What Finance Teams Need to Know About DPAs and SOC 2

You don’t need to be a lawyer to stay compliant, but you do need visibility.

Compliance Is No Longer Just Legal’s Job

Ask most finance leaders how confident they feel answering questions about DPAs or SOC 2, and you’ll get the same response: a nervous laugh, a half-guess, or a Slack message to Legal.

But that’s not going to cut it anymore.

As finance teams take on more responsibility for vendor management, budgeting, and risk mitigation, understanding compliance frameworks like Data Processing Agreements (DPAs) and SOC 2 certifications is no longer optional. It’s a critical part of controlling vendor sprawl, reducing risk, and staying audit-ready.

This guide breaks down the essentials, in plain English, so your finance team can confidently own your side of the compliance conversation.

Why Finance Teams Are Now on the Hook for Vendor Risk

Traditionally, vendor compliance sat squarely with Legal or IT. But that model doesn’t work anymore, especially in fast-moving companies where new tools are purchased weekly and renewals happen on autopilot.

Here’s why Finance is increasingly involved:

• You manage the vendor stack and budget. You’re signing off on spend, which means you need to understand what comes with that spend — including risk.
  
  

• You’re accountable for ROI. If a tool isn’t compliant and the business can’t use it, that’s wasted money.
  
  

• You’re part of the audit trail. SOC 2 audits now ask: “How do you manage third-party vendors?” That includes financial controls and renewals.
  
  

• You’re often closest to procurement workflows. Intake, approvals, renewals — Finance sees it all. That makes you the natural control point for compliance enforcement.
  
  
  

Let’s Start with DPAs: What They Are, and Why They Matter

What is a DPA?

A Data Processing Agreement (DPA) is a legally binding document that defines how a vendor (the data processor) will handle personal data on behalf of your company (the data controller).

You’re required to have a DPA in place with any vendor that processes personal data, especially under regulations like GDPR or CCPA.

Examples include:

• Your CRM (e.g. Salesforce, HubSpot)
  
  

• HR tools handling employee info
  
  

• Customer support platforms with chat transcripts
  
  

• Analytics tools storing IP addresses or behavior data
  
  

If the vendor touches any personal data, a DPA is required.

What’s in a DPA?

DPAs outline:

• The types of data being processed
  
  

• The purpose of data processing
  
  

• Security measures in place
  
  

• How long data will be stored
  
  

• Rights and responsibilities around deletion, access, and breach notification
  
  

• Whether subprocessors are involved (and how they’re managed)
  
  

They’re usually signed during onboarding, but here’s the kicker: DPAs can change, especially when vendors add new subprocessors or update their privacy policies.

If you’re not tracking them, you could miss critical changes and lose compliance standing.

Why Finance Should Care

Let’s say your company uses a customer success platform. Your team signs the contract, the vendor gets access to personal data, and everything seems fine.

But if there’s no DPA in place, or it’s outdated, you’re technically violating GDPR. That puts the entire company at risk, and the liability could sit with whoever approved the vendor.

If you’re managing vendor approvals or tracking spend, you need to know:

• Does this vendor require a DPA?
  
  

• Do we have one on file?
  
  

• Is it current and signed?
  
  

• Are there subprocessors involved?
  
  

• Will we be notified if those subprocessors change?
  
  

You don’t have to review the DPA line by line, but you do need visibility and documentation.

Now Let’s Talk About SOC 2: Your Go-To Security Certification

What is SOC 2?

SOC 2 (Service Organization Control 2) is an independent audit framework developed by the AICPA. It assesses a vendor’s security and data handling practices across five “Trust Services Criteria”:

1. Security
   
   

2. Availability
   
   

3. Processing integrity
   
   

4. Confidentiality
   
   

5. Privacy
   
   

Most vendors will get certified for the first two — security and availability — though more mature companies aim for all five.

There are two types:

• SOC 2 Type I: Snapshot in time (have controls been designed?)
  
  

• SOC 2 Type II: Tested over a period (are controls operating effectively?)
  
  

Why It Matters to Finance

SOC 2 is quickly becoming a baseline requirement for software vendors, especially those serving regulated industries, enterprise clients, or companies handling customer data.

Here’s why Finance should care:

• If your vendor isn’t SOC 2 certified, it may not pass your own audits, which could affect your ability to sell into certain markets.
  
  

• SOC 2 status can change. Vendors get certified once, but they don’t always maintain it. If they let it lapse, you need to know.
  
  

• You’re often asked for SOC 2 reports during due diligence, vendor reviews, or compliance audits — and if you don’t have them on file, that delays everything.
  
  

What to Look For in a Vendor’s SOC 2 Report

When reviewing a SOC 2 report (or asking Legal/Security to review it), look for:

• Is it Type I or Type II? (Type II is stronger)
  
  

• What’s the audit period? (Is it recent?)
  
  

• Who performed the audit? (Reputable firms matter)
  
  

• Are there any exceptions noted? (Control failures?)
  
  

• Do they cover data centers, subprocessors, or third-party dependencies?
  
  

You don’t need to dig into every detail. But knowing whether a vendor has a report, and whether it’s current, should be part of your renewal and intake checklist.

How DPAs and SOC 2 Tie Into Vendor Management

If you’re already handling vendor approvals, budgets, and renewals, compliance is the next logical layer.

Here’s how to incorporate DPAs and SOC 2 into your workflow.

1. Track Them in One Place

Stop burying DPAs and audit reports in random folders. Use a central vendor system (or even an Airtable or Notion doc to start) that logs:

• Whether a DPA is required
  
  

• Where the signed DPA is stored
  
  

• SOC 2 status and expiration date
  
  

• Subprocessors listed in the DPA
  
  

• Who owns the vendor relationship

If Legal needs to review something, they should know exactly where to look. Same for auditors.

2. Make It Part of Intake and Renewal

Every time a new vendor is requested, your intake form should ask:

• Does this vendor process personal data?
  
  

• If yes, is there a signed DPA?
  
  

• Is there an active SOC 2 Type II report on file?

You can automate reminders to request these documents and trigger flags when they’re missing.

Same goes for renewals. Before renewing a vendor, double-check whether their DPA or SOC 2 status has changed.

3. Score Vendor Risk Based on Compliance

Vendors that process sensitive data but lack SOC 2 or a signed DPA should be flagged as higher risk. That doesn’t mean you can’t use them, but it does mean you need to route them through legal and security reviews.

Risk scoring gives Finance a way to:

• Prioritize reviews
  
  

• Flag high-risk vendors
  
  

• Report on compliance exposure to execs or auditors

It also strengthens your position during budgeting or consolidation decisions.

4. Stay Ahead of Expirations and Changes

SOC 2 reports expire every 12 months. Subprocessors change. DPAs get updated.

Set up automated reminders to re-review compliance docs on a set schedule, or tie alerts to contract renewal dates so you never miss a critical update.

Tools like BRM can help automate this tracking and trigger reviews before renewals or audits.

Bonus: How This Helps You During an Audit

When you undergo a SOC 2 or ISO audit of your own systems, one of the questions you’ll be asked is:

“How do you manage vendor risk?”

If you can show:

• A complete vendor list
  
  

• Risk scores
  
  

• Signed DPAs
  
  

• SOC 2 reports
  
  

• Subprocessor disclosures
  
  

• Centralized documentation

…you’re going to pass that section of the audit with flying colors.

It’s not just about checking boxes. It’s about demonstrating control.

Key Takeaways

✅ DPAs are required for any vendor that touches personal data — make sure they’re signed and stored

✅ SOC 2 is a minimum standard for any vendor handling sensitive info — track whether your vendors are certified

✅ Finance teams play a growing role in compliance by owning vendor visibility, spend, and risk

✅ You don’t need to be a legal expert — but you do need systems to track documents, flag gaps, and automate reminders

✅ Compliance is no longer siloed — it’s cross-functional, and Finance is at the center

TL;DR: Compliance Isn’t Just a Legal Checkbox Anymore

If your finance team owns vendor approvals, budgets, and renewals, you also own part of the compliance stack.

You don’t need to read every line of a DPA or understand every SOC 2 control. But you do need to know:

• What vendors process personal data
  
  

• Whether the right agreements are in place
  
  

• If audit documentation is current
  
  

• And what risk each vendor brings to the table

The key is building systems that do it for you.

Next steps: See how BRM can track and enforce compliance.

Read more on BRM for compliance here.

Or book a demo by clicking below.