5. Prepare Purchase Order or Contract
A purchase order (PO) or contract is a legal instrument that documents the entire agreement between the buyer and the seller. If any dispute takes place, the PO or contract will be used to solve the dispute.

A purchase order is used to purchase materials whereas a contract is typically used to purchase services.

The purchase order or contract has to specifically define the agreed price, terms and conditions, and specification of the material or service and must be written to avoid any misunderstanding of expectations or obligations to perform by either party.

Accuracy is key in filling out documentation. View the sample Purchase Order.


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