Definition
Backlog is the value of work under contract that has not yet been recognized as revenue (or not yet performed). It is often expressed as total contract value of signed contracts minus revenue recognized to date. It represents future revenue and is a key metric for capacity planning and forecasting.
Why It Matters
Backlog indicates how much work is in the pipeline and supports revenue and cash flow forecasting. Declining backlog may signal a need to ramp business development; growing backlog may require labor and capacity planning. Lenders and sureties often look at backlog relative to bonding capacity and resources.
Field Example
Contractor has three signed contracts: Job A $50,000 (not started), Job B $120,000 (30% complete, $36,000 revenue recognized), Job C $80,000 (not started). Backlog = $50,000 + ($120,000 − $36,000) + $80,000 = $214,000. That is the remaining contract value to be performed and recognized.
Calculation / Formula (if applicable)
Backlog = Sum over jobs of (Total contract value − Revenue recognized to date). Or Backlog = Contract value of uncompleted jobs (signed, not yet fully performed). Some define backlog as only unsigned but awarded work; the definition should be consistent.
Software Application
Report total contract value by job and revenue recognized to date. Backlog = sum of (contract value − revenue recognized) for active jobs. Support backlog by period (e.g., expected to perform in next 12 months) if dates are tracked. Export for management and lender reporting.
Tooltip Version
Backlog is the dollar value of work you have under contract but haven’t yet completed or recognized as revenue; it’s a measure of future work and revenue.
Related Objects
Related: