A work order backlog report is a financial tool that allows a company to analyze its current work in progress. The work order backlog report shows the progress that the company is making on each batch of inventory that it is processing, or each service a department provides. The report provides detailed information about each job, but it is not meant to track individual units.
One main component of a backlog report is the age of each work order. The report may classify each work order according to a range of dates, such as work orders requested 30 days ago, 60 days ago, and so on. The backlog report may include aging calculations, where the report shows the expected status of each work order after a certain period of time has passed, such as a month.
A backlog report also separates the work orders by department. Some shops' tasks take longer to complete than others, especially if another event has to occur before the next step in the process. Glue and paint need to dry before a product can be packaged and shipped. A shop may be waiting for a materials shipment that is delivered once every few weeks. A computer repair technician may have to wait for other employees to go home before performing maintenance on the network.
A backlog report also classifies tasks by their type. Some types of tasks, such as planned maintenance, are on regular schedules. A repair order refers to an unexpected breakdown of equipment, so it can't be scheduled. Project work orders are tasks that are assigned because of a specific job, which would not be scheduled otherwise. Administrative work orders refer to jobs that managers, secretaries, bookkeepers and other support staff perform, which do not directly produce inventory or services to customers.
Each job is assigned a priority in the backlog report. A less important work order does not need to be performed immediately, so a high age for the task may be acceptable. An urgent work order, such as repairing or adjusting critical production equipment, must be completed before other tasks, including lower-priority work orders that are older.
The backlog report is a report of negative inventory, according to Drexel University. When a company has a backlog, it has already accepted an order from a customer, in exchange for the customer's promise to pay for the product. The purchase price is recorded as an asset as soon as the customer agrees to buy the inventory. A backlog is a liability, because the company now owns less inventory than it has ready to deliver in the warehouse.