An often overlooked document in IT projects is the statement of work or SOW. A SOW is actually a crucial document that doesn’t have to be overly complex to serve its purpose.

Here are four reasons why having a SOW on all your future projects is valuable:

  1. Increase value perception
  2. Get clarity on deliverables
  3. Get clarity on scope
  4. Receive faster payment

Increase Value Perception

Using a SOW and reviewing it with the client just simply makes you look more professional. It signals “We’re organized and we take our work seriously. You’re in good hands.” The client will likely view you more favorably and that helps to justify the value of what they are paying for.

Get Clarity on Deliverables

A SOW provides a clear definition of what the deliverables of a project are. This helps the client understand in concrete terms what they get as a benefit of the project. Well-defined deliverables make it clear if the project was completed and if it was a success.

Get Clarity on Scope

The added benefit of clear deliverables is a clear scope of work. Technology projects have a high tendency to scope creep. Scope creep isn’t inherently a problem, but if the scope changes without a change request you’re in trouble. If you have a strong scope of work that has been reviewed with the client, you can charge for the scope change. This ensures the work gets done and you remain profitable.

Receive Faster Payment

When the client is clear about the value being delivered by the project and what a completed project looks like, there is less room for confusion. The client will have greater confidence in your ability to deliver on the project deliverables.

This should allow for you to bill upfront on a fixed fee basis rather than waiting for project completion before being paid. Even if you don’t bill upfront using the fixed fee method, you’re likely to get paid faster on delivery.

Being organized and professional using a SOW will help avoid the client holding the project payment hostage because they are unclear on what the completed project looks like.

Todd Kane has spent over a decade developing a management framework to help managed service providers increase their margins and reduce employee turnover. His company, Evolved Management, provides guidance and resources to enable MSPs to reach their full potential.