When we decided to pursue SOC 2 Type II certification, the business case was straightforward. Several enterprise customers required it. The audit fee was about $40K. We’d recoup that cost with one or two deals that wouldn’t have happened otherwise. Easy decision.

What nobody told us was that the audit fee is maybe 20% of the actual cost. The real expense is everything you need to do to pass the audit, the ongoing operational overhead of maintaining compliance, and the opportunity cost of engineering time spent on compliance activities instead of building products.

Three years later, I estimate SOC 2 compliance costs our organization about $200K annually when you account for everything. That’s still worth it because of the revenue it enables, but I wish someone had explained this up front.

The Infrastructure Changes

To pass SOC 2, you need certain technical controls in place. Some of these are good security practices you should do anyway. Others are compliance theater that adds overhead without meaningful security value.

We needed centralized log aggregation with immutable storage and retention policies. Reasonable requirement, and we probably should have done this earlier. But implementing it cost about two weeks of senior engineering time plus ongoing storage costs.

We needed formal change management processes with approval workflows and rollback procedures. This meant deploying tooling for change tracking and creating approval gates in our CI/CD pipelines. More engineering time, more operational friction.

We needed to implement network segmentation, privileged access management, and comprehensive monitoring. All good things, but each requirement took weeks to implement properly.

The infrastructure changes alone consumed probably three months of engineering time spread across multiple people. At our loaded costs, that’s easily $75K in labor before we even engaged the auditor.

The Documentation Burden

SOC 2 requires extensive documentation. Security policies, access control procedures, incident response plans, business continuity documentation, vendor management processes, and about twenty other policy documents.

These can’t just be templates you download. The auditor will ask questions to verify that your documentation matches what you actually do. If your access review policy says quarterly reviews but you’re actually doing them semi-annually, that’s a finding.

We spent probably six weeks total writing and refining policy documentation. Then every year, we need to review and update it. This is ongoing overhead that never goes away.

The documentation isn’t just policy documents. You need evidence for every control. Access review evidence, change management records, security training completion records, vulnerability scan results, penetration test reports. Gathering evidence for an audit takes weeks.

The Process Overhead

Compliance certifications require specific processes to be followed consistently. This creates operational overhead that continues after the audit.

We now do quarterly access reviews for all systems. A spreadsheet gets generated, managers review it, attestations get collected. This takes about 20 hours of time across the organization each quarter. Nobody enjoys it, but the auditor requires evidence that we’re checking access appropriately.

We have a formal change advisory process for production changes. Even routine deployments require documentation and approval. This adds friction to shipping code. We’ve optimized it to be as lightweight as possible, but it’s still overhead that wouldn’t exist without compliance requirements.

We do annual security awareness training for all employees. This costs money for the training platform plus time for everyone to complete it. Again, probably something we should do anyway, but the compliance requirement means we can’t skip it when things get busy.

Vendor security assessments are another time sink. We have to review the security practices of every vendor we use. For major vendors, this means sending security questionnaires and reviewing SOC 2 reports. For smaller vendors, it might mean accepting some risk but documenting that decision.

The Opportunity Cost

The most expensive part of compliance is what your team isn’t doing because they’re doing compliance work instead.

When a senior engineer spends a week implementing audit logging for a system, that’s a week not spent building features customers want. When the security team spends two weeks preparing for an audit, that’s two weeks not spent on actual security improvements.

I don’t know how to quantify this precisely, but my intuition is that compliance activities consume maybe 5-10% of engineering capacity in an ongoing way. That’s enormous. For a 20-person engineering team with loaded costs around $200K per person, 5% of capacity is $200K annually.

Some of this work creates genuine value. Better logging helps debugging. Access controls reduce security risk. But probably half of what we do is purely for compliance with minimal security benefit.

When It’s Worth It

Despite all this, SOC 2 compliance was the right decision for us. We sell to enterprises. They have procurement requirements that include security certifications. We’d lose deals without it.

But the decision math needs to include real costs. If the audit fee is $40K and the real cost is $200K, you need $200K of value to break even, not $40K. That means multiple enterprise deals, not just one or two.

For small startups or companies selling to SMBs, compliance certifications might not make sense. The overhead could kill you, and your customers might not care. Wait until you have clear signal that it’s blocking revenue.

For companies selling to government or highly regulated industries, compliance is non-negotiable. Factor the costs into pricing and budget for a dedicated compliance person or team as you scale.

Minimizing Overhead

If you’re going to pursue compliance certifications, there are ways to make it less painful.

Build compliance controls into your systems from the start. Retrofitting logging, access controls, and monitoring into existing systems is much harder than building them in from day one. If you know you’ll need SOC 2 eventually, implement those controls now even if you’re not getting audited yet.

Use automation wherever possible. Automated evidence collection, automated access reviews, automated vulnerability scanning. Every manual process is ongoing operational burden. Investment in automation pays off quickly.

Choose tools that support compliance. When evaluating SaaS tools, prefer ones that have their own SOC 2 certifications and provide documentation you can use for vendor assessments. This reduces your due diligence burden.

Scope certifications appropriately. You don’t need to include every system in scope. We excluded internal tools and development environments. This reduces the number of systems that need full compliance controls.

Multiple Certifications

After SOC 2, customers started asking for ISO 27001 certification. Then GDPR compliance documentation. Then various industry-specific frameworks.

Each additional certification has its own costs. There’s overlap, so the incremental cost of each additional certification is less than the first one. But it’s not free.

We’re now at a point where we have a full-time compliance manager and budget about $150K annually just for audit fees across multiple certifications. The operational overhead on top of that is significant.

This is life in enterprise B2B. If you sell to large companies in regulated industries, compliance is a cost of doing business. Budget for it properly.

The Hidden Truth

What frustrates me is that the compliance industry knows all of this and doesn’t talk about it clearly. Consultants and auditors will tell you the audit fee but not explain the full cost. They benefit from companies underestimating the work required and then scrambling to get compliant.

The sales pitch is always “SOC 2 is easy” or “we’ll make this painless.” The reality is that compliance is never painless. It requires real work, real process changes, and real ongoing overhead.

I’m not arguing against compliance certifications. They serve a purpose and create genuine value in enterprise sales. But I am arguing for honesty about what they actually cost.

If you’re considering pursuing SOC 2, ISO 27001, or other certifications, budget for at least 5x the audit fee to account for real costs. Expect to dedicate significant engineering time. Plan for ongoing operational overhead. Make sure the business value justifies those costs.

And when you do get certified, don’t just check the box and forget about it. Use the compliance framework as an opportunity to actually improve your security practices. If you’re going to pay the overhead anyway, you might as well get security value out of it, not just a certificate to show customers.

That’s the only way the math makes sense.