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In this video, Theo from buildersdocuments.com explains how to use a purchase order template, which is a simple spreadsheet designed for entering information related to contractors and suppliers to issue purchase orders for projects. He reflects on 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 purchase orders as a formal document that provides both contractors and builders or suppliers with a clear reference for the specifics of their contract and pricing details.