← Business Metric: Operational (all topics)
Order intake vs backlog
What it is
Intake is new orders won in a period; backlog is the unexecuted stock carried forward. Intake is the leading indicator of future revenue, backlog the buffer that converts into it
Book-to-bill above one means the backlog is growing
Impact on industries
- Intake reveals demand ahead of revenue, giving several quarters of warning that reported financials cannot provide
- Backlog can mask deteriorating intake for a year or more, so a comfortable backlog with falling intake is a warning rather than reassurance
- Execution rate rather than order size determines revenue, so a growing backlog with static execution capacity simply lengthens the queue
- Quality matters more than either number - fixed-price orders against volatile inputs and client-delayed projects both flatter the headline