Scaling SaaS videos: SOC 1 and SOC 2 reporting for SaaS scale-ups
In the short video accompanying this insight, Maverall Reynolds, Partner, and Benjie Ocquaye, IT Assurance Director at Moore Kingston Smith, explore why SOC reporting is becoming a consideration much earlier for high-growth SaaS businesses. They also explain how finance leaders can approach it in a way that supports scale, value and trust.
For CFOs of SaaS businesses that have moved beyond Series A, SOC 1 and SOC 2 reporting is no longer a future-stage compliance exercise. It is increasingly a commercial, operational and governance requirement, arising during enterprise sales conversations, procurement processes, funding rounds and preparations for an exit.
Understanding why SOC reports are being requested earlier, and approaching them strategically, can make a material difference to growth momentum, deal timelines and valuation.
Why SOC reporting is moving earlier in the SaaS growth journey
Several market shifts are accelerating demand for SOC 1 and SOC 2 reports among scale-ups.
Enterprise and regulated customers want assurance sooner
Larger customers are increasingly unwilling to rely on contractual assurances alone. Independent third-party assurance over controls may be required before contracts are signed, rather than after services go live.
Technology environments are more complex
Modern SaaS platforms rely on layered infrastructure, integrations, AI-enabled functionality and third-party providers. Customers, boards and investors want confidence that risks relating to security, availability, data processing and financial integrity are properly managed.
Procurement expectations have matured
SOC reporting is increasingly included in procurement requirements. Without a relevant SOC report, SaaS businesses may experience slower sales cycles, reduced pipeline conversion and additional friction late in the due diligence process.
Transaction and fundraising timelines are tighter
Investors and acquirers expect governance and controls to develop in line with revenue. Leaving SOC reporting too late may delay a fundraising or merger and acquisition process, or expose weaknesses when teams are already under pressure.
For finance leaders, the message is clear: SOC reporting is becoming part of the infrastructure that supports credibility as a SaaS business scales.
SOC 1 or SOC 2: choose according to business need
One of the most common challenges for SaaS businesses is proceeding with a particular SOC report before clarifying what stakeholders actually require.
SOC 1 focuses on internal controls over financial reporting. It is typically relevant when customers’ financial statements rely on a platform or service, such as payroll, payments, billing or revenue-related processing.
SOC 2 covers controls against trust services criteria, including security, availability, confidentiality, processing integrity and privacy. The need for SOC 2 is often driven by customer assurance, data protection and operational resilience requirements.
There is no default SOC report. The right choice depends on:
- your customer base and buyer profile;
- how customers use your platform within their control environments;
- whether the primary risk relates to financial reporting integrity, operational trust or both.
Selecting the wrong report can result in unnecessary cost, misaligned reporting and limited commercial value.
Moving from ‘badge’ compliance to stronger controls
Stakeholders are no longer looking for SOC reports simply as a tick-box exercise. There is a growing expectation that controls are:
- well designed, rather than simply documented;
- embedded in day-to-day operations, rather than owned by one person or team;
- capable of operating consistently over time, rather than assembled specifically for reporting.
For SaaS scale-ups, this represents a shift from reactive compliance to treating control maturity as a business asset. When approached effectively, SOC reporting can:
- improve internal ownership and accountability;
- strengthen governance and board oversight;
- reduce friction during audits, procurement and due diligence;
- provide a common framework that supports future standards and certifications.
Why SOC readiness matters
Many SaaS businesses with revenue of more than £10 million are technically strong but operationally stretched. Controls may exist, but evidence, ownership and consistent application can be fragmented.
A SOC readiness assessment can help the business:
- identify gaps in control design or operating effectiveness;
- clarify the scope before committing to a full SOC engagement;
- reduce the risk of costly rework and adverse report findings;
- ensure that the SOC report addresses the needs of customers, investors and boards.
For businesses at an earlier stage of their SOC journey, a readiness review can identify and address issues before formal reporting begins.
How SOC reporting can support commercial growth
When aligned with a genuine business need, SOC reporting can move beyond being viewed as a compliance burden. It may help a SaaS business to:
- unlock enterprise sales opportunities;
- accelerate procurement and due diligence;
- support international expansion and partner relationships;
- strengthen stakeholder confidence ahead of fundraising or an exit.
For CFOs and senior finance leaders, the opportunity is to treat SOC reporting as part of strategic finance and risk leadership, rather than an assurance exercise in isolation.
Talk to us about SOC readiness and reporting
If your business is preparing for enterprise customer onboarding, a funding round, strategic expansion or an exit, our team can help you determine which SOC report is appropriate, assess your readiness and deliver assurance aligned with your commercial objectives.
Contact Maverall Reynolds or Benjie Ocquaye to discuss SOC reporting for your SaaS business.
