What is an order backlog?

A backlog is not always a problem. A healthy one means the order book is full. A backlog that grows faster than you can ship means customers are waiting longer than they were promised.

Order backlog vs backorder

• Order backlog: all confirmed orders awaiting fulfilment, whatever the reason. Some are simply scheduled for later delivery.
• Backorder: an order, or part of one, held because the product is out of stock.

Every backorder is part of the backlog. Not every part of the backlog is a backorder.

Why it matters

• It shows future revenue. The backlog is sales already won but not yet delivered or invoiced.
• It shows capacity strain. A rising backlog with the same team and stock means delivery is slipping.
• It guides promises. The size of the backlog sets how soon you can honestly promise a new order.
• It feeds forecasting. See sales forecasting.

How to measure it

Add up the value, or the number, of orders confirmed and not yet shipped. Many teams also track how old the oldest order is, because a small number of very old orders is often a sign of a stuck item or a missed promise.

Backlog divided by the average amount you ship each week gives a rough time to clear it. If you have $200,000 in the backlog and ship about $50,000 a week, that is around four weeks of work.

An example from product sales

Say a coatings manufacturer has 30 confirmed orders worth $240,000. Twelve ship next week, eight are scheduled for the month after at the customer's request, and ten are waiting on a pigment that is late.

The backlog is the whole $240,000. Ten orders are backorders. The sales manager now knows which customers to call about the pigment, and which orders are fine. Without that split, every order looks like a problem.

How to reduce an unhealthy backlog

• Call customers with late orders before they call you.
• Fix the shortage that is holding most of it, such as a supplier delay.
• Confirm delivery dates honestly at the time of order, using lead time.
• Ship partial orders where the buyer agrees.
• Stop accepting orders you cannot deliver in an acceptable time.

See how to manage backorders for the customer side.

Related terms

• Backorder: an order waiting for stock.
• Sales order: the confirmed order that makes up the backlog.
• Lead time: how long delivery takes.
• Reorder point: when to restock so backorders don't build up.
• Proof of delivery: the record that an order has left the backlog.

How PromptLab handles it

Each sales order sits on the account with its planned delivery date, trade terms, payment terms and a note, so you can see what has been promised and when. Ask AI answers plain-words questions about sales orders, and tasks keep every late order chased. Stock and production status stay in your ERP.

Frequently asked questions

What is an order backlog?

It is the confirmed customer orders that have not yet been delivered, counted as a number or a value.

Is an order backlog good or bad?

It depends on its age. A backlog of orders scheduled for the coming weeks is a sign of demand. One full of overdue orders is a delivery problem.

What is the difference between a backlog and a backorder?

A backorder is an order held because the product is out of stock. A backlog is all orders not yet delivered, for any reason.

How do you calculate order backlog?

Add up the value of all confirmed orders not yet shipped. Divide it by your weekly shipments to estimate how many weeks it will take to clear.

Does backlog count as revenue?

Not yet. It is expected revenue. Under the main accounting standards, revenue is recognised when control of the goods passes to the customer, often at shipment or delivery depending on the terms, so check with your accountant.