How to Write a Statement of Work (SOW)
It’s essential to have a clear SOW. Here’s how to write it, whether SOW means Statement of Work or Scope of Work to you.
Let’s focus on the Statement of Work (SOW), now that you have an Independent Contractor Agreement in hand. Ensuring that the SOW is clear and well-written is critical because it represents the core of an agreement between a hirer and a freelancer within a project.
Statement of Work (SOW), Scope of Work (SOW), or Engagement of Services? Or Work Order (WO) or Service Order (SO)?
The Statement of Work (SOW) is also commonly referred to as a Scope of Work (SOW) by freelancers and Engagement of Services by attorneys. Other industries use the terms Work Order or Service Order.
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Definition and Purpose of the Statement of Work
A Statement of Work is a document that states the work and the circumstances (i.e., timelines or budgets) in which the work is to be done by the contracted party(ies). The SOW not only describes the work to be done but also sets performance expectations. Without a Statement of Work, it is difficult to define what, when, why, and how a project is considered to be successful which often leads to misunderstandings and disagreements. The clearer a Statement of Work is, the better off both parties are.
What to Include in the Statement of Work
You can have a Statement of Work in place between you and the freelancer, but surprisingly still have conflicts and misunderstandings about what the project deliverables are. To set the right tone for the project, it’s best to establish mutual understanding by outlining the following components in a clear and concise way:
1. The purpose
Defining the purpose of the project helps the freelancer to understand the context in which the work is to be done. It clarifies how a project deliverable is a solution to the client’s current problems.
Here are a few examples of SOW purpose sections:
- to design a functional website that outlines the 3 service packages that a marketing agency provides to help start-up companies optimize their marketing campaigns.
- to research and present software options for project management so that the Client can decide which solution to implement for its 30-person environmental engineering firm.
- to create a 3-year financial model for Client to give Client more insight into financial planning and forecasting.
2. The services and deliverables
Outline services and deliverables with as much relevant and specific information as possible. That includes:
- what the deliverables are
- how and where they will be provided
- how to measure the completion of the deliverables
If there are various deliverables along the way, all need to be specified as well.
For example, imagine you are contracting with a web designer to design specific website pages. Instead of noting “website design” you might write “one Home Page + one About page website design on WordPress.com; Contractor will provide 5 high-level designs directly on the Client’s WordPress site within 1 week of project kick-off. After the Client selects 1 design and provides comments, the Contractor will complete up to three rounds of edits. The Client is responsible for providing images, copy, and web hosting.” This additional detail helps ensure that expectations are clear, which is the foundation of a successful freelance engagement.
3. Timelines of all the major steps
Timelines are necessary to set clear time expectations from the beginning to the end of a project. Including the date by which each deliverable will be completed and/or the length of time necessary for a specific task, activity, or phase when applicable is essential.
If not specified, a client might think that a deliverable takes X amount of time to complete, whereas the freelancer thinks that a reasonable time is Y.
For the website design project, a timeline might look like this:
- Client will provide content and assets by February 15
- First draft of website design ready for review by March 2
- Client will provide the first round of feedback by March 5
- Edited website page design ready for review by March 7
- Client will provide a second round of feedback by March 10
- Final version to be delivered by March 15
Tasks can be considered as activities or “mini-deliverables” that have to be done to complete the actual deliverables defined in the Statement of Work. They are a means to an end, but still are work to be performed. Therefore, it is essential to be clear when describing tasks for deliverables.
Since they are mini-deliverables, specific requirements applicable to each of the tasks still need to be outlined, i.e., timelines and any particular resources.
So, if you are hiring a WordPress designer to make Home and About Pages for your website, one task (mini-deliverable) might be: include a “Call to Action” button and Form, which would ultimately be included within the Home Page. This deliverable would list its specific purpose, due date, and deliverable details.
Similarly, denoting the use of specific software or equipment is critical if a particular workflow is needed. For example, if your team’s shared folder system is in Google Drive, you may want to include a line like “Content and assets will be delivered to the Contractor via Google Drive.”
5. Costs and Payment Methods
Money is often a sensitive subject, but it is important to be clear on the costs, the payment schedule, and the payment methods upfront. Your business may prefer to structure payments due upon delivery, while other companies may prefer to make separate payments for each deliverable. In some instances, you might even be willing to pay an upfront deposit.
6. Out-of-Statement Work
Last but not least, when writing a Statement of Work, it is also helpful to define what is out of scope for the SOW. Without clear boundaries, you may be subject to unexpected charges if a freelancer decides to complete additional work that you did not intend for the freelancer to do.
7. Clear and Concise in its entirety
Your Statement of Work is now done! Now, it’s time to do a final check on the following:
- Consistency: Ensure that the same words are used to refer to the same things throughout the document.
- Concise: It is important to include detailed information throughout the Statement of Work, but all the details must provide clarity. If there are too many details, and they create confusion rather than provide clarity, consider deleting them.
Create SOWs in Minutes
Regardless of what term your company uses — Statement of Work (SOW), Scope of Work (SOW), Engagement of Services, Work Order (WO), or Service Order (SO) — Liquid allows you to create SOWs in minutes, instead of hours.
Download Liquid’s Independent Contractor Agreement Checklist as a handy reference guide.
Ready to create Statements of Work / Scopes of Work (SOWs) in minutes? Request access to Liquid beta now to get started.
Note, we are not providing legal, tax or payroll advice. Please consult your legal, tax and payroll professionals. These are simply to serve as guidelines based on our own experiences.
Category: Freelancer Management
Updated: February 11, 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.