Summary

Most software companies start with the Security criterion (also called the Common Criteria). This is the only mandatory TSC and covers access controls, encryption, monitoring, incident response, and more. Your people are both your greatest asset and your biggest security risk. SOC 2 requires evidence that employees receive security awareness training. The process typically takes 4–8 weeks after the observation period closes. Be responsive to auditor requests to avoid delays.

SOC 2 Step by Step for Software Companies: A Complete Implementation Guide

If you run a software company and your enterprise prospects are asking for a SOC 2 report, you’re not alone. SOC 2 has become the de facto security standard for SaaS businesses, and going through the process without a clear roadmap can feel overwhelming. This guide breaks down every phase of the SOC 2 journey into manageable steps so your team knows exactly what to do and when.

What Is SOC 2 and Why Does Your Software Company Need It?

SOC 2 (System and Organization Controls 2) is an auditing framework developed by the American Institute of Certified Public Accountants (AICPA). It evaluates how a software company manages customer data based on five Trust Service Criteria (TSC): Security, Availability, Processing Integrity, Confidentiality, and Confidentiality.

Most software companies start with Security as the only required category, then add others based on customer requirements or business goals.

There are two types of SOC 2 reports:

Type I – A point-in-time snapshot confirming your controls are designed correctly
Type II – Covers a period (typically 6–12 months) and confirms your controls actually operated effectively over time

Enterprise buyers, investors, and regulated-industry customers increasingly require a SOC 2 Type II report before signing contracts. Getting certified signals that your company takes data security seriously.

Step 1: Understand Your Scope

Before anything else, define what systems, services, and data fall under your SOC 2 audit. This is called your audit scope, and getting it right saves time and money.

Ask yourself:

Which products or services will be included?
Which cloud infrastructure is involved (AWS, GCP, Azure)?
Which third-party vendors handle in-scope customer data?
Which internal teams and processes touch that data?

Pro tip: Keep your initial scope narrow. A smaller, well-defined scope makes your first audit faster and less expensive. You can always expand scope in future audits.

Step 2: Choose Your Trust Service Criteria

Consider adding these criteria if relevant to your business:

Availability – If uptime SLAs are critical to your customers
Confidentiality – If you handle sensitive business data like trade secrets
Processing Integrity – If data accuracy and completeness are central to your service
Privacy – If you process personal information under regulations like GDPR or CCPA

Step 3: Conduct a Readiness Assessment (Gap Analysis)

A readiness assessment compares your current security posture against SOC 2 requirements. Think of it as a practice audit.

During this phase, you’ll identify:

Controls you already have in place
Controls that are partially implemented
Controls that are completely missing

Common gaps found at software companies include:

No formal access review process
Missing vendor risk management program
Lack of documented security policies
Insufficient logging and monitoring
No formal incident response plan

Document everything you find. This gap list becomes your remediation roadmap.

Step 4: Build and Document Your Security Policies

SOC 2 auditors need to see that your security practices are written down, approved, and communicated to your team. Policies are the foundation of your compliance program.

Essential policies for SOC 2 include:

Information Security Policy – The master document governing your security program
Access Control Policy – Who can access what, and how access is granted or revoked
Incident Response Plan – How you detect, respond to, and recover from security incidents
Change Management Policy – How code and infrastructure changes are reviewed and deployed
Vendor Management Policy – How you assess and monitor third-party risk
Business Continuity and Disaster Recovery Plan – How you maintain operations during disruptions
Acceptable Use Policy – Rules for how employees use company systems

Each policy should include a version number, effective date, owner, and approval signature. Policies that live in a shared folder and never get reviewed won’t satisfy auditors.

Step 5: Implement Technical Controls

Policies alone aren’t enough. You need technical controls that enforce your policies automatically. Here’s what auditors commonly look for:

Access Management

Multi-factor authentication (MFA) on all critical systems
Role-based access control (RBAC)
Quarterly access reviews
Offboarding procedures that revoke access within 24 hours of termination

Encryption

Data encrypted at rest (AES-256 or equivalent)
Data encrypted in transit (TLS 1.2 or higher)
Encryption key management procedures

Logging and Monitoring

Centralized log management (e.g., Datadog, Splunk, AWS CloudWatch)
Alerts for suspicious activity
Log retention for at least 12 months

Vulnerability Management

Regular vulnerability scans
Annual penetration testing
Patch management process with defined SLAs

Endpoint Security

Endpoint detection and response (EDR) on all company devices
Mobile device management (MDM) for remote teams
Disk encryption on laptops

Step 6: Train Your Employees

Your people are both your greatest asset and your biggest security risk. SOC 2 requires evidence that employees receive security awareness training.

Your training program should cover:

Phishing awareness and social engineering
Password hygiene and credential management
Data handling and classification
How to report a security incident

Document who completed training and when. Auditors will ask for this evidence, and “we trained everyone verbally” won’t cut it.

Step 7: Collect Evidence Continuously

SOC 2 Type II audits require evidence that your controls worked consistently over the audit period, not just on the day the auditor arrives. Start collecting evidence from day one.

Types of evidence you’ll need:

Screenshots of access reviews
Logs showing MFA enforcement
Records of security training completion
Penetration test reports
Vendor assessment records
Change management tickets
Incident response records (even if no incidents occurred)

Consider using a compliance automation tool (like Vanta, Drata, or Secureframe) to automate evidence collection and reduce manual work.

Step 8: Select a SOC 2 Auditor

Only a licensed CPA firm can issue an official SOC 2 report. When choosing an auditor:

Look for firms with experience auditing SaaS companies
Compare pricing (Type II audits typically range from $15,000 to $50,000+)
Ask about their audit timeline and communication style
Check references from similar-sized software companies

Start conversations with auditors early. Good firms book up quickly, and you want to align on scope and timeline before your observation period begins.

Step 9: Complete the Audit

Once your observation period ends, your auditor will:

Request a full evidence package
Conduct interviews with key team members
Test a sample of your controls
Issue a draft report for your review
Finalize and issue the official SOC 2 report

The process typically takes 4–8 weeks after the observation period closes. Be responsive to auditor requests to avoid delays.

Step 10: Share Your Report and Maintain Compliance

Your SOC 2 report is a powerful sales tool. Share it with prospects under NDA, include it in security questionnaire responses, and reference it on your trust page.

Compliance doesn’t stop at the report. Maintain your program by:

Reviewing and updating policies annually
Conducting quarterly access reviews
Monitoring for new vulnerabilities
Preparing for your next annual audit

Realistic SOC 2 Timeline for Software Companies

Phase	Duration
Scoping and readiness assessment	2–4 weeks
Remediation and policy writing	4–12 weeks
Observation period (Type II)	6–12 months
Audit fieldwork	4–8 weeks
Total time to Type II report	9–18 months

Frequently Asked Questions

How much does SOC 2 cost for a software company?

Total costs vary widely. Audit fees alone range from $15,000 to $50,000 depending on scope and auditor. Add internal staff time, compliance tools ($10,000–$30,000/year), and penetration testing ($5,000–$20,000). Budget $30,000–$100,000 for your first SOC 2 Type II audit.

Can a startup get SOC 2 certified?

Absolutely. Many early-stage SaaS companies pursue SOC 2 to unlock enterprise deals. Start with a narrow scope, focus on the Security criterion, and use automation tools to reduce the manual burden on a small team.

What’s the difference between SOC 2 Type I and Type II?

Type I is a point-in-time assessment confirming your controls are designed correctly. Type II covers an observation period (usually 6–12 months) and confirms controls operated effectively. Enterprise customers almost always require Type II.

Do I need a consultant to get SOC 2 certified?

You don’t need one, but many companies find that a consultant or compliance automation platform significantly reduces the time and stress involved—especially for teams going through the process for the first time.

How long is a SOC 2 report valid?

SOC 2 reports cover a specific observation period and are typically considered current for 12 months. Most companies schedule annual audits to maintain an up-to-date report.

Start Your SOC 2 Journey Faster With Ready-to-Use Templates

The biggest time sink in any SOC 2 project is writing policies and procedures from scratch. Our SOC 2 Compliance Template Bundle gives your team a head start with professionally written, auditor-approved documents including:

Complete information security policy suite (15+ policies)
Incident response plan and runbooks
Vendor risk assessment templates
Employee security training acknowledgment forms
Evidence collection checklists
SOC 2 readiness gap analysis worksheet

Stop reinventing the wheel. Download our templates today and cut weeks off your compliance timeline. Every template is written by compliance experts, formatted for immediate use, and designed to satisfy real SOC 2 auditors.

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