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In this video tutorial, Theo from buildersdocuments.com explains how to use a purchase order template, which is a straightforward spreadsheet for entering contractor and supplier information to issue purchase orders for projects. He shares insights from his early experiences, noting that he initially viewed purchase orders as unnecessary, believing that verbal agreements or emails sufficed. However, he emphasizes the importance of a formal purchase order as a reference document that clearly outlines the specifics of the contract price for both the contractor and the builder or supplier, ensuring clarity and accountability in the transaction.