True-up
A reconciliation that bills you for what you actually deployed or used above what you licensed, usually settled once a year rather than at the point of use.
Also known as: Licence true-up, Annual true-up
A true-up is the point at which a vendor reconciles what you licensed against what you actually deployed or used, and invoices the difference. It is common wherever software can be installed or seats added faster than purchasing keeps up, so the agreement permits the overuse and settles it later, typically annually and often at list price rather than the rate you negotiated.
True-ups are unwelcome mainly because they are invisible until they arrive. Nothing blocks the extra usage, no invoice reflects it during the year, and the bill lands as a lump sum next to a renewal. Counting seats and installations against entitlement on your own schedule, a quarter before the vendor does it, turns a surprise into a decision: buy the extra properly, or remove what nobody is using.
Related terms
- SaaS (Software as a Service)Software delivered over the internet on a subscription, rather than installed and owned outright, usually billed per seat.
- Software registerA single record of every piece of software an organisation uses, with its owner, cost, renewal date, notice period, and contract.
- Lifecycle statusWhere a tracked contract currently sits in its renewal cycle, from active through the notice window to notice given, expired or cancelled.