The Microsoft EA True-Up Process

How the true-up works

An Enterprise Agreement commits you to a minimum baseline of enrolled products and user counts. Each year, on your anniversary, you reconcile actual deployment against the baseline. Increases are trued-up at your EA's anniversary pricing; decreases generally cannot reduce below baseline, though there are structured exceptions. The true-up is processed through your Microsoft Licensing Solution Provider (LSP), not directly with Microsoft.

What you owe vs. what the LSP bills you

These are not automatically the same number. The LSP pulls usage reports from your tenant and calculates billable additions. Errors are common: departed employees still active in Entra, shared mailboxes counted as users, service accounts counted as users, duplicate accounts across entities after M&A. Our engagement data shows 8%–15% of initial true-up bills contain contestable lines in the first pass. Always require a reconciliation with named users, not just a headline count.

Timing: when the work actually starts

The true-up work should begin 90 days before anniversary, not on the anniversary. By 60 days before: pull current usage data, compare to baseline, identify the additions. By 45 days: deactivate departed users, convert shared/service accounts, consolidate duplicates. By 30 days: have the preliminary true-up number. The last 30 days is for LSP reconciliation and dispute resolution. Compressed timelines are where buyers overpay.

Anniversary pricing protection

True-up billing uses the pricing locked in your EA at signature — not Microsoft's current price list. This is a significant benefit in inflationary periods. Verify this explicitly each year; LSPs occasionally bill at current list and wait to see if the buyer notices. Price checks against your original EA pricing sheet should be a standard audit step every year.

Seat recovery: where most overpayment sits

Five specific targets recover the most in a typical true-up: (1) departed employees still carrying licenses; (2) employees on leave over 90 days; (3) users downgraded role-wise but still on E5; (4) licenses on shared mailboxes; (5) service and resource accounts incorrectly attributed as users. Run each of these as a separate query against Entra ID and Microsoft 365 admin center 45 days before anniversary.

Product attribution errors

Microsoft's usage reports sometimes attribute a user to a higher SKU than the one actually assigned — particularly in cross-tenant or guest access scenarios. These attribution errors show up as 'usage' on E5 when the user is licensed E3. Always cross-check attribution against the license assignment report, not just the usage report.

Downward adjustments: the narrow path

An EA baseline cannot generally be reduced below its signed level. But you can add a qualifying event — divestiture, workforce reduction, program discontinuation — that creates a contractual basis for reduction. These conversations must happen 120 days before anniversary with Microsoft directly, not via the LSP. The path exists; it is just not automatic.

What to document and why

Every true-up is evidence in the next audit. Keep, for a minimum of 7 years: the usage reports used to calculate true-up; the license assignment reports used to reconcile; dispute correspondence; final invoice; pricing proof. These artifacts are your primary defense when a later SAM revisits historical compliance.