What is the functional specification used for?

The functional specification is a project document created by the contractor that details how the client’s requirements (from the specification sheet) will be fulfilled.
It serves as a solution proposal and forms the contractual basis between both parties.

Usually includes:

• Requirement description
• Team members and responsibilities
• Prerequisites and conditions
• Implementation plan: how and when the project will be carried out

The level of detail varies depending on the project complexity and industry. It may range from a structural overview to a fully scheduled plan, including deadlines, resources, quality control, and project management aspects.