Contractor Finance Glossary
What is Backlog?
Definition reviewed .
Also called: work on hand, signed backlog
Backlog is the total value of signed, contracted work that has not yet been performed, and it is a contractor's direct forward view of revenue and crew demand.
Backlog answers the question a P&L cannot: how much work is already sold but not yet done. Lenders, bonding companies, and buyers read it as the health of the pipeline, because it shows whether the crew has months of committed work ahead or is about to run dry.
Backlog quality matters alongside size: check margin, planned start, cancellation exposure and capacity. Flag signed jobs with no activity after an owner-chosen delay beyond planned start and confirm whether the work still proceeds.
How it is calculated
Backlog = signed contract value including approved changes minus revenue already earned on that work. Exclude unsigned awards and pending changes from committed backlog; report signed-not-started separately from in-progress. Backlog months = backlog divided by average monthly revenue earned from comparable backlog-type work, or use a separately labeled scheduled burn. Do not mix unrelated service revenue into that runway denominator.
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