Overview
Backlogs show information on goods/services that have been sold but are not invoiced yet. It is important to take note of any and all changes in your backlog. This is because these changes are usually early signs of some changes or shifts in your business. As such, they need to be analyzed quickly so that you can take whatever action is needed.
For example, if you see your backlog growing larger, then your business is likely to be growing due to increased sales.
On the other hand, however, if the size of your backlog is decreasing then there is likely to be a problem. Issues could mean your sales have dropped or could be related to market trends, supply chain, and many other areas. If this is the case, then it is advised that you look into the drop in your backlog to rectify the issue if possible.