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6 Min. Read

How to Write a Statement of Work: 8 Steps

A statement of work is one of the most important tools in a project manager’s toolkit.

For a singular document, it can save you a huge amount of time and trouble with your clients. But it also takes a lot of work to produce one, and even a small mistake can have big repercussions.

But what exactly is a statement of work? And how do you write one?

We’ll take you through the 8 steps of writing a statement of work so that you and your project team can start off your entire project with confidence.

Here’s What We’ll Cover:

What Is a Statement of Work?

Why Are Statements of Work Important?

The 8 Steps of Writing a Good Statement of Work

Key Takeaways

What Is a Statement of Work?

The first thing to concentrate on is giving a detailed overview of what a statement of work, or SOW, actually is.

When you’re starting a complex project, one of the first and most important steps is to outline and present your SoW to your client.

A SoW is a formal document that defines the entire project scope of your upcoming work. A typical document would show:

  • The project deliverables
  • Detailed tasks
  • The project budget
  • The overall timescale for the project
  • The period of performance
  • Any special requirements needed

This would then be presented to the client, an investor, or any other project manager.

An SoW can often be mistaken for a project charter. But you will use a project charter to accompany, rather than replace, a statement of work.

Your SoW will need to be an extremely detailed document as it will essentially lay the root foundations for the project plans. Think of it as the script from which your team will be reading - if you get something wrong then they’ll end up speaking gibberish.

Why Are Statements of Work Important?

SoWs provide an extra layer of detail that project plans and cost estimates don’t include. They are used to describe exactly what is being done and delivered in great detail.

They are a lot of work to complete, but it can save you even more time further down the road if you come into any difficulty with the client. It also helps you to keep on the right track as you can constantly refer to it throughout the process of your project.

Having a document with this level of detail also acts as a reassurance to your client of what you will be delivering to them. It ensures that there is a high level of communication and understanding and gives them a timeline of when they can expect the work to be completed.

As a project manager, it’s in your best interest to have this document. It allows you to point to and prove that the work you’ve completed is what you had originally agreed upon.

Whenever there is a conflict between a project manager and a client, it tends to be because there either wasn’t a statement of work, or it was a poorly constructed statement of work.

Uncertainty and ambiguity create tension, so a statement of work creates a clear understanding of what is expected.

The 8 Steps of Writing a Good Statement of Work

Writing a strong and detailed SoW is a skill that requires training. It’s vital that you get this right as mistakes in your statement of work can lead to large, potentially very expensive issues further down the line.

It is easy to find a SoW template online, but if you’d like to create a simple, well-defined statement of work then you should follow these 8 steps:

1. Introduce the Project

Every SoW should start with an introduction. This section will introduce each key stakeholder in the project. These would include:

  • The client
  • The agency
  • Any third-party stakeholders

You will also want to briefly define the project and the work that needs to be completed.

2. Define the Project Scope

Your document should always include a vision or the purpose of the project - a mission statement of sorts.

This is a great way to create goals and is a good opportunity to set achievable expectations for your client.

It’s then important to define the scope. This will be the foundation on which the rest of the planning process is built upon. It’s where you can align your goals and expectations between the agency and the client.

3. Set the Project Requirements

This is a relatively simple section where you will list the main foundational requirements that you will need for the project. You will need to list how these requirements will solve the problem for the end-user.

4. Set Your Deadlines

Setting your deadlines is another crucial point of your SoW. It may seem like an easy task, but being able to accurately estimate and track your time is harder than you think. Especially if you want to create a reliable end date.

Using reliable time tracking software such as FreshBooks can be a game-changer. It can make the difference between a project being completed on time, and a project running over and budgets being stretched.

5. Allocate Key Resources

Having a fully resourced project isn’t as simple as having enough resources - it’s about having enough of the right resources.

It’s important to assess what type of resources you will need for any given task within a project. Whether that be tools, equipment or even which workers should be allocated.

That’s why this section of your SoW should have a lot of consideration put into it.

6. Specify Your Budget and Terms of Payment

Anyone who is taking the time to read your proposal will want to know a breakdown of your project costs. This section should include how you intend to use your financial resources and also what your payment terms are.

Like any agreement which involves an exchange of money, you need to include how you wish to be compensated for the work you’re delivering. This could be your terms of payment and what date you expect to be paid by.

7. Include Any Special Requirements

Some projects will require special requirements that aren’t part and package of a standard project. This could include special security measures or any particular terms that the client would like you to follow.

8. Accepting & Signing

When the previous 7 steps have been completed and agreed upon, then all parties involved should accept and sign the SoW.

This is potentially the most important part of your SoW. Once the document has been signed it then becomes a legally binding formal document that both parties have understood and agreed to. It is useful for both parties to refer to if something deviates from the original agreement.

Key Takeaways

Having a well-defined statement of work is the first stepping stone towards creating and delivering a successful project.

It takes out any room for miscommunication or misunderstanding. This allows both parties to feel at ease that they will be creating something that they both agreed upon.

Are you looking for more business advice on everything from starting a new business to new business practices?

Then check out the FreshBooks Resource Hub.