---
title: True-Ups
description: A periodic reconciliation billing process where a customer is charged for usage that exceeded their baseline contract commitment. It ensures the compa...
sidebar_position: 20
tags: ['asc-606', 'Revenue']
---

# True-Ups

## The ASC 606 Standard

A periodic reconciliation billing process where a customer is charged for usage that exceeded their baseline contract commitment. It ensures the company is fully compensated for actual value delivered.

## The Real-World Scenario

A client prepaid for 500 software seats but provisioned 550; at the end of the quarter, you must bill them for the extra 50 users.

## The Spreadsheet Breaking Point

Manually comparing expected baseline commitments against actual consumption at quarter-end is labor-intensive and frequently forgotten.

## The Hidden Cost to the Bottom Line

Missed true-ups result in uncollected cash and permanently lost revenue that drops directly off the bottom line.

## How GAAPX Eliminates the Risk

Systematically tracks actual usage against contract entitlements and automatically generates true-up revenue events exactly when thresholds are crossed.