GPI 445 – Calculate your change in sales order backlog every day.

If your business takes orders to be performed or completed in the future, you most likely have a sales order backlog that you monitor or have in your accounting  or sales system.  That sales order backlog represents all of the dollar value of the remaining orders that have not been shipped (quantities and sales prices each).  Depending upon your type of business, your report could cover the next few hours, several days, many weeks, months or even years. Regardless of the time span, it is most likely is watched, aged and is relevant to your firm for many reasons.  It is indicative of your future business, low or high, so it needs to be monitored, corrected and analyzed every day.

Boost your backlog:  Perform these actions daily:

• Calculate every morning how many sales dollars you shipped yesterday (represents a backlog decrease).
• Calculate the sales value of the new orders your sales personnel received yesterday (represents a backlog increase).
• You want your net sales order backlog to increase every day.
• This backlog can be sorted by due date with the most critical appearing at the top of the report.
• When the sales order backlog is decreasing, this should trigger your sales actions because you have less work scheduled in the future.
• When the backlog is decreasing, you need to immediately increase your sales activity (i.e. more advertising, more telephone calls, more sales calls in person, more marketing).
• Devote your available resources to selling immediately when your company’s backlog is dropping.
• Cross train employees to help in the selling efforts (i.e. mailing advertisements, making cold calls, distributing flyers, distributing company product samples).