BROWSE

Backlog

What is a 'Backlog'

A backlog is a buildup of work that needs to be completed. The term "backlog" has a number of uses in finance; it may refer to a company's sales orders waiting to be filled or a stack of financial paperwork that needs to be processed, such as loan applications. When a public company has a backlog, there can be implications for shareholders because the backlog may have an impact on the company's future earnings, as it is unable to meet demand. Next Up Back Order Atlanta Fed Index Foreclosure Filing Delinquent Mortgage

Explaining 'Backlog'

A backlog is generally a situation that companies want to avoid. However, the presence of a backlog can have positive or negative implications. A rising backlog of product orders might indicate rising sales. On the other hand, it could suggest increasing inefficiency in the production process. Likewise, a falling backlog might be a portentous sign of lagging demand but may also signify improving production efficiency.

How a Backlog Works

Consider a company that sells printed T-shirts. It has the capacity to print 1,000 T-shirts each day. Typically, this level of production is right in line with the demand for the company's shirts, as it receives approximately 1,000 daily orders, give or take.

Two Types of Backlog Examples

The 2008 housing crisis resulted in a backlog of foreclosures in which lenders had large inventories of residential properties they needed to sell and get off the books. With homes going into foreclosure at a much faster rate than usual, lenders did not have the capacity to process all the foreclosures in a timely manner. In many cases, these lender backlogs resulted in situations where delinquent borrowers were able to remain in their homes for several years without making any mortgage payments. The housing recovery did not begin in earnest until such backlogs were mostly cleared.


Further Reading


Harnessing private funds to alleviate the Australian local government infrastructure backlog
onlinelibrary.wiley.com [PDF]
… Assistance) Act 1995, the House of Representatives Standing Committee on Economics, Finance and Public … as viable approaches to financing the Australian local government infrastructure backlog, the paper … Chandavarkar, A. (1994), Infrastructure Finance: Issues, Institutions …

Explaining the Australian local government infrastructure expenditure backlog: a market failure approachExplaining the Australian local government infrastructure expenditure backlog: a market failure approach
onlinelibrary.wiley.com [PDF]
… Assistance) Act 1995, the House of Representatives Standing Committee on Economics, Finance and Public … as viable approaches to financing the Australian local government infrastructure backlog, the paper … Chandavarkar, A. (1994), Infrastructure Finance: Issues, Institutions …

Sales order backlog and corporate cash holdingsSales order backlog and corporate cash holdings
www.emerald.com [PDF]
… Assistance) Act 1995, the House of Representatives Standing Committee on Economics, Finance and Public … as viable approaches to financing the Australian local government infrastructure backlog, the paper … Chandavarkar, A. (1994), Infrastructure Finance: Issues, Institutions …

Strategies to clear road maintenance backlogStrategies to clear road maintenance backlog
www.icevirtuallibrary.com [PDF]
… Assistance) Act 1995, the House of Representatives Standing Committee on Economics, Finance and Public … as viable approaches to financing the Australian local government infrastructure backlog, the paper … Chandavarkar, A. (1994), Infrastructure Finance: Issues, Institutions …

Optimal inventory system with two backlog costs in response to a discount offerOptimal inventory system with two backlog costs in response to a discount offer
www.tandfonline.com [PDF]
… Assistance) Act 1995, the House of Representatives Standing Committee on Economics, Finance and Public … as viable approaches to financing the Australian local government infrastructure backlog, the paper … Chandavarkar, A. (1994), Infrastructure Finance: Issues, Institutions …

Are investment activity and backlog in investments risks for university medicine in Germany?Are investment activity and backlog in investments risks for university medicine in Germany?
www.ncbi.nlm.nih.gov [PDF]
… Assistance) Act 1995, the House of Representatives Standing Committee on Economics, Finance and Public … as viable approaches to financing the Australian local government infrastructure backlog, the paper … Chandavarkar, A. (1994), Infrastructure Finance: Issues, Institutions …



Q&A About Backlog


When should you add an item to your software development backlog?

You should add an item when it has been identified as something that will need to be addressed during the life cycle of your project or product.

Why would you want to manage your backlog effectively?

To ensure that all important items are included in the project plan and get completed by their due dates.

Why might an inventory backlog cause concern among shareholders?

An inventory buildup may suggest poor management practices or declining demand for products or services.

What are some examples of items on a software development backlog?

Some examples include features, bugs, and tasks.

What is a backlog?

A backlog is a buildup of work that needs to be completed.

What does the term "backlog" have a number of uses in finance?

The term "backlog" has many uses in finance, including sales orders waiting to be filled and financial paperwork that needs to be processed.

How can the term "backlog" refer to a company's sales orders waiting to be filled?

When there are large numbers of unfulfilled orders for products or services, it can indicate future revenue growth potential for the company.

How does the term "backlog" refer to stacks of financial paperwork that need processing?

Backlogs of financial paperwork may indicate problems with cash flow management and debt collection issues.

What does backlog refer to in the context of software development?

In the context of software development, backlog refers to a list of work that needs to be done.

Did these lender back logs result in situations where delinquent borrowers were able answer questions about how long they would remain in their homes without making any mortgage payments?

Yes, these lender back logs resulted in situations where delinquent borrowers were able stay in their homes without making any mortgage payments because banks did not have enough capacity within their systems at this time due primarily to high foreclosure rates at this time." Question

What impact might an inventory backlog have on shareholders?

An inventory backlog could negatively affect shareholder value if it indicates poor management practices or declining demand for products or services.

How do you define a backlog?

A backlog is defined as a list of work that needs to be done.

What happened during the housing crisis as lenders had large inventories of residential properties they needed to sell and get off their books?

During the housing crisis, lenders had large inventories of foreclosed homes they needed to sell and get off their books quickly due primarily to high foreclosure rates at this time.