Is your procurement software provider SOC 2 compliant? They should be - here’s why

Finance teams manage a continuous flow of sensitive information: from purchase orders and approval workflows to invoices and financial data. With growing pressure to move faster and stay connected across systems, data security can’t be overlooked.

That’s where SOC 2 compliance comes in. SOC 2 (System and Organization Controls 2) is a framework that sets the standard for how SaaS providers handle sensitive data. More than a compliance standard, it reflects a commitment to keeping your data environment safe and reliable.

In this blog, you’ll learn what SOC 2 compliance is, why it should be part of your procurement software evaluation process, and the practical benefits it brings to your team. You’ll also get four tips for choosing a SOC 2 compliant solution that protects your data while keeping procurement operations running smoothly.

What is SOC 2 compliance?

SOC 2 was developed by the American Institute of CPAs (AICPA) to evaluate service providers on five Trust Service Principles:

1. Security: Prevents unauthorized access to systems and data.
2. Availability: Makes sure systems are up and running when needed.
3. Processing Integrity: Confirms data is processed accurately and on time. 
4. Confidentiality: Protects sensitive business information from being exposed.
5. Privacy: Safeguards personal data in line with privacy regulations.

Not all organizations have to be SOC 2 compliant themselves, but the software they use absolutely should. Why? Because your procure-to-pay (P2P) platform is the gateway to business-critical functions: managing vendor relationships, processing invoices, tracking expenditure, and housing purchasing records.

If that system fails (or worse, gets breached), the consequences extend far beyond IT. We're talking disrupted workflows, delayed payments, lost supplier trust, and potential compliance violations. Choosing a SOC 2 compliant procurement software provider is a safeguard.

Why SOC 2 compliance matters for procurement software providers

Procurement software that isn’t compliant leaves your organization vulnerable to system failures and compliance gaps. A SaaS provider that’s SOC 2 compliant meets rigorous standards for reliability, security, and accountability. 

Here’s how that makes a difference:

• Protects against data breaches: Sensitive data is guarded with solid security protocols, mitigating the risk of data loss and reputational damage.
• Operational integrity: SOC 2 compliance ensures that the software meets specific standards for system performance, reliability, and service uptime, which is essential for smooth procurement operations.
• Builds trust and ensures transparency: A SOC 2-compliant provider has undergone an independent audit to demonstrate their commitment to security and data protection. Your data is being managed securely and in compliance with best practices.
• Supports regulatory compliance: Whether you work in healthcare, education, or agriculture, SOC 2 helps align your procurement practices with broader industry regulations.

Risks of using procurement software that’s not SOC 2 compliant

Choosing procurement software that isn’t SOC 2 compliant exposes your organization to financial, operational, and reputational risks.

• Data breaches and theft: Without strong data safeguards, sensitive supplier and financial information can be exposed or stolen, which can lead to identity theft, fraud, or misuse of company data.
• Reputational damage: A single breach can erode trust with suppliers, partners, and regulators. Legal battles and public scrutiny may follow, damaging your company’s brand and stakeholder relationships.
• Financial loss: Non-compliant systems increase the risk of unauthorized transactions and fraudulent activity. This could result in direct monetary losses that can strain already tight margins.
• Operational disruption: Security incidents can bring procurement processes to a standstill. Delayed approvals, inaccessible records, and downtime all hinder your ability to buy what you need, when you need it. 
• Regulatory consequences: Non-compliance with data protection regulations like GDPR or CCPA can result in steep fines, mandatory disclosures, and even litigation.
• Expensive recovery efforts: Breaches require investigation, communication, and costly fixes. Legal fees, cybersecurity upgrades, and damage control can add up very quickly.

How to choose a SOC 2 compliant procurement software

Not all vendors are equal. When evaluating the right procurement software for your business, it’s important to vet your vendors thoroughly and understand how they operate. Here's what to look for:

1. Request their SOC 2 report

Always ask for a current, third-party audited SOC 2 report. This document shows how the provider meets the trust service criteria and highlights any gaps or areas of concern. If a vendor can’t provide this, it's a red flag.

2. Check the scope and recency

Make sure the report is less than 12 months old and specifically covers key areas like security, availability, and confidentiality (especially those tied to sensitive procurement functions like approvals, vendor pricing, and purchase orders and amendments). Ask whether they completed a Type I or Type II audit. The latter offers deeper insight into how controls perform over time.

3. Evaluate their security practices

Don’t stop at the report. Ask how the vendor:

• Encrypts sensitive procurement data (at rest and in transit)
• Manages user access controls and permissions
• Trains employees on secure handling of procurement data
• Handles incident response, backups, and disaster recovery

These are hallmarks of a procurement SaaS provider that goes beyond check-the-box compliance and prioritizes data protection.

4. Evaluate transparency and responsiveness

A trustworthy vendor will answer your questions clearly, provide documentation without delay, and be proactive in explaining how they protect your data. They’ll also offer guidance on how their controls align with your organization’s internal policies and compliance needs.

Why organizations trust Fraxion for secure, SOC 2 compliant procurement and spend management

When talking about protecting sensitive procurement data, Fraxion is raising the bar. As a fully SOC 2 compliant P2P solution, Fraxion is built with security, transparency, and operational efficiency at its core. 

Fraxion’s platform is designed specifically for finance teams, offering “procurement in a box" with internal controls for establishing policy and budget control, along with simplified processes that extend procurement efficiency company-wide. It offers purchasing, expense, and AP automation in a centralized, secure system. With complete visibility, spend analytics, and reporting power, Fraxion users can make informed decisions that drive cost savings.

And what sets Fraxion apart? How smoothly it integrates security with usability. With data encryption, access control, and security protocols, finance leaders can rest assured they have robust controls and compliance features without sacrificing the ease of use and efficiency required for everyday procurement tasks. 

Fraxion doesn’t just check compliance boxes—it equips business leaders with the tools to stay ahead of risk, reduce complexity, and gain full visibility and control over spending, all without compromising on usability. Trusted by mid-sized companies across industries such as education, agriculture, non-profit, healthcare, and more. Fraxion empowers users to make smarter, more compliant procurement decisions with ease.

See why Fraxion is the secure, compliant procurement solution your team can rely on. 

Book a demo today.