Why SOC 2 Type 2 Compliance Matters for Accounting Document Management
They trust you to keep their data safe, which means the technology you choose has the power to make or break their faith in your practice. That's why finding solutions that meet System and Organization Controls (SOC) 2 compliance is critical.
What is SOC 2 compliance?
Think of SOC 2 compliance as a set of rules for your firm to follow that ensures your clients’ data is secure. These rules were established by the American Institute of Certified Public Accountants (AICPA). Compliance with these rules is typically tested through an audit conducted by independent third-party examiners.
SOC 2 compliance shows your commitment to protecting your current and potential clients’ financial information, which allows you to gain their trust. However, two types of SOC 2 compliance exist: SOC 2 Type 1 and SOC 2 Type 2. While each demonstrates a commitment to security, they prove different levels of dedication.
What is SOC 2 Type 1?
SOC 2 Type 1 tests your firm’s cybersecurity protocols at a single point in time. Imagine this type of audit as a snapshot of your cybersecurity — it doesn’t provide any data outside its designated window.
What is SOC 2 Type 2?
SOC 2 Type 2 tests your firm’s cybersecurity protocols over an extended period of time — typically anywhere from three to 12 months. These audits collect long-term data regarding your cybersecurity system’s effectiveness, uptime, and more to provide a comprehensive picture of your organization’s compliance.
What is the difference between SOC 2 Type 1 and 2?
SOC 2 Types 1 and 2 both test the quality of your cybersecurity protocols but in different ways. While they’re both effective indicators of your organization’s commitment to security, there are a few key differences that make SOC 2 Type 2 an overall higher quality certification:
- Effectiveness: SOC 2 Type 2 compliance highlights long-term success in security. Clients could view this type of compliance as more impressive or reassuring.
- Window of analysis: SOC 2 Type 1 is just a snapshot during a one-time audit compared to SOC 2 Type 2, which captures a fuller picture over an extended period. While SOC 2 Type 1 may show compliance, it doesn’t prove a consistent commitment to security.
- Cost: SOC 2 Type 1 reports are typically cheaper than SOC 2 Type 2 reports. However, if a potential client requests SOC 2 Type 2 reports that you don’t have, you could either have to pay for them or lose the client because you don’t meet their compliance requirements.
Investment: If you are willing to invest the money into a Type 2 compliant solution, this is a sign to your clients that you’ve invested in effective cybersecurity processes value data privacy, and aren’t interested in cutting corners.
If you’re looking for a quick, cost-effective way to show you have cybersecurity protocols in place, SOC 2 Type 1 may be a better fit. But this certification doesn’t show the level of commitment to security your clients’ financial data deserves.
Why SOC 2 Type 2 compliance is central to accounting document management
A cybersecurity breach could put your clients’ data at risk and open your firm up to costly legal consequences, which is why it’s so important for your document management system to be SOC 2 Type 2 compliant. When you have an SOC 2 Type 2 compliant solution, your firm benefits from:
- Taking the pressure off your team: With SOC 2 Type 2 compliance ensuring the security of your clients’ financial data, your team can operate confidently, eliminating data protection concerns and freeing them up for higher-value tasks.
- Building long-term trust: It’s one thing to say your clients’ information was safe on a single day; it’s another to show your clients that their information was secure over the course of months or a year. SOC 2 Type 2 certification tells your clients that your accounting document management solution is consistently working to keep their information secure — one season after another.
- Increasing your client base: Although some clients may not look too closely at your SOC 2 accreditation type, some high-value clients could see it as a top priority. Having the best possible SOC 2 compliance in your accounting document management solution will help you reel in bigger clients while maintaining trust among your regulars and increasing referrals across their networks.
- Reducing potential security risks: SOC 2 Type 2 compliance can provide legal peace of mind for your firm. A security breach could harm your practice’s credibility and finances, so an upfront investment in the right solution will ultimately pay off.
These benefits can set your firm apart from the competition, allowing you to make bold promises about security — promises you can actually deliver on. Not every accounting document management solution can offer this level of protection, but SmartVault can.
Protect your documents with an SOC 2 Type 2 compliant solution
Choosing an accounting document management solution with SOC 2 Type 2 compliance is crucial for providing your clients with the financial security they expect. While some solutions, like SmartVault, offer SOC 2 Type 2 compliance, others will advertise SOC 2 compliance without mentioning it’s only SOC 2 Type 1. When shopping for an accounting document management solution, ask which SOC 2 compliance type the vendor truly offers to guarantee your clients’ data is safeguarded to the highest standards.