Compliance Blog
What Is SOC 2 Certification and Do You Need It?
SOC 2 is a security audit standard created by the American Institute of Certified Public Accountants (AICPA). It is designed for SaaS companies and other cloud service providers that store or process customer data. A SOC 2 audit is conducted by an independent CPA firm. They examine your systems and confirm that you have the right security controls in place. When you pass, you get a SOC 2 report that you can share with customers and prospects.
The word "certification" is used loosely. Technically, SOC 2 produces an audit report, not a certificate. But in practice, when someone says "we are SOC 2 certified," they mean they have a clean SOC 2 Type II report.
Check your SOC 2 readiness freearrow_forwardSOC 2 Type I vs Type II: What Is the Difference?
SOC 2 Type I is a point-in-time audit. It confirms that your security controls are designed correctly at a specific moment. It is faster and cheaper to get, but less meaningful to sophisticated buyers.
SOC 2 Type II covers a period of time, usually 6 to 12 months. The auditor confirms that your controls were actually operating effectively throughout that period. This is what most enterprise customers want to see.
Most companies start with Type I to get something on paper quickly, then follow up with Type II.
The Five Trust Service Criteria
SOC 2 is built around five Trust Service Criteria. Security is mandatory. The other four are optional depending on what your product does.
Security: Controls to protect against unauthorized access. Required for every SOC 2 audit. Covers things like access controls, encryption, monitoring, and incident response.
Availability: Whether your system is available for use as agreed. Relevant if your customers have uptime expectations in their contracts.
Processing Integrity: Whether your system processes data completely and accurately. Relevant for financial or transaction-processing systems.
Confidentiality: Whether confidential data is protected. Relevant if you handle confidential business information.
Privacy: Whether personal information is collected, used, and stored appropriately.
Most SaaS companies only cover Security and sometimes Availability.
Do You Actually Need SOC 2?
SOC 2 is not required by law. The real question is whether your customers or prospects require it.
You probably need SOC 2 if: you sell to enterprise companies (especially in finance, healthcare, or tech), you are losing deals at the security review stage, or a prospect has directly asked for your SOC 2 report.
You probably do not need SOC 2 yet if: you are pre-revenue or very early stage, or your customers are small businesses who do not ask for it.
SOC 2 is ultimately a sales tool as much as a compliance requirement.
How Much Does SOC 2 Cost?
Preparation: If you use a compliance platform like Vanta, Drata, or Secureframe, expect $10,000 to $30,000 per year for the software.
Audit fees: A CPA firm charges $15,000 to $50,000 for a Type II audit depending on company size and scope.
Total first year: Most companies spend $30,000 to $80,000 combining preparation and audit costs.
For a seed-stage startup, this is significant. For a company trying to close a $200,000 enterprise deal, it pays for itself immediately.
How Long Does It Take?
Getting from zero to a clean SOC 2 Type II report typically takes 9 to 12 months: 3 to 4 months of preparation and a 6-month observation period for the audit. Type I can be done in 2 to 3 months if you are well prepared.
Where to Start
Before you spend anything, it helps to know exactly what SOC 2 requires. Our free SOC 2 compliance checklist breaks down every control area so you can do a gap analysis before talking to any vendor or auditor.