The Microsoft EA true up process, step by step. Two dates and one count decide the bill.

Your true up order must reach Microsoft between 60 and 30 days before the enrollment anniversary, so the count has to freeze weeks earlier. The calendar and the Qualified User reconciliation set most of the cost, long before any call with Microsoft.

How does the Microsoft EA true up process work?

Once a year, you report to Microsoft every Qualified User and Qualified Device added to your Enterprise Products since the last filing, plus any growth in Additional Products. The additions are priced at your enrollment's terms, and the order has to reach Microsoft between 60 and 30 days before the enrollment anniversary.

That filing takes one of three forms. Each one carries its own way to overpay, and none of them is fixed on the call with the account team.

The three filings, and the trap in each

• The true up order. Net additions across the year, priced at the enrollment's terms. The trap is unexamined growth: departmental requests that added seats without anyone checking them against leavers and role changes.
• The Update Statement. The filing for a year with no growth. The trap is assuming no growth means no paperwork. The statement is mandatory, and a missing one is a compliance breach that tends to surface at renewal or in an audit.
• The Reserved License order. Online Services seats reserved ahead of use, with payment deferred to the next true up. The trap is a reservation dated months before the rollout, which bills for licenses no one is using yet.

What Microsoft counts

The enrollment defines a Qualified User as a person, including employees, consultants and contingent staff, who uses a Qualified Device or accesses server software needing an Enterprise Product CAL or any Enterprise Online Service. People covered only by the Qualified User exemptions listed in the Product Terms are left out.

A Qualified Device is a desktop, laptop, workstation or similar device able to run Windows Pro locally, or a device used to reach a VDI. The exclusions cover servers not used as personal computers, Industry Devices that run only an industry or task specific program, and devices your organization does not manage.

When is the Microsoft true up due, and when does the count freeze?

The true up order or Update Statement must be received by Microsoft between 60 and 30 days before each enrollment anniversary. On an August 1 anniversary, that window runs from June 2 to July 2.

The working deadline comes earlier. The order form only records what your reconciliation already decided, so the count has to freeze in early May, and every Qualified User dispute, device reconciliation and departmental correction has to be settled before then.

We start the reconciliation 120 days before the anniversary, which is early April on this calendar. For any organization with active hiring, contractors or acquisitions, that is the latest start that still leaves a month to settle disputes before the freeze.

What changes in the final year?

In the last year of the enrollment the order is due within 30 days before the expiration date, and Microsoft will not accept license reservations placed inside that 30 day period. The final true up then sits in the same weeks as the renewal, so a clean count strengthens your hand in both.

What happens if the order is late?

Under the enrollment's late filing clause, Microsoft may invoice every Reserved License not yet invoiced, and any subscription reductions you planned cannot be reported until the following anniversary, or the renewal. A missed window turns a year of possible reductions into a year of paying for them.

When do Reserved Licenses start billing?

Reserved Licenses bill from the month they are reserved for, whatever month the rollout actually happens. The enrollment invoices them retrospectively to that month at the next true up, and every reserved license is charged whether anyone uses it or not.

A reservation dated January for a March rollout therefore invoices January and February for seats no one signed into. The cost comes from administrative habit, and matching the reservation date to deployment recovers it with nothing more than sequencing.

How to set the reservation date correctly

• Where it lives. Reservations sit in the Microsoft 365 admin center under Billing, Your products, the Volume licensing tab, then Reservations.
• Date it forward. The usage date can be today or up to 6 months ahead, so reserve in January with a March usage date.
• Cancel early. A reservation canceled more than 72 hours before its usage date is not invoiced. If a rollout slips, cancel and rebook with the new date before that cutoff, because reservations cannot be edited.
• Watch the end of term. No reservations can be placed within 30 days of the agreement's end date.

What do you file in a year with no growth?

You file an Update Statement instead of a true up order. It is required when your Qualified User and Qualified Device count for Enterprise Products has not changed and your use of Additional Products has not grown. Filing nothing is a compliance breach, and it tends to come up at the worst moment, the renewal or an audit.

Your reseller or Microsoft seller submits it on the same timetable as an order. Any subscription reductions for the coming year are reported with it, so a missed statement also costs you the reductions.

Can you reduce licenses at the true up?

Subscription licenses can be reduced at the enrollment anniversary, going forward only. For an enterprise wide purchase the reduced total must still cover the Qualified Users and Devices on your Product Selection Form plus every one added in prior true up orders.

The second condition works as a ratchet. Each seat you add at true up raises the floor below which you cannot reduce for the rest of the enrollment.

Why we disagree with truing up high to be safe

A common suggestion, often from resellers, is to report a generous count and treat the surplus as audit insurance. We disagree, because on enterprise wide subscriptions that surplus joins the reduction floor and is paid for in every remaining year of the term.

File the reconciled count instead, and keep the evidence behind every exclusion, dated and tied to the definition text. That record protects you in an audit far better than a padded number.

Who counts as a Qualified User, and which edges are worth arguing?

Everyone who meets the enrollment definition counts, and the argument is about who meets it. The edges worth working are consistent from one organization to the next, and together they are routinely the largest single correction in the filing.

• Leavers not yet deprovisioned. Accounts that still hold a license weeks after the HR exit date.
• Contractors under a different construct. Staff whose access runs through a separate arrangement and who may not meet the definition at all.
• Kiosk and shared device populations. Devices that may qualify as Industry Devices, and workers whose licensing sits outside the Enterprise Product count.
• Acquired units on their own agreements. Under current enrollment wording, affiliates acquired after the enrollment starts generally sit outside the Enterprise until you choose to include them. Check the Enterprise definition in your own enrollment before counting them.
• Unmanaged and server devices. Machines that fall under the Qualified Device exclusions but were swept into an inventory count.

Each edge argued before the freeze is a line item recovery. Argued after it, the same edge is a concession already filed.

How to check your own count

Build the count from data you control, then compare it with what Microsoft sees. We use four sources, run on a schedule that finishes before early May:

1. Microsoft Entra ID. Export enabled accounts with their last sign in date, and flag any account inactive for 30 days or more.
2. The HR system. Join leavers, joiners and contractor records to the directory export on employee ID, never on display name.
3. Microsoft Intune or Configuration Manager. Pull the device inventory, then mark servers, Industry Devices and unmanaged machines against the exclusions.
4. Microsoft 365 admin center usage reports. Check assigned licenses against active use, which is the same check the license optimizer automates on the seat side.

Document each disputed category against the definition text before you freeze. This is the same reconciliation the renewal needs, run annually in miniature, so organizations that treat the true up as a renewal rehearsal reach the renewal with three years of clean counts and the twelve negotiation points already half worked.

What does a loose true up cost a 5,000 seat organization?

Ordinary slippage in the count reaches six figures before anyone negotiates anything. Take a hypothetical company with 5,000 Microsoft 365 E3 users, priced at the $39 per user per month list price for E3 with Teams, or $468 a year. Your EA price sheet will differ, so replace the unit price with your own.

The two recurring lines are worse than they look. On an enterprise wide subscription, true up additions raise the reduction floor, so the 270 excess seats stay on the enrollment for the remaining term unless the count is corrected before it is filed.

The negotiation call is the last step. By the time anyone is on the phone, the count is frozen and the order forms are drafted.

Do EA price levels still matter for the true up?

For on premises products they do, and for online services they no longer do. Microsoft set a single price across Levels A to D for all online services in the EA and MPSA, applied from November 1, 2025 at each customer's next renewal or on new online services not already on the price sheet.

Levels B, C and D still band on premises licenses and Software Assurance, while Microsoft 365 prices at Level A for everyone. On premises additions therefore still earn banded pricing and seat additions do not, which changes what growth costs and where reconciliation effort pays most. The full agreement mechanics sit in our EA guide.

What happens below roughly 2,400 seats?

Microsoft may not offer the EA renewal at all, and it steers that population toward CSP and MCA-E, as our CSP and NCE transition guide explains. For organizations near that line, each true up is also a data point in Microsoft's routing decision, and transition terms negotiate far better when you raise them before Microsoft announces them.

What will the Microsoft account team say about the true up?

Most lines you will hear are reasonable on their face and cost money if accepted as offered. These are the ones we hear most, with the reply we give.

• "Reserve the licenses now so you are covered." Reserve now, with a usage date matching deployment, up to 6 months out.
• "Send us the license count from the admin center." Assigned licenses are not Qualified Users. We will send the reconciled count with the exclusions documented.
• "Add a buffer to stay safe on compliance." A buffer on enterprise wide subscriptions raises the reduction floor for the rest of the term. We will file what we can evidence.
• "Price levels no longer apply to you." They no longer apply to online services. Show us the level applied to our on premises additions.
• "Your renewal will move to a new agreement." Then put the transition terms and pricing in writing now, before our next true up.

Terms to ask for at the next renewal

• Price hold on additions. Enterprise Products and Enterprise Online Services are normally price protected for the term. Ask for the same hold on Additional Products and on online services you expect to add, so growth there does not reprice at a later price list.
• Acquisition timing. The option to bring acquired affiliates in at the next anniversary, so a deal closing in month 10 does not force a rushed count.
• Reduction rights. Any room to reduce online services below the prior true up floor, for example after a divestiture.
• Transition commitments. Written pricing and terms for CSP or MCA-E if Microsoft will not renew the EA.

What to do next

1. At the start of the enrollment year. Work the calendar backward from the anniversary and put the reconciliation start, count freeze and order window in the diary.
2. 120 days out. Start the Qualified User reconciliation, with directory data joined to HR records and each edge documented against the definitions.
3. Before the freeze. Settle every dispute, including leavers, contractors, shared devices and acquired affiliates, then lock the spreadsheet.
4. Whenever you reserve. Date each Reserved License to the deployment month, because the reservation month is the billing month.
5. In the order window. File the true up order, or the Update Statement in a year with no growth, and report any subscription reductions.
6. Every year. Treat the true up as a renewal rehearsal, and if you are near the seat line where Microsoft may not renew, open the transition terms early. Our Microsoft practice can run the calendar with you.

Frequently asked questions