Compliance

The Hidden Costs of SOC 2 (and How to Budget for Them)

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Andrew Barratt

VP, Technology, Coalfire

September 30, 2025
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SOC 2 is often pitched as a quick audit expense. In reality, it’s a mix of direct and indirect costs and how your budget can make the difference between a smooth audit and a stalled sales cycle.

This post breaks down what SOC 2 costs, where companies underestimate, and how automation tools shift the equation.

Direct Audit Costs

This is the easiest line item to budget for, and the one executives often focus on.

  • Audit fees:
    • Small/early-stage company (single product, one cloud environment): $30K–$50K.
    • Growth-stage (multi-cloud, multiple systems, dozens of employees): $70K–$100K+.
  • Readiness assessments: Some firms offer pre-audit readiness checks at $10K–$25K.

Experienced reality check: audit fees are only a portion of the true cost of SOC 2.

Internal Staff Costs

SOC 2 pulls in far more than just IT. Internal time is the hidden, but very real, expense:

  • CISO / Head of Security: policy design, risk assessments, control oversight.
  • Engineering / DevOps: providing evidence of backups, logging, monitoring, access reviews.
  • Finance / HR / Ops: HR onboarding/off boarding, vendor risk management, change control.

Estimate:

  • Small team → 200–400 staff hours per year.
  • Mid-size → 700–1,000 staff hours per year.

That’s a significant internal effort.

Indirect Business Costs

Executives rarely see these until it’s too late:

  • Sales delays: Every week without a SOC 2 report slows enterprise procurement. Lost deals = lost revenue.
  • Remediation cycles: Failed controls during audit mean extra staff time and re-testing.
  • Audit fatigue: Teams pulled into repeat evidence-gathering instead of focusing on growth.

The Value of Tools and Automation

This is where CFOs can change the curve. Compliance automation platforms promise to cut audit prep time. Here’s how the math often works out:

  • Annual platform cost is usually on a subscription or ‘per seat’ basis
  • Efficiency gains: can reduce evidence collection effort by 30–50%.
  • Audit readiness: continuous monitoring reduces the risk of costly control failures.

⚖️ ROI: A tool that saves 400 staff hours shortens sales cycles can pay for itself quickly.

Putting It All Together

So, the total cost clearly will vary by size and complexity. Some planning, organisation, automation and tooling will make the whole process more manageable and effective.

There is a word of warning as we look at the use of automation and tooling.  It’s never been more important to make sure your SOC2 auditors are fully aware of the mechanisms your automation use to collect evidence so they can make sure they do that consistently over the reporting period and effectively rely on it to speed up the audit cycle. 

This is more than just ‘looking at the dashboard’! To use one of my favourite lines from Ghostbusters ‘The light is green, the trap is clean!’, you may have a dashboard that shows a lot of green but it’s important to make sure that both you and your auditor are fully aware of the way the controls are tested as that is what your auditor is relying on.  There are horror stories of ‘throw away SOC2 reports’ where a CPA, typically a non-technical specialist has signed off a SOC2 opinion entirely based on seeing the dashboard of an automation tool.  Then when the relying parties to the SOC2 have read the report they’ve discounted it as of no meaningful value – as its clear nobody looked!

Executive Takeaway

  • Don’t budget SOC 2 as “just the audit.” Staff time and opportunity costs often exceed audit fees.
  • Automation platforms aren’t optional overhead they’re often ROI-positive.
  • Think of SOC 2 as a recurring business program, not a one-off project.
  • Don’t be tempted to take false economy ‘sign off the dashboard’ approach if there is an intention to use the SOC2 with any regulated entity, or a large enterprise procurement team.  They’ll just throw it out and you’ll be back to the security score cards and questionnaires.

SOC 2 is a growth enabler if planned well with your business development teams able to articulate to its value.

🔜 Next in this series:SOC 2 as a Competitive Advantage.