Backlog

Backlog is one of the most closely watched sales KPIs by management: it measures how much revenue is already contracted for the coming months or quarters. A high backlog gives revenue visibility, allows hiring and capacity planning, and reassures investors and lenders.

A low backlog, even with a rich pipeline, signals near-term top-line risk. Consulting firms monitor backlog coverage: the ratio of backlog to annual revenue target. A 70-80% coverage at the start of the year is considered healthy for T&M models, above 90% for more recurring models.

Backlog is more useful when it is expressed in the same units as the capacity plan. A firm cannot deliver euros, it delivers people, so the same contracted revenue can be comfortable or impossible depending on which roles it consumes and when it starts. Translating backlog into senior weeks, junior weeks and specialist weeks by month turns it from a reassurance into an input for hiring.

Quality matters as much as quantity, and aggregate figures hide it. Backlog concentrated in two clients carries a very different risk profile from the same amount spread across fifteen, and backlog that depends on options the client can decline is not the same as signed commitment. Reporting concentration and cancellability alongside the headline number is what makes it a decision-grade metric.