The true up is a one way count, so the control sits in the year before it
An Enterprise Agreement lets you deploy now and reconcile later, and the true up is that reconciliation: an annual order for everything added above the baseline. What it will not do is take anything back. Reductions wait for the renewal, which means every seat provisioned and forgotten during the year arrives at the count as recurring cost you have already committed to.
Prepared by Redress Compliance · August 10, 2026 · Microsoft advisory. Based on 35 to 45 Microsoft EA true ups reviewed, 2024 to 2025.
Executive summary
The standard true up adds only, and that asymmetry is the whole commercial problem. Your EA fixes a baseline quantity at signing; through the year you add users, devices, and products; and the true up reports the increase at your agreed price level for the remaining term.
You cannot drop licences you over deployed. Reductions wait until renewal, when the baseline can be reset, so uncontrolled growth through the year converts straight into recurring cost that then has to be carried to the end of the term.
6 in 10 true ups included seats provisioned for projects that had already ended. The count almost always reflected uncontrolled growth rather than deliberate demand, because provisioning is a five minute task with no budget gate attached while deprovisioning has no owner at all.
Nothing in the EA mechanics catches this: the agreement is designed to let you move fast and settle later, and settling later means settling at whatever the estate happens to look like on the anniversary.
Reclaiming leaver and dormant accounts before the count cut the addition 8 to 18 percent. That is the single highest return action in the process and it is entirely internal, requiring no negotiation and no vendor conversation.
Compare assigned licences against active users through the year using admin reporting rather than at the point of submission, because a licence reclaimed before the anniversary is simply not counted while the same licence reclaimed after is a reduction you cannot make until renewal.
Buyers who reconciled only after submitting the order overpaid against those who counted first. The submission is the moment the number becomes contractual, so the reconciliation belongs before it rather than after.
The true up also has to be read alongside the renewal: the final year count closes out the term, and every quantity carried into it becomes the baseline the renewal negotiates from, which is why the annual count and the renewal strategy cannot be run by different people to different calendars.
What moves at the true up, and what waits for renewal
| Action | At true up | At renewal |
|---|---|---|
| Add licences | Yes, reported annually | Yes |
| Remove licences | No, not in the standard true up | Yes, reset the baseline |
| Change products | Add new, keep existing | Restructure the whole mix |
| Reset the price level | No | Yes, with the volume position |
The mechanics are simple and the consequence is not. The baseline is the licensed quantity fixed at the start of the term, additions are the users, devices, and products added since the last count, and the order settles the net difference at your agreed price level for the remaining term.
Because only the addition is reported, every reclamation has to happen before the count to have any effect at all, and everything missed compounds: a seat added in year one is paid in years one, two, and three of the term.
The renewal is the only place the baseline resets, which is why the annual count is really a renewal preparation exercise wearing an administrative disguise. The wider agreement mechanics sit in the EA pillar and the renewal sequence in the EA renewal playbook.
Preparing the count, in the year rather than the week
- Track assigned licences against active users continuously, using admin reporting rather than pulling a single extract in the month before the anniversary.
- Reclaim leaver accounts on a defined cadence, because a departed user's licence keeps consuming entitlement until somebody removes it and nothing in the EA prompts anyone to.
- Sweep project provisioned seats when the project closes, since 6 in 10 true ups in our file carried seats for work that had already finished.
- Reconcile before you submit, not after, because the order is the moment the quantity becomes contractual for the remainder of the term.
- Align the count with the renewal strategy, as every quantity carried into the final year true up becomes the baseline the renewal negotiates from. The optimizer sits at M365 license optimizer.
The Microsoft EA renewal playbook
The renewal framework, the SKU structure, the true up to renewal handoff, and the buyer side moves that reset a baseline built by three years of drift.
Get the white paper →The link between the annual count and the renewal
The true up looks like an administrative obligation and behaves like a commercial one, because the quantities it settles become the starting position for everything that follows.
Each annual count adds to a baseline that only the renewal can reduce, so an estate that drifts upward for three years arrives at its renewal negotiating down from a number it never deliberately chose.
That is the mechanism by which EA costs ratchet: no single year looks unreasonable, and the cumulative effect is a licensed population materially larger than the working one. The counter is unglamorous and it runs on a calendar rather than in a meeting.
Reclaim leaver and dormant accounts on a defined cadence through the year, sweep project provisioned seats when the project closes rather than when somebody notices, and compare assigned licences against active users continuously so the gap is visible while it is still cheap to close.
Then reconcile before submitting the order, because after submission the quantity is contractual for the remainder of the term and the only remedy left is the renewal.
Buyers who did the reconciliation first cut the addition by 8 to 18 percent in our file, and the work required no negotiation with Microsoft at all. Where the estate is moving to a different agreement structure entirely, the transition mechanics sit in the EA to MCA renewal guide.
- Percentile standing for your exact deal size and industry, from real closed transactions
- Scenario simulation before the call: test alternative terms and see the financial impact of each
- A negotiation playbook, talking points, and a two page executive brief on day one
What we saw across Microsoft EA true ups, 2024 to 2025
Across roughly 35 to 45 Microsoft EA true ups we reviewed between 2024 and 2025, the count almost always reflected uncontrolled growth rather than deliberate demand:
Reduction in the true up addition achieved by pulling leaver and dormant accounts before the count rather than after the order.
True ups that included seats provisioned for projects which had already ended, paid for the remainder of the term.
Three patterns recurred: reclaim upside, where clients that pulled leaver and dormant accounts before the count cut the addition 8 to 18 percent; sprawl by default, where 6 in 10 true ups included seats provisioned for finished projects.
And late reconciliation, where buyers who counted only after submitting the order overpaid against those who reconciled first.
The buyer side move is to treat the true up as the last day of a year long control rather than as an event in itself. Right sizing through the year is where the money is, because the standard count only adds, and everything it adds is carried to the end of the term.
The full library sits in the Microsoft practice.
Your first five moves
- Compare assigned licences against active users continuously, not in the month before the anniversary, because the gap is only cheap to close while the count is still open.
- Reclaim leaver and dormant accounts on a defined cadence with a named owner, which cut the addition 8 to 18 percent in our file and requires no vendor conversation.
- Sweep project provisioned seats at project close, since 6 in 10 true ups carried seats for work that had already ended and then paid for them to term end.
- Reconcile before submitting the order, because submission makes the quantity contractual for the remaining term and the only remedy after that is the renewal.
- Run the count and the renewal to one plan, as the final year true up closes the term and sets the baseline the renewal argues from. The Microsoft practice runs both with you.
Frequently asked questions
What is a Microsoft EA true up?
The annual reconciliation in an Enterprise Agreement. The EA lets you deploy now and settle later, and the true up reports the licences added above your baseline each year, ordered at your agreed price level for the remaining term.
It falls on the EA anniversary, with the order usually submitted shortly before it.
Can you remove licences at a true up?
No, not in the standard process. The true up adds only, so licences you over deployed cannot be dropped at the count. Reductions wait until renewal, when the baseline can be reset.
That asymmetry is why uncontrolled growth through the year converts straight into recurring cost carried to the end of the term.
How is the true up calculated?
You count the net increase in licensed quantities and any new products since the last count, then order the difference at your agreed price level for the remaining term.
The product terms define how each product is counted, and the admin reporting is where assigned licences are compared against active users to build the reconciliation.
How much can preparation save?
In our file, clients that pulled leaver and dormant accounts before the count cut the addition by 8 to 18 percent.
It is the highest return action in the process and it is entirely internal: a licence reclaimed before the anniversary is simply not counted, while the same licence reclaimed afterwards is a reduction you cannot make until renewal.
Why do true ups include seats nobody uses?
Because provisioning is quick and has no budget gate, while deprovisioning has no owner. In 6 of 10 true ups we reviewed, the count included seats provisioned for projects that had already ended.
Nothing in the EA mechanics catches this, since the agreement is designed to let you move fast and settle later at whatever the estate looks like.
When should the reconciliation happen?
Before the order is submitted, and ideally as a continuous control through the year.
Buyers who reconciled only after submitting overpaid against those who counted first, because submission is the moment the quantity becomes contractual for the remainder of the term and the only remaining remedy is the renewal.
How does the true up connect to the renewal?
Every quantity carried into the count becomes part of the baseline the renewal negotiates from, and the final year true up closes out the term.
An estate that drifts upward for three years arrives at renewal negotiating down from a number it never deliberately chose, which is exactly how EA costs ratchet without any single year looking unreasonable.
