How to write a statement of work for any industry

One of the first documents to create for any new project is a Statement of Work. Because it must be a highly detailed document, the idea of writing one can be overwhelming. In this article we will break it down into simpler terms so that you can learn how to write a Statement of Work for any industry or project type:

• What is a Statement of Work?
• Why is a Statement of Work important? 
• How to write a Statement of Work
• The introduction
• Tasks and milestones
• Deliverables and expectations
• Schedule
• Payment
• How to close

A Statement of Work (or SoW) is a detailed document that outlines every aspect of the project you are about to undertake. The statement document should be signed off by the client before you begin any work. It will create the basis of your project planning. In it, you need to include the who, what, where, why and when of the work.

As a thorough overview of the project, the Statement of Work is a way to share every detail of the work with anyone else who has an interest, including the client and any suppliers or contractors who are involved. This ensures that everyone who is collaborating on the project is aware of all the moving parts, and has their expectations set at the same level.

The Statement of Work also keeps confusion and conflicts between interested parties at a minimum, because everything is laid out in detail ahead of time.

Below we will cover each section of the Statement of Work that you will need to complete. Here are a few tips to help you throughout the writing process:

Be specific at all times. Avoid generalising anything about the project and refer to specific tasks. You may also want to create a glossary of words, terms and abbreviations that you will be using throughout the document. This ensures that parties who are not familiar with industry terms understand your writing. 

Write with clarity, and include visuals where you can, to make it easy to understand. Make the Statement of Work as easily digestible for the reader as possible, and using visuals instead of words for relevant areas can help. Now, let’s get to the writing process.

Your introduction should cover four areas:

• An outline of the project, what work is being done and who is involved.
• The purpose – what is the reason you are carrying out the project?
• The scope of the project (what will be done, and how, including any machinery or software that is needed).
• Where the project will take place, i.e.: is there a specific worksite, or will a team be working remotely?

Break down the work into individual tasks that are needed to complete the project. Assign a person who is responsible for overseeing each task’s completion.

Then define the timeframe it should take for the project to be completed from start to end. If you are billing by the hour then detail this information here by billable time per week and month. If you are using suppliers or contractors that have a maximum amount of hours they can work on the project, then mention it in this section. 

Next, plot the project’s completion with milestones. Noting important stages when writing up your Statement of Work will break up the wider schedule clearly when you start to plan the project.

List the elements of the project which must be delivered, explain what they are in detail, and when they are due.

It’s also important to cover in the Statement of Work what the client thinks ‘success’ looks like, using specific measurements that you will eventually report on once work is complete. Clarifying what a successful finished project looks like puts everyone’s expectations on the same page, and reduces the risk of confusion or disappointment further down the line. 

This section must include a detailed calendar for the project. You can use project management software for this, but a simple Excel spreadsheet would also suffice. A Gantt chart is an excellent way to visualise the flow of each task to the next, see who is responsible for each task and the timeframe it will take to complete, all in one view.

A simple Gantt chart breaks down every task on the vertical cells, and your timeline sits above on the horizontal cells. Colour in the cells next to each task to show when the task begins and the length of time it will take to complete. 

It’s also very easy to share this document with other involved parties to show them what is expected of them, and by when, so that the project moves forward seamlessly.

This section should detail primarily how payment will be arranged, and at what stages of the project. 

Other financials should be disclosed here such as the cost of materials or any special equipment. Make sure to break down any costs per item and be as specific as you can.

List any other aspects of the project here which do not fit into the previous categories. This could include any regulations or certifications that employees need to get before work begins, any testing that needs to happen before completion or security measures to protect digital work. 

Lastly, you should list the sign-off process. How will deliverables and financials be agreed on and by whom? Making sure the sign-off process is agreed upon before work starts will streamline your progress.

Now that you are prepared on how to write a Statement of Work for any industry, find out how to save time everyday on your financial admin with Countingup. The business current account and accounting app provides instant invoicing and automated bookkeeping features, making it easier to run your business. Find out more here.