Glossary
Statement of work
A statement of work (SOW) is a document that describes the specific work, deliverables, timeline and fees for one project.
A statement of work, often shortened to SOW, describes one piece of work in detail. It usually covers the scope, the deliverables, milestones, deadlines, acceptance steps, fees and who is responsible for what on each side.
An SOW commonly sits under a master services agreement. The master agreement holds the legal terms that apply to every project, such as liability, IP and confidentiality. Each new project then only needs a new SOW, which saves renegotiating the legal terms each time. The master agreement usually says which document wins if the two conflict.
A clear SOW helps both sides spot scope creep. If the client asks for something not in the SOW, it is commonly handled as a change request with its own fee and timeline.
Example
An agency signs one master services agreement with a retailer, then agrees a separate statement of work for each campaign it runs.