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What Is an Order Book?

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  • Written By: C. Daw
  • Edited By: O. Wallace
  • Last Modified Date: 15 September 2016
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An order book is used to maintain the records of trades and business orders, mainly the ones that are currently, or will be, going out to the customers purchasing a product. It contains a comprehensive list of all the orders that are completed, that need to be shipped, or that have been shipped. There are basically three different areas that the order book will cover, and each of them is in the various stages within the processing and shipping stages. They can also contain the margin and profitability analysis figures so they can easily be accessed, along with the orders that are currently being processed or sent.

Most businesses that offer products to their customers will eventually have to deal with large orders, which could include shipping the products out. Since there are more and more people buying goods online, there is a greater demand for products to be shipped, which also increases the need for companies to have an order book to keep track of it all. The first area that the book will cover begins with the orders that have been received and need to be sent out to the consumers. This section allows the managers of the company to see what orders are next in line to be processed and shipped.

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The second section of the book will contain the items that have been shipped. The order book will show what products have been shipped to which customer, so that the in stock inventory is keep accurate. This section also allows the management team to track the progress of the orders, and to allow them to send notifications out about the shipping date, and the expected arrival date, as well as tracking numbers for the boxes if they were required. It also allows the company to see how fast it is to turn the orders into shipped orders.

The final section of the order book that deals with the shipping end of the business will cover the orders that have been received by the customers. This allows the company to ensure that the orders are completely fulfilled, as well as allowing them to refer to the specific order if the customer should make any complaints, or demand a refund. The completed orders are listed by dates, as well as by an assigned customer number, so it is easy to access any specific order or customer when the need arises.

Another section that can commonly be found within the order book details the margin analysis computations, and another that shows the profitability analysis figures. The margin analysis shows how well the pricing strategy of the company is working, meaning that it shows the amount of money made per each item. The profitability analysis shows a similar fact, except that it takes into account all the costs that are incurred by the company, rather than just the difference of the cost and selling price. These two reports allow the managing team to quickly and accurately see how well the product is doing when it comes to making a profit for the company.

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