The Statement of Work

22 January 2011

A statement of work that is provided to your third party vendors will help them understand your company’s needs better. This formal document is part of the communication plan a company should have documented.

With a statement of work on hand, it can be used by your third party vendors as a reference to help fill you needs. The chances of a mistake or misunderstanding are reduced. Just like if an organic farmer was to order fertilizer. The supplier would know not to send any phosphate compounds and only fertilizer from natural sources.

Mistakes cost both time and money on both ends of the supply chain. With a properly worded and constructed statement of work, both of these will be accomplished. To assist those business that need to develop this document or change an existing one, there are templates that can be used to save even more time.

A statement of work template will include a section that will define the type of supplier the business wishes to do business with. It will also have a space for the materials and equipment that will be needed in the present time and in the foreseeable future.

The statement of work template will additionally provide information on the specification that involve the delivery of said items including where, when and the quantities that will be required. These are very important to spell out so no misunderstandings occur, or they are kept at a minimum at the very least.

Another important piece of data that must be clearly stated in the statement of work is the terms and conditions of payment for all items that are to be received. In most cases, this falls into two distinctive categories. Many businesses prefer payment upon delivery. Those with established business relationships allow for payment to be made within 30 days. In both cases, this needs to be spelled out in non-ambiguous terms so both parties involved will know when the payment is to be expected.

The statement of work is a very important document in a business communication plan. This will help the receiving of goods and service to run smoother, and reduce the number of delays that could be attributed to your supply chain.