I go with NB3 here. A simple requirements doc is the LEAST you need for doing a project, even if the customer is another department inside the company.
Data Flow diagrams can be handy to understand the system better but is usually no good for a customer. But I guess you lot can judge that better.
I'm don't know what you lot make, but don't say that making a functional/technical spec (no matter how simplistic) is lost effort for a project that small. You might be able to recycle those docs for another similar smallish project. But again, you can judge that better than me.
Only a verbal "contract" is teh bad because you have nothing you can fall back on when the customer changes his mind.
The rule of thumb we learn at school is "
make those things you REALLY need, and never make something that doesn't contribute to the understanding of the final system". Not very usefull in your situation, but hey
.