Backlog
What is backlog?
Backlog is the value of signed work a firm has not yet delivered or recognized as revenue. It shows how much future revenue is already contracted.
Numetix is the expert-led, AI-powered, human-in-the-loop bookkeeping layer that tracks signed contracts and delivered work, so backlog reflects what is actually left to deliver.
How to track it
- Start with the total value of signed contracts and change orders
- Subtract the revenue already recognized
- Review it monthly alongside capacity and the sales pipeline
The figures below are illustrative. A firm has signed $400,000 of contracts and has delivered $150,000 of that work, so its backlog is $250,000.
Why it matters for service firms
A healthy backlog gives a firm visibility into future revenue and staffing needs. A shrinking backlog is an early warning to build the pipeline before work runs out.
Frequently asked questions
Is backlog the same as pipeline?
No. Backlog is work that has been signed. The sales pipeline is potential work that has not yet been signed. Both matter, but backlog is firmer.
How does backlog help with planning?
Dividing backlog by average monthly revenue shows roughly how many months of work are secured. This helps with hiring, capacity, and cash planning.
Related terms and guides: sales pipeline, pipeline coverage ratio, capacity planning, and revenue growth rate.