SaaS companies are under immense pressure to prove one thing above all: customer data is safe. With cyberattacks growing both in frequency and sophistication, showing your users and stakeholders that your business takes security seriously is essential.
For example, in December 2024, Italy’s privacy watchdog fined OpenAI €15 million ($15.58 million) for processing users’ personal data without sufficient legal basis and violating transparency obligations.[1]

To prevent such fines SOC 2 compliance can be beneficial. Designed specifically for service-based businesses like SaaS providers, SOC 2 helps you demonstrate that your organization has the right systems and processes in place to protect customer data. But navigating this compliance framework can feel overwhelming without a clear roadmap.
If you’re preparing for your first audit or looking to streamline your ongoing compliance journey, this guide will walk you through what SOC 2 is, why it matters, and the exact steps you need to follow to meet its requirements.
Let’s break it down step by step.
What is SOC 2 compliance?
SOC 2 compliance is a framework developed by the American Institute of Certified Public Accountants (AICPA) to evaluate how service providers handle customer data. Specifically designed for technology and cloud-based companies like SaaS providers, SOC 2 helps assess internal controls related to data security, availability, processing integrity, confidentiality, and privacy.
At its core, SOC 2 is based on five Trust Service Criteria (TSCs):
1. Security
Security controls help protect systems and data from unauthorized access, misuse, and common threats. Typical measures include:
- Web application firewalls configured to block attacks like CSRF, XSS, and SQL injection.
- Continuous network monitoring and intrusion detection integrated with SIEM platforms.
- Two-factor authentication (2FA) applied to high-risk or sensitive accounts.
- Security training programs that include simulated phishing tests targeting 2FA awareness.
2. Availability
Availability controls ensure that systems remain reliable and accessible when needed. These controls typically include:
- Mechanisms to meet service-level objectives and maintain system uptime.
- Procedures for handling failovers, outages, and recovery during security incidents.
- Resilience planning to minimize disruption and restore normal operations quickly.
3. Processing integrity
Processing integrity ensures that data is processed accurately, consistently, and only under authorized conditions. Common controls involve:
- Checks to verify that data processing is complete, valid, and timely.
- Systems that detect and prevent unauthorized changes or inaccurate inputs.
- Processes to support user requests to review or obtain logs of data usage and disclosures.
4. Confidentiality
Confidentiality controls are designed to restrict access to sensitive information and prevent exposure. These typically include:
- Workforce training on proper handling and classification of confidential data.
- Encryption of data at rest and in transit, including on personal or mobile devices.
- Role-based access restrictions to ensure only authorized personnel can view or interact with protected information.
5. Privacy
Privacy controls govern how personal data is collected, used, retained, and disclosed in line with established standards. These controls should align with the AICPA’s Privacy Management Framework and the requirements of the SOC 2 Privacy criteria. Key practices include:
- Policies that define appropriate use, storage, and sharing of personal information.
- Full visibility into the data lifecycle from creation to disposal to ensure data is handled with consent or proper authorization.
- Documentation of user consent and data disclosures to support transparency and accountability.
While SOC 1 focuses on financial reporting controls, SOC 2 compliance centers around non-financial controls, making it a perfect fit for SaaS businesses that host or process customer data.
SOC 2 Type I vs Type II: What’s the difference?
When undergoing a SOC 2 audit, you can choose between two types of reports:
- SOC 2 Type I: Assesses whether your systems and controls are properly designed at a single point in time.
- SOC 2 Type II: Evaluates how effective those controls are over a period of 3–12 months.
Type II is generally preferred by larger clients and enterprises because it proves that your controls are not only in place but also working consistently.
Why SOC 2 compliance matters for SaaS businesses?
For SaaS businesses, SOC 2 compliance is a foundation for long-term success. If your platform stores, or processes transmit customer data, proving your commitment to data security can make or break your business relationships.
a. Builds trust with customers
In a crowded SaaS market, trust is currency. When potential customers, especially large enterprises evaluate software vendors, they want to know their data will be protected. A SOC 2 report is a third-party validation that your business meets industry-standard security practices. It’s not just what you say; it’s what an auditor confirms.
b. Unlocks bigger deals
Enterprise clients often require a SOC 2 report before signing a deal. Without it, you might be eliminated from the race, no matter how good your product is. SOC 2 compliance opens doors to bigger clients, longer contracts, and higher deal values.
c. Reduces risk of data breach
SOC 2 compliance isn’t only about impressing clients, it’s also about internal resilience. Following a strong SOC 2 compliance checklist means proactively identifying and addressing security risks before they turn into costly incidents.
d. Simplifies vendor reviews and due diligence
When partnering with other companies, you may be asked to complete vendor security assessments. With a SOC 2 report in hand, you can bypass lengthy questionnaires and quickly build confidence in your practices.
e. Future-proofs your SaaS business
Regulations are tightening. Customers are becoming aware. Cyber threats are escalating. SOC 2 compliance gives you a strong foundation to improve your security posture and meet future requirements, from ISO 27001 to GDPR and beyond.
Read more: Compliance vs. non-compliance and its consequences
SOC 2 compliance requirements: A checklist
Getting SOC 2 compliant might feel like climbing a steep hill but with the right SOC 2 compliance checklist, it becomes a structured and achievable journey. Below is a step-by-step breakdown personalized for SaaS companies, covering everything you need to prepare for a successful audit.
1. Start with the right audit: Type 1 or Type 2?
Before you begin the full SOC 2 audit, ask yourself if it makes sense to start with a Type 1 report. A Type 1 audit looks at your policies and controls on a specific day. It checks whether they are designed properly, but it doesn’t check if they’re working over time.
A Type 2 audit does both. It checks how your systems are designed and whether they actually work well over several months.
Many companies choose to do a Type 1 audit first, especially if this is their first time going through SOC 2. It helps catch issues early and gives customers a first level of assurance. But you can also skip Type 1 and go straight to Type 2 if you are ready.
2. Set the scope and choose the right criteria
SOC 2 doesn’t cover your whole company. It only looks at the systems, processes, and teams involved in delivering your product or service.
First, decide what parts of your business the audit should focus on. This is called defining the scope. Next, choose which Trust Services Criteria (TSC) apply to your company. All audits include Security, but you can also include:
- Availability if your customers depend on you to be up and running all the time (like SaaS or cloud platforms).
- Processing Integrity if your product handles things like payments or data accuracy.
- Privacy if you collect personal data like names, emails, or health info.
Pick the ones that match how your business works and what your customers care about most.
3. Involve the right teams early
A SOC 2 audit isn’t something one person can handle alone. You will need help from different teams like IT, engineering, HR, security, and leadership.
Let everyone know what’s coming and what’s expected from them. People may need to provide documents, explain how things work, or update processes. If your team knows the plan early, things will go a lot smoother later.
4. Run a readiness or gap assessment
Before calling in the auditors, take time to check where you stand. This step is called a gap assessment or readiness assessment.
You should look at your current policies, tools, and controls and compare them to what SOC 2 expects. The goal is to find out what is missing, what needs to be updated, and what’s already good to go.
You can do this yourself or get help from a compliance expert who knows SOC 2 inside out.
5. Fix the gaps before you audit
After your gap assessment, you may need to make a few changes.
You might have to:
- Write or update policies
- Add new security tools
- Set up better access controls
- Train your team
- Adjust how you store or share data
This step takes time, but it’s worth it. The better your setup before the audit, the less stress you will have during it.
6. Communicate your security efforts externally
You don’t have to announce your SOC 2 plans publicly but being open about your security practices helps build trust with customers.
You can update your website, security page, or Trust Center with a simple overview of what you are doing to protect data. For example:
- Do you run regular security tests?
- Do you train employees on security?
- Do you use encryption for data?
- Do you monitor systems in real time?
Even without mentioning SOC 2, this shows customers that you take security seriously.
7. Keep controls running smoothly
After fixing gaps and putting controls in place, the next step is to keep everything running smoothly.
SOC 2 expects you to monitor your systems, keep logs, and collect evidence on a regular basis. Doing all of this manually can be overwhelming. If you haven’t already, consider using a tool that can automate monitoring and evidence collection.
This way, you stay audit-ready all the time and not just once a year.
8. Choose an auditor that fits your needs
Not all auditors work the same way. Some just go through the checklist. Others take time to understand your business and make the process easier.
When choosing an audit firm, look for someone who:
- Explains things clearly
- Understands your industry
- Works well with your team
- Has good reviews or references
A good auditor will make the whole experience smoother and less stressful.
9. Complete the audit and get your report
Once everything is in place, you are ready for the actual audit. You can share your documents and evidence with the auditor. They may ask for extra details or set up calls to walk through certain processes.
If you are doing a Type 1 audit, they will check whether your setup is designed correctly. If you are doing a Type 2, they will also look at whether those systems worked properly over time.
At the end, you will receive your SOC 2 report, a proof that your company takes data protection seriously and follows industry standards.
Read more: How often should you conduct an IT compliance audit?
5 Common challenges in achieving SOC 2 compliance
Even with a solid SOC 2 compliance checklist, the journey can come with a few speed bumps. Knowing the common challenges ahead of time can help avoid delays and mistakes.
1. Underestimating the time involved
Many SaaS teams assume they can get SOC 2 ready in a few weeks. In reality, it often takes 3–6 months to fully implement the required controls, policies, and monitoring. Rushing it usually leads to mistakes or missed deadlines.
2. Poor documentation habits
SOC 2 requires solid documentation policies, procedures, access logs, training records, and more. A common issue is scattered or informal records. Keep everything centralized in a shared compliance hub that stays up to date.
3. No clear internal ownership
If everyone owns SOC 2, then no one really does. Assign a compliance lead or team to coordinate across departments. Without clear ownership, key controls often fall through the cracks.
4. Manual evidence collection
Manually gathering screenshots or logs becomes a nightmare during Type II audits. Automated tools help streamline evidence collection, reduce manual work, and keep you audit-ready all year.
Read more: Compliance Automation – What it is & why your business needs it
5. Treating SOC 2 as a one-time task
Passing the audit is not the end, it is the beginning of ongoing responsibility. Without regular reviews and active monitoring, controls can weaken over time. Continuous compliance depends on having clear processes and strong team ownership.
How to maintain SOC 2 compliance post-audit?
Achieving SOC 2 compliance is a big milestone but maintaining it is where the real discipline kicks in. Especially if you’ve passed a SOC 2 Type II audit, you’re now expected to uphold your controls continuously.
Here’s how SaaS businesses can stay on track with ongoing compliance:
1. Implement continuous monitoring
SOC 2 is not a snapshot, it’s a time-lapse. You need to monitor systems, access, and controls 24/7, not just at audit time.
Use tools that:
- Monitor cloud infrastructure in real-time
- Alert on policy violations or misconfigurations
- Track system availability and incident response times
This ensures you’re always prepared for your next audit window.
2. Conduct regular access reviews
As teams grow, people often retain permissions they no longer need. This increases risk.
Run quarterly or monthly access reviews to:
- Confirm users still need access
- Remove stale or unused accounts
- Revalidate roles and privileges
These reviews should be documented and signed off for compliance evidence.
3. Keep policies and training up to date
Your policies should not gather digital dust. Review and update them at least annually or anytime your systems, vendors, or processes change.
Similarly, schedule ongoing employee security training and track completion logs. Make it part of onboarding for new hires and refresh it yearly for existing staff.
4. Log and review all security incidents
Even if an incident does not result in a breach, it still matters. SOC 2 expects you to:
- Log all incidents
- Analyze root causes
- Review the response process
- Document outcomes and improvements
This shows that you’re taking security seriously even in the absence of a disaster.
5. Prepare for re-audits in advance
SOC 2 compliance is not a one-time stamp of approval. Your report is only valid for 12 months, after which you will need a re-audit to stay current.
Instead of scrambling once a year, build compliance into your day-to-day operations. With the right systems and habits, every month becomes audit-ready by default.
Make SOC 2 a competitive advantage, not a checkbox
SOC 2 compliance is a signal to the world that your SaaS company takes data security seriously. With cyber threats on the rise and customer expectations evolving fast, proactive compliance is foundational.
By following a clear SOC 2 compliance checklist, building strong internal practices, and using the right tools, you not only pass the audit but you also future-proof your business, accelerate growth, and build lasting trust with your customers.
Remember: SOC 2 is not a one-time event. It’s an ongoing commitment to operational excellence, transparency, and accountability. The sooner you implement these values into your DNA, the more confidently you can scale.
Final takeaways:
- Start early even if you’re not yet enterprise-level.
- Don’t underestimate the importance of documentation, automation, and team buy-in.
- Use your SOC 2 report as a sales enabler, not just a security formality.
- Think of compliance as a culture, not a task.
If you’re a growing SaaS startup or a scaling enterprise, taking that first step today puts you miles ahead tomorrow. Build your checklist, assess your readiness, and take control of your compliance journey.
Reference:
1.Reuters
FAQs
1. What is SOC 2 compliance, and why is it important for SaaS companies?
SOC 2 compliance ensures that your company follows strict security and privacy practices to protect customer data. It builds trust with clients and helps reduce the risk of data breaches.
2. What are the benefits of a SOC 2 report?
A SOC 2 report shows that a company handles customer data securely and responsibly. It helps build trust, shortens vendor security reviews, and gives a competitive edge, especially for SaaS and tech companies. It also improves internal processes by encouraging better policies and monitoring.
3. What are the five Trust Service Criteria (TSCs) in SOC 2 compliance?
The five criteria are:
- Security: Protection against threats
- Availability: System uptime
- Confidentiality: Protecting sensitive data
- Privacy: Handling personal data properly
- Processing Integrity: Accurate data processing
4. How can you achieve SOC 2 compliance?
SOC 2 compliance involves setting up controls that meet the AICPA’s Trust Services Criteria, covering areas like security and privacy. The process includes defining scope, documenting policies, fixing gaps, and completing an audit. Many businesses use automation to monitor controls and stay compliant year-round.
5. How can automation tools help with SOC 2 compliance?
Automation tools help by collecting evidence, monitoring logs, conducting risk assessments, and generating reports, saving time and ensuring accuracy in the compliance process.