number, and they are easy to miss if you report from a stale inventory. Right sizing before you submit is the whole game.
For an audit, the goal is to control the data, rebuild the Effective License Position from your own records, and hold the 5 percent line. The draft is negotiable. The penalty structure makes the defense worth far more than the effort it takes.
When the two collide
The hardest situations arise when an audit lands near a renewal or a true up, because Microsoft can try to fold a finding into the new commercial terms. That is precisely when buyer side discipline matters most. A finding settled inside a renewal can raise your run rate for years, long after the audit is forgotten.
Get the event named correctly
The first thing we do is name the event you are facing and apply the right defense to it. We sit on your side of the table, never the vendor's. Whether it is a true up to right size or an audit to defend, we make sure you do not pay audit prices for a routine reconciliation, or give an audit the light attention you would give a routine step.
Facing a true up or an audit?
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