What is SOC 2?

SOC 2 is a compliance framework used to assess and validate an organization's information security practices. Widely adopted in North America, particularly within the SaaS industry, it helps build trust with enterprise customers by demonstrating your commitment to data security and privacy.

Key Takeaways

Point	Summary
What it is	SOC 2 is an audit report (not a certification) issued by a licensed CPA firm validating your security controls
Timeline	4.5-6 months total, typically including a 3-month minimum observation period for Type 2
Cost	€10,000-50,000 all-in, depending on your company size, tech setup, and scope
Who needs it	SaaS companies selling to enterprises, especially those selling to US-based companies or companies operating in regulated spaces
Business impact	Enterprise deals often represent significant ARR that can justify the compliance investment many times over

Quick Answer: SOC 2 is an audit report that proves your security controls work. It takes 4.5-6 months to complete, and costs from €10,000 to €50,000 a year, depending on your company's complexity, size, and scope. Most SaaS companies pursuing enterprise customers find it essential for demonstrating that they manage customer data securely.

Why SOC 2 matters for growing companies

• Sales enablement. SOC 2 can open doors to enterprise deals. Without it, organizations often find themselves stuck in lengthy security reviews or losing opportunities to competitors who already have their report.
• Streamlined security reviews. While SOC 2 won't eliminate security questionnaires entirely, having a verified report from a trusted third-party auditor tends to streamline and expedite the review process considerably.
• Competitive positioning. Enterprise buyers increasingly expect SOC 2. Having it can remove friction from your sales cycle and put you on equal footing with larger competitors.
• Third-party validation. When a licensed CPA firm validates your security controls, your claims carry more weight than self-attestation alone.

How SOC 2 works

Understanding the report

SOC 2 is NOT a certification. It's an attestation engagement. A licensed CPA firm examines management's description of the system and the suitability of the design (Type 1) or design and operating effectiveness (Type 2) of controls. The auditor issues a report containing their opinion, management's assertion, the system description, and details of controls tested.

• Certification (ISO 27001). Pass/fail binary outcome, certificate issued, valid for 3 years.
• Attestation (SOC 2). Detailed report with auditor's opinion, issued by CPA firm. Reports do not technically expire, but enterprise customers typically expect reports to be renewed annually.

The 5 Trust Services Criteria

SOC 2 evaluates your organization against five Trust Services Criteria, defined by the AICPA. Security is mandatory; the others are optional based on your business model and customer requirements.

Criteria	What it covers	When to include
Security (CC) (Required)	Protection against unauthorized access and disclosure: authentication, encryption, firewalls, incident response	Always required for all SOC 2 reports
Availability (A)	System uptime and operational reliability: monitoring, disaster recovery, incident management	Include if you offer SLAs or uptime guarantees
Confidentiality (C)	Protection of sensitive business data	Include if you handle trade secrets or proprietary data
Processing Integrity (PI)	Data processing is complete, valid, accurate, and timely	Include for financial transactions or data processing services
Privacy (P)	Collection, use, retention, and disposal of personal information; consumer notification rights	Include if you handle PII (see also GDPR requirements)

Most SaaS companies need Security + Availability. Add others only if customers specifically require them or if they're core to your service offering.

SOC 2 Type 1 vs Type 2

There are two types of SOC 2 reports, and understanding the difference is crucial for planning your compliance timeline:

	SOC 2 Type 1	SOC 2 Type 2
What it assesses	Control design at a single point in time	Control design AND operating effectiveness over time
Audit window	Single date (snapshot)	3-12 months observation period
Timeline to complete	4-8 weeks	4.5-6+ months (including observation period)
Cost	Lower (typically 30-40% less)	Higher
Report depth	Shows controls exist	Shows controls work consistently
Enterprise acceptance	Acceptable as a stepping stone	Strongly preferred by most enterprises

Which should you choose?

• Type 1 first makes sense if you need to close deals immediately and customers will accept it as an interim step. You can start Type 2 observation immediately after.
• Skip to Type 2 if you have 4.5+ months runway and want the stronger report that most enterprise customers require.

Most enterprises ultimately require Type 2 because it proves your controls aren't just designed well, but actually work over time.

SOC 1 vs SOC 2 vs SOC 3

While this guide focuses on SOC 2, it's helpful to understand how it differs from SOC 1 and SOC 3:

	SOC 1	SOC 2	SOC 3
Purpose	Financial reporting controls	Information security controls	Information security (public summary)
Audience	Auditors of your customers	Customers, partners, prospects	General public
Who needs it	Companies affecting customers' financial statements (payroll, billing)	SaaS, data processors, cloud services	Same as SOC 2
Detail level	Detailed	Detailed	High-level summary
Sharing	Under NDA	Under NDA	Public (can post on website)

For most SaaS companies, SOC 2 is what you need. SOC 1 is for financial services like payroll processors. SOC 3 is essentially a marketing asset, a public-facing summary of your SOC 2 that you can display on your website.

Timeline and costs

Understanding the timeline: 4.5-6 months

• Implementation. The implementation phase depends largely on your initial readiness, workflow maturity, and technical setup. For SaaS companies with modern, straightforward setups, this might take 6-8 weeks. Larger organizations with more complex environments may need additional time. See our SOC 2 compliance checklist for more details.
• Observation period. 3-12 months.
• Report generation. A few weeks.

While the AICPA does not mandate a specific minimum observation period, a 3-month period is generally accepted by auditors as sufficient to demonstrate operating effectiveness for first-time SOC 2 Type 2 reports. For subsequent years, extending the observation period to 6 or 12 months is considered good practice to demonstrate the effectiveness of controls over a longer period. (Note: No explicit AICPA minimum exists; 3 months reflects commonly accepted auditor practice.)

What to tell prospects while you're in process

You don't need to wait 6 months to close deals. During the observation period, provide:

• Auditor letter. Official letter from your CPA firm stating you're "in process" with expected completion date.
• Controls list. Document listing all security controls you've implemented.
• Security overview. One-pager describing your security posture.
• Pen test report. If completed, share the executive summary.

Understanding the investment: €10,000-50,000 all-in

The cost of a SOC 2 engagement depends on several factors, including your company's size, the complexity of your technical environment, and the scope of your audit. A comprehensive engagement typically includes compliance platform, security tooling, penetration testing, audit costs, and documentation support.

What's typically NOT included: remediation of vulnerabilities discovered during testing and major infrastructure changes that may be needed.

Considering the business case

For many organizations, the investment in SOC 2 can pay for itself through:

• Enterprise deal enablement. Larger contracts often become accessible once you have SOC 2.
• Efficiency gains. Less time spent on repetitive security questionnaires.
• Shorter sales cycles. Reduced back-and-forth during security reviews.

The specific return depends on your sales motion and target customers, but organizations selling to enterprises typically find that even a single significant deal can justify the compliance investment.

Is SOC 2 right for you now?

Signs it may be time to start

• Enterprise customers are actively requesting your SOC 2 report
• You're seeing deals stall or go to compliant competitors
• Security questionnaires are becoming a significant time investment
• You handle sensitive customer data (PII, financial, health)
• You're targeting larger organizations (500+ employees)

It might make sense to wait if

• No current customers or prospects have asked about it
• You're pre-revenue or in very early stages
• Major tech stack migrations are planned in the coming months
• Your customers are primarily B2C or SMB who don't require compliance attestations

One consideration worth keeping in mind: the 4.5-6 month timeline means SOC 2 can't be rushed when you suddenly need it. If enterprise sales are on your roadmap, thinking ahead can be valuable.

Things to consider when choosing a partner

Be cautious of unrealistic timelines

Some providers promise "SOC 2 in 30 days." Given that the observation period alone is typically 3 months, timelines that seem too fast may indicate corners being cut or a misunderstanding of the process.

Understand the full cost picture

It's worth asking upfront what's included in any quote. Some engagements separate out audit fees, penetration testing, or security tools. Understanding the complete investment helps avoid surprises later.

Look for customization, not just templates

Generic policy templates that don't reflect your actual operations can create problems down the line. Auditors tend to notice when documentation doesn't match reality.

Value pre-audit preparation

Going directly to audit without someone reviewing your readiness can be risky. Identifying and addressing issues before the auditor arrives tends to lead to smoother outcomes.

Common misconceptions

"SOC 2 eliminates security questionnaires"

Reality: You'll likely still receive questionnaires from prospects and customers. What changes is that your report provides third-party validation for your answers. Many organizations see a significant reduction in the effort required to complete questionnaires, though not complete elimination.

"Once we have SOC 2, we're secure"

Reality: Compliance and security are related but distinct. Having SOC 2 doesn't guarantee you're immune to vulnerabilities or attacks. It's better thought of as a baseline: important, but part of a broader security program.

"We're too small for SOC 2"

Reality: Organizations with 5-10 employees regularly achieve SOC 2. In fact, starting earlier can be easier because you're building security practices into your operations from the beginning rather than retrofitting them later.

"Our cloud provider's SOC 2 covers us"

Reality: AWS, GCP, and Azure have their own SOC 2 reports, but these cover their infrastructure, not your application. Enterprise customers typically want to see how you handle security on top of your cloud provider's foundation.

After your SOC 2 is complete

Share your report

Create a secure sharing process: NDA required, watermarked PDF, or data room. Update your website, security page, and proposals with the SOC 2 badge.

Maintain compliance

SOC 2 is an ongoing commitment. Reports are typically renewed annually. Here's what ongoing compliance generally involves:

• Evidence collection. With proper automation, this becomes a continuous, low-effort process.
• Policy reviews. Periodic reviews to ensure policies remain current.
• Security training. Annual training for employees.
• Audit. Annual audit engagement.

The first year tends to require the most effort. After that, with the right systems in place, maintenance becomes more manageable.

Getting started

Assess technical readiness

Before starting, ensure you have:

• Environment separation. Dev, staging, and production properly separated.
• Database encryption. All production databases encrypted at rest.
• MFA everywhere. On all cloud provider admin accounts.
• Structured releases. Some form of deployment process.

Missing these? Fix them first. They're required for SOC 2 anyway.

Consider your approach

There are generally two paths:

• Self-directed with a platform. You'll manage more of the process yourself, which requires more time and often a longer timeline. This can work well for teams with existing compliance expertise.
• Managed service. A partner handles much of the heavy lifting, ensuring things are done correctly the first time and avoiding costly iterations. This approach typically moves faster and requires less of your team's time.

Plan ahead

The observation period means SOC 2 can't be compressed into a few weeks when you suddenly need it. Working backward from your target date and starting early tends to lead to better outcomes.

How Bastion helps

Bastion was built for technology leaders who need SOC 2 without becoming compliance experts themselves.

• Dedicated Security Engineer. You work with the same person throughout the engagement, someone who speaks your technical language.
• Custom documentation. Policies customized to reflect your actual operations, not generic templates.
• Pre-audit review. Issues get identified and addressed before auditors see them.
• Audit coordination. We handle the back-and-forth with auditors, minimizing the burden on your team.
• Transparent pricing. All-in pricing that includes penetration testing, audit, and security tools.
• Managed service approach. We bring additional hands to do the heavy lifting, ensuring things are done right the first time and avoiding costly iterations and rework.

Ready to explore whether SOC 2 is right for your organization? Talk to our team

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Sources

• AICPA Trust Services Criteria - Official documentation of the five Trust Services Criteria (Security, Availability, Processing Integrity, Confidentiality, Privacy)
• AICPA SOC Suite of Services - Overview of SOC 1, SOC 2, and SOC 3 reports
• AICPA Guide: SOC 2 Reporting on an Examination of Controls - Official guidance for SOC 2 engagements
• SSAE 18 / AT-C 205 Attestation Standards - Attestation standards governing SOC 2 examinations