A true up and an audit feel similar but work in opposite directions. Here is how each one is triggered, who runs it, and why confusing them costs money.
A true up and an audit both end with you paying Microsoft for use it says you have. They feel like the same event. They are not. One is a routine part of your agreement that you initiate and control. The other is a verification that Microsoft initiates and that runs to a contract penalty clause. Treating a true up like an audit overpays, and treating an audit like a true up underprepares.
A true up is the annual reconciliation built into an Enterprise Agreement. Across the year you add users and devices, and the true up is where you report that growth and pay for it. You count it, you submit it, and you pay at your agreed pricing. It is a self reported, routine process that you run on your own timeline within the agreement. There is no auditor, no penalty multiplier, and no verification firm. The risk in a true up is not punishment. It is overcounting and paying for use you do not actually have.
A true up is you reporting your own growth at your own prices. An audit is Microsoft verifying your whole position with its own methodology and a penalty clause attached. Same invoice feeling, opposite mechanics.
An audit is verification, not reconciliation. Microsoft verifies licensing three ways. A SAM engagement is voluntary and sales led. A self verification is a contractual demand you cannot decline. A formal audit runs through a third party accounting firm under the MBSA audit clause, and the firm produces an Effective License Position that reconciles your deployment against your entitlement. The audit is run on Microsoft's methodology using its own data from Azure, Microsoft 365, and management tooling. And it carries the clause that a true up does not: when unlicensed use reaches 5 percent or more of total use, you reimburse verification costs and acquire licenses at 125 percent of price.
| Dimension | True up | Audit |
|---|---|---|
| Who starts it | You, on your timeline | Microsoft, on its timeline |
| What it counts | Your growth this period | Your whole position over a lookback |
| Who runs it | Your team, self reported | Microsoft or a third party firm |
| Pricing | Your agreed price | Up to 125 percent of price on the gap |
| Penalty | None | The 5 percent clause and verification costs |
The pricing row is the one that decides money. A true up is paid at your price. An audit gap at or above the clause threshold is paid at a premium plus costs. The same number of licenses can cost very differently depending on which process you are in.
The confusion runs in both directions, and each direction has a price.
The defensive habit is the same for both: know your real position before you report anything. For a true up that means not overpaying. For an audit that means not walking into the clause unprepared.
The two are connected. In 2026 Microsoft uses anomaly detection across licensing and telemetry to choose audit targets, and a true up is a signal. A sudden jump in reported users, a mismatch between what you report and what telemetry shows, or a pattern that looks like catching up can all raise the risk that verification follows. Reporting an accurate, well evidenced true up is itself a defensive act, because it removes the anomaly that would otherwise invite a closer look. Renewals work the same way, which is why a clean position matters at every annual touchpoint.
Knowing which process you are in is the first move, and knowing your real position is the second. Our guide on the Microsoft audit survival guide sets out how the verification tracks work, and the related articles below cover how an audit differs from a true up in practice and what levers move a true up outcome. Download the guide and count from a defended position, not a cautious guess.
If you want a second set of eyes first, we challenge inflated counts through our EA true up defense work.
Download the guide and count from a defended position. Fixed Fee from $18,000 or Gainshare, both backed by our guarantee.
Download the Microsoft Audit Survival GuideWeekly intelligence on Microsoft and SPLA audit moves and the buyer side defenses that work.