Backlog definition

What is a Sales Backlog?

A backlog is the aggregate sale value of all received customer orders that have not yet been shipped. A backlog is present when the production capacity of a business is less than the rate at which orders are being received. The trend line of the backlog can be monitored to see if it changes over time. An increasing backlog indicates a substantial order book that will eventually translate into future sales, or a decline in production capacity. A declining backlog indicates that there will eventually be a drop in sales, or that the production capacity of the business has increased. In the area of trendy consumer goods, the seller might attempt to artificially maintain a small backlog, which gives the impression that a high level of demand exists for the product.

What is a Work Backlog?

A business may have a work backlog that is not directly related to the generation of sales. Instead, this is simply a buildup of work activities that are not being completed on time. For example, it could refer to the stack of work piled up in front of a loan processing agent, or perhaps a large number of investor calls that an investor relations officer has been unable to return. A business will have backlogs throughout its operations on any given day, though only a few will have a direct impact on the organization’s ability to conduct business in an effective and efficient manner.

What is a Backlog in Project Management?

In project management, a backlog refers to the tasks remaining that must be completed before a deliverable is finalized. For example, the backlog for a software development project could refer to the remaining software tests that must be conducted before the code can be delivered to the customer or in-house user. Or, the backlog for a construction project might include the supervisory reviews for wiring and plumbing, followed by an inspection by a city inspector, followed by dry walling, and so on. In project management, backlog items are typically prioritized based on their level of urgency.