Statement of work
A statement of work defines one piece of work under a master services agreement: scope, price, dates and how it is charged. It is where the money is.
Commitment: Carries the money and the dates. The only role counted in spend.
Key takeaways
- Count each statement of work in spend, once.
- Record how it is charged: fixed fee, time and materials or milestones.
- Link it to its master agreement so the governing terms are known.
What does a statement of work commit?
The price and the dates for one engagement. Time-and-materials work commits a rate rather than a total, so its spend is variable.
A statement of work with no master agreement on file has unknown governing terms, which the register flags.
How does it end?
Most end when the work completes or on a set date and do not renew. Doing nothing lets them lapse.
What to record
- Total or rate and pricing model
- Start and end dates
- Its master agreement
Frequently asked questions
Is a time-and-materials SOW forecastable?
Not from its terms alone. The rate is known, the hours are not, so it counts as variable spend.
General working knowledge about commercial contracts, not legal advice. Your own agreement governs.