While it is convenient for the respective departments to be concerned solely with purchase orders or sales orders, the fact of the matter is that. from the point of view of the organization, these are both examples of Contracts. A contract is a “binding agreement between two or more persons or parties; especially one legally enforceable. In sales orders, we are being obligated to provide a service or product to someone else. In purchase orders, we are obligating someone else to provide a product or service to us. The only difference is the role we play.
Contracts (also called “agreements”, “orders”, and more specific names as well) itemize what is to be delivered and the terms (usually payment terms) to be followed. This is via