Updated 2026-05-19

Statement of work

A document that says what work will be done and how it will be accepted and billed.

Why it matters

A statement of work can determine whether an invoice is tied to deliverables not yet completed, making it ineligible for factoring. If an invoice is issued against a milestone in a statement of work but the deliverable has not been accepted, the invoice is contingent and may be treated as unverifiable. Consulting, IT services, and staffing companies frequently invoice against statements of work. Factors for these industries evaluate whether the billed milestones are actually completed and whether the customer has acknowledged acceptance before approving invoices for funding.

How it appears in contracts

Statement of work documentation requirements in factoring agreements appear in the Eligible Receivables or Verification section. The agreement may require that a statement of work be on file for each customer before invoices from that customer are funded. Milestones must be accepted by the client before the related invoice is submitted; conditional or anticipated acceptance is not sufficient. Sellers should maintain clear records of client milestone acceptance, whether by formal sign-off document, email confirmation, or portal-based acceptance, to ensure funded invoices have the support documentation required under the factoring agreement.

Related terms

• Milestone billing
• Approved invoice
• Invoice verification
• Eligible receivable