True up Enterprise Agreement

A true up enterprise agreement is a term used in the software industry to refer to a process of reconciling the number of software licenses used by a company against the number of licenses purchased.

It is a crucial step in managing software compliance and ensuring that a company is not breaching any licensing agreements. Here’s everything you need to know about true up agreements.

What is a True Up Enterprise Agreement?

A true up enterprise agreement is a contractual agreement between a software vendor and a company that allows the company to purchase a set number of software licenses in advance at a discounted rate. The company then has the option to purchase additional licenses if needed, typically at a higher rate than the original purchase.

The true up process occurs annually or semi-annually, depending on the terms of the agreement. During this process, the company is required to report the actual usage of the software and purchase additional licenses to cover any excess usage.

Why is a True Up Enterprise Agreement Important?

A true up enterprise agreement is crucial for software compliance. Without it, companies risk using more software than they are licensed for, which can lead to costly fines and legal action.

In addition to compliance, a true up enterprise agreement also helps companies manage costs. By purchasing software licenses in advance at a discounted rate, companies can save money on software expenses. And by conducting regular true up processes, companies can identify and address any discrepancies in their licensing agreements before they become major problems.

How to Conduct a True Up Process

Conducting a true up process requires careful planning and attention to detail. Here are the steps to follow:

1. Determine the Reporting Period: The first step in the true up process is to determine the reporting period. This will typically be defined in the enterprise agreement and may be an annual or semi-annual period.

2. Gather Usage Data: The company must gather usage data for the reporting period, which may include data from software usage reports, employee surveys, or other sources.

3. Compare Data to Licenses: Once the usage data has been gathered, the company must compare it to the number of licenses purchased. If there are any discrepancies, additional licenses must be purchased to cover the excess usage.

4. Purchase Additional Licenses: After identifying any excess usage, the company must purchase additional licenses to cover it. This may involve negotiating with the software vendor to ensure that the company receives the best possible pricing.

5. Update License Records: The company must update its license records to reflect the additional licenses purchased and ensure that the record accurately reflects the current licensing status.

In conclusion, a true up enterprise agreement is a crucial step in managing software compliance and ensuring that a company is not breaching any licensing agreements. By conducting regular true up processes, companies can identify and address any discrepancies in their licensing agreements before they become major problems.