Projects can be messy. One day, everything’s running smoothly, and the next, you’re facing scope creep, budget issues, and teams unsure of their tasks. It’s a common nightmare for project managers, often because the project basics aren’t clear from the start.
Luckily, there’s a straightforward fix: a statement of work outlining project tasks, who’s making it, and by when. Think of it as your project’s instruction manual, a single source of truth that keeps everyone aligned.
When done right, your statement of work becomes the backbone of project success. And you don’t need to create yours from scratch. A ready-to-use statement of work template saves you hours and ensures nothing important gets overlooked. Let’s see how this template can streamline your project setup and help you stay organized.
What is a statement of work?
A statement of work lays out all project details in a legally binding document. The client and service provider sign this agreement to confirm their understanding of the project.
Everyone needs to understand:
- The required work
- Project deadlines
- Task responsibilities
- Project costs
- Expected deliverables
- Performance metrics
The statement of work goes beyond basic project planning. It protects both sides by clearly stating what the project scope includes and does not include. With everything spelled out in detail and signed by both parties, there’s less room for confusion or disagreement later.
Statement of work vs. other project documents
The statement of work is a crucial legal document in project management, but it’s often mixed up with other types of paperwork. Here’s a simple look at the different types of paperwork and when to use them.
Project charter
A project charter starts everything off with the big picture of what you want to achieve. It outlines your goals, main stakeholders, and basic timeline. A statement of work takes these high-level plans and turns them into detailed, actionable steps.
Request for proposal
A request for proposal helps you find the right team for your project. You send it out explaining project needs, and vendors reply with their approach and costs. After picking your vendor, you create the statement of work to nail down exactly how they’ll handle the project.
Framework agreement
A framework agreement sets ground rules for all work with a client, from payment terms to confidentiality. Your statement of work then fits under these general rules, detailing the specifics for each project you take on.
Project deliverables agreement
The project deliverables agreement lists what the client will receive from the project. The statement of work goes further by including how you’ll create these deliverables and the process, timeline, and needed resources.
Project status report
A project status report tracks your project progress, such as what you’ve done and what’s next. The statement of work comes first, setting up exactly what these reports will track.
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Why every project can benefit from a statement of work
You know what a statement of work is, but you might be thinking, “Do I really need one for every project?” The short answer is yes. From small vendor projects to big internal initiatives, a statement of work offers many benefits that can save you time, money, and stress.
Keeps everyone on the same page
When project expectations live in emails and verbal agreements, confusion follows. A statement of work eliminates guesswork by putting all the important details in a single document. Teams know what to deliver, clients understand what they’ll receive, and everyone works toward the same goals.
Prevents project scope creep
Scope creep kills projects. The statement of work creates boundaries around your project by defining what falls inside and outside the scope. When clients request changes, you can check the document to determine if they’re adding new work that requires additional time or money.
Streamlines approval and review processes
The statement of work sets clear checkpoints for project review and approval. Everyone knows who needs to sign off on deliverables and when. A streamlined process speeds up reviews and prevents bottlenecks that could delay your project.
Supports risk management and compliance
Writing a statement of work helps project managers discover potential problems early. By thinking through all project aspects up front, you can identify risks and how to handle them. Plus, the statement of work ensures compliance if your project involves regulatory or legal requirements.
Ensures successful project completion
A statement of work paves the way for successful project execution by clearly defining what you need to achieve. When you spell out your targets, you keep your whole team aligned and focused on producing what stakeholders expect.
When to use a statement of work
Every project can benefit from a statement of work, but certain situations make it especially vital, such as:
- New clients: A formal work agreement protects both sides when starting relationships with new clients.
- Risky projects: Legally binding plans help manage risks and prevent costly mistakes or surprises.
- Government contracts: Clear instructions ensure the project meets strict rules and requirements.
- Big internal projects: Defining goals, roles, and timelines keeps teams aligned and the project on track.
- Vendor work: Clear expectations ensure everyone understands the required tasks, deadlines, and quality.
When in doubt, err on the side of clarity and create a statement of work. Although it’s an extra step, it can save you time and trouble in the long run.
Choosing the right statement of work type
One size doesn’t fit all when it comes to a statement of work. The type you choose should match the project’s needs, goals, and structure. Here’s a quick guide to help you decide.
Fixed price
The fixed price statement of work is best when you know what you need and the project is unlikely to change. It’s like buying something with a set price tag. You agree on the scope of work and a total cost up front, no matter how much effort it takes.
For example, if you need a new logo for your bakery, you might choose a simple, modern design with your bakery’s name and a cupcake icon. With a fixed price agreement, you’d work with a designer and agree to pay $1,000 for the project. This way, you know what you’re getting and how much you’ll pay.
Time and materials
A time and materials statement of work is useful when the project scope isn’t fully defined or might change as the work progresses. Rather than set a fixed price, you pay for the time spent and materials used to complete the project.
For instance, if you’re renovating your bakery but aren’t sure what repairs might be needed, you’d agree to pay the contractor an hourly rate plus the cost of any materials. This approach gives flexibility for unexpected changes but requires close tracking to avoid going over budget.
Unit rate
The unit rate statement of work is a good fit when you can break the work down into measurable units, like hours worked or items produced. Instead of agreeing on a total price up front, you pay based on the amount of work done.
Let’s say you’re hiring a team to bake cookies for your bakery. You agree to pay $2 per cookie. If they make 400 cookies, you’d pay $800. This type of agreement works well for projects where the total amount of work might vary, but you need a precise rate for each unit.
Performance based
A performed-based statement of work document ties payment to expected outcomes rather than how the work gets done. You set clear targets, like system uptime or customer satisfaction scores, and the vendor chooses how to meet them.
For instance, if you hire a Marketing team to increase sales for your bakery, you might agree to pay them based on how much your sales grow. If they boost sales by 20%, they get paid a set amount, like $5,000. This type of agreement motivates team members to deliver results. It works well when you can clearly define and measure success.
Level of effort
A level of effort statement of work is a good idea for long-term projects or ongoing support services. Instead of paying for specific deliverables, you pay for the number of hours or the amount of effort a team will put into a project over a set period.
For example, if you need ongoing social media management for your bakery, you might hire a team to work 20 hours a week for 6 months. The focus is on their time and effort rather than a fixed outcome, allowing them to adapt their strategies and activities as needed to achieve the project goals.
Hybrid
A hybrid statement of work combines different payment types to manage complex projects more effectively. It’s especially useful for projects that involve multiple phases or evolving requirements.
For instance, you might use a fixed price for the core features of your website, like the homepage and product catalog. Then, you might switch to a level of effort agreement for ongoing website maintenance services. Or, if unexpected changes come up, you might use a time and materials approach to cover the extra work.
How to structure a statement of work
A well-structured statement of work provides a clear roadmap for the project. Here’s what to include.
- Introduction: Start with a brief overview of the project, including its purpose and start and end dates. Mention the client, vendors, or other parties involved and provide a summary of the work.
- Goals: Define the entire project’s objective and what you aim to achieve. Describe what success looks like for the project, including quality standards and measurable outcomes.
- Scope of work: Detail the specific tasks, activities, and deliverables included in the project. Clearly outline what the project does and does not include to avoid scope creep.
- Timeline and milestones: Map out when things need to happen, including due dates and dependencies. Break down the schedule into phases with clear milestones.
- Project responsibilities: Specify who handles each part of the project and makes decisions.
- Pricing and payment terms: Clearly define the estimated cost and payment schedule. Include any conditions, project performance requirements, or milestones tied to payments.
- Requirements: List any must-haves for the project, including technical details or specific business needs.
- Change management: Explain how you’ll handle scope creep, timeline, or budget changes.
- Communication plan: Set expectations for project meetings, status reports, and updates. Define how often you’ll communicate and through which channels.
- Acceptance criteria: Spell out how the client will review and approve deliverables. Include who needs to sign off and how long reviews will take.
- Signatures: Add signature blocks for all required parties to approve the document. Include names, titles, and dates.
Where to find a free statement of work template
You can find many free statement of work template websites with a quick online search. But for more reliable templates, try these trusted sources instead.
- Online project management tools: Popular tools like Asana include customizable templates for various project needs in their resource libraries.
- Microsoft Word and Google Docs: Both platforms provide template galleries with simple, editable statement of work options, making it easy to get started.
- Professional associations: Industry-specific organizations often offer templates tailored to their field, ensuring your project meets the right standards and requirements.
Ultimately, the best template for you depends on your needs. Consider Microsoft Word statement of work templates for simple projects, project management tools for teamwork, and professional templates for industry-specific tasks.
Statement of work example for real-world projects
Sometimes, the best way to grasp a concept is by seeing it in action. Let’s explore an example of a statement of work for a mobile app development project. This example will help you understand how to fill out your statement of work template.
Introduction
This statement of work defines the scope, deliverables, and timeline for developing a mobile app for [Bakery Name]. Work begins on January 1st, 2025, and ends on April 14th, 2025. Key parties include [Bakery Owner’s Name] and [Service Provider’s Name].
Goals
The goal is to create a mobile app for iOS and Android that enables online ordering, promotes bakery specials, and includes a loyalty rewards system. Measurables include app appearance, functionality, and on-time delivery.
Scope of work
Included:
- App design, coding, and deployment
- Features: Online ordering, push notifications, rewards tracker, and a product catalog
Excluded:
- Post-project support and maintenance
- Unrelated branding work
Timeline and milestones
- Start date: January 1st, 2025
- Milestone 1: Submit app designs by January 20th
- Milestone 2: Complete app development by March 20th
- End date: April 15th, 2025
Role and responsibilities
- Development team: Handles design, coding, and testing
- Project Manager: Provides branding materials and approves deliverables
Pricing and payment terms
- Total cost: $20,000
Payment schedule:
- 50% up front ($10,000)
- 25% after Milestone 2 ($5,000)
- 25% upon project completion ($5,000)
Requirements
- Process secure online payments.
- Encrypt user data during transmission and storage.
- Include a privacy policy outlining data security practices.
- Integrate with the existing website for real-time menu updates.
Change management
Scope, timeline, or budget changes should be in writing and approved. Additional costs may apply for changes.
Communication plan
- Weekly status meetings via Zoom
Key contacts:
- [Development Team Lead Name], [Job Title], and [email address]
- [Project Manager Name], [Job Title], and [email address]
Acceptance criteria
Deliverables will be approved by [Project Manager Name] within 5 business days of submission. Written approval is required to consider deliverables complete.
Signatures
Bakery Representative: ______________________ Title: ___________ Date: ___________
Service Provider: ______________________ Title: ___________ Date: ___________
Key takeaways
- Define your project: A statement of work acts as a detailed roadmap, clearly outlining your project’s goals, scope, and deliverables.
- Consider the advantages: Using a statement of work can help you prevent scope creep, manage expectations, and increase the chances of project success.
- Choose the right document type: You can pick from various statements of work types based on your project’s needs.
- Structure your document correctly: It’s best to break your statement of work into clear sections covering everything from your goals to approval processes.
Use a free statement of work template: Start with a statement of work template from trusted sources to save time and effort.