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August 13, 2020

Q: What are the benefits of a Master Services Agreement? How does it affect Work Orders / Statements of Work?

Master Services Agreements (MSAs) or Service Level Agreement (SLA) have many benefits, including the ability to separate out Work Orders (WOs) or Statements of Work (SOWs) from the overarching contract.

Ask Liquid: What are the benefits of a  Master Services Agreement?  How does it affect Work Orders / Statements of Work?

Compliance Freelancer Management Ask Liquid

A Master Services Agreement or MSA is a contract between two parties that establishes most of the terms between the parties to the agreement. MSAs are also referred to as Service Level Agreement (SLA). The greatest benefit of MSAs/SLAs is simplifying negotiations.

Benefits of an MSA or SLA

  • Save time and money every time you start a new project with a vendor – legal terms only need to be negotiated one-time, not for every project
  • Provide clarity on terms as the MSA takes priority over any conflicting or additional legal terms that might be included in SOWs, Work Orders, or invoices
  • Help reduce litigation risks and contractual disputes through more a more robust and standardized contracting process

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Using a MSAs allows you to separate out SOWs or Work Orders

When you sign an overarching MSA with each of your vendors, you are able to agree to project-specific details via individual SOWs or Work Orders (WOs). This means you no longer have to renegotiate the overall engagement each time you want to start a project. Using Liquid’s Work Order creation form you can quickly send off and agree to project-specific terms such as milestones, deliverables, rates, fee schedule, and more. This allows you to start new projects when you need them because the Work Orders are automatically tied to your MSA. 

Work Orders should be tied to MSA automatically

When you use Liquid, the specific MSA you have in place with a vendor is automatically tied to every Work Order for that vendor. That means that the overall terms of your engagement — payment terms, confidentiality, etc — automatically apply to every Work Order. In addition, all invoices in Liquid are tied to Work Orders so you’ll reduce the risk of paying an invoice outside of the scope of work. The MSA supercedes any conflicitng legal terms in your work orders, so it’s important to use a MSA that has been reviewed by legal counsel.

Ready to start executing Master Services Agreements with your contractors, freelancers, and vendors? Try Liquid today

Category: Compliance Freelancer Management Ask Liquid

Updated: August 13, 2020

Quick note: This is not to be taken as tax advice or legal advice or payroll advice. Since tax rules and laws change over time and can vary by location and industry, consult a CPA / tax advisor and/or attorney for specific guidance.

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