True-up
A true-up is a periodic payment that settles the difference between what you committed to and what you actually used.
Why it matters to a budget owner
Seat-based and usage-based contracts often bill a committed quantity up front and true up later. If you added seats or used more, you pay the difference, sometimes at a higher rate.
True-ups make spend less predictable. Know when they fall and how they are priced before the invoice arrives.
What to record
- When true-ups happen
- How overage is priced
- Whether quantities can go down as well as up
Frequently asked questions
Can a true-up reduce what I pay?
Only if the contract allows quantities to go down. Many contracts only true up upwards.
General working knowledge about commercial contracts, not legal advice. Your own agreement governs.
Glossary
Look up related terms
- Minimum commitmentA minimum commitment is the least you agree to pay or use over a period, whatever your actual usage turns out to be.
- Per-seat pricingPer-seat pricing charges a fixed fee for each user or licence, so the bill grows with headcount.
- Usage-based pricingUsage-based pricing charges for what you consume, such as API calls, storage or compute hours, so the bill moves with usage.