In business, SOW stands for Statement of Work, which is a document that outlines the deliverables and project goals of a business agreement. It is created to keep everyone on the same page about deadlines, scope of work, and project expectations. A good SOW functions as both a contract agreement and a project management tool. It helps clients and vendors to stay aligned and reach their project goals together. An SOW will also set the tone and expectations for a project by defining the structure of a project’s workflow, giving clarity on who will be providing feedback on deliverables and who will sign off on the project. SOWs define what each party will be assembling, creating, or delivering, as well as the deadline expectations for each deliverable. SOWs are commonly used along with a request for proposal (RFP), a document used to solicit sealed bids from potential vendors and service providers. SOWs can be broken down into three main categories: design or detail statement of work, performance-based statement of work, and time and materials statement of work. An SOW is created when assigning projects to non-employees.