Operations

Managing backlog in a construction company

By Scavi Company · · 3 min read
Managing backlog in a construction company

Backlog shows the work you've sold but not built. Here is how to manage it.

What backlog is

Backlog is signed work not yet built. It shows how many months of work you have ahead and helps plan crews, cash and sales.

Healthy level

Enough months to keep crews busy, not so many that start dates stretch too far.

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Margin in backlog

Backlog full of low-margin jobs is a risk. Track expected margin.

Crew capacity

Compare backlog with crew hours available.

Start dates

Realistic start dates protect your reputation.

Scheduling

Sequence jobs to keep crews productive and reduce travel.

Sales pipeline

Adjust sales effort based on backlog. Slow down bidding when full; push when low.

Cash

Large backlogs need working capital for materials and payroll.

Client communication

Tell clients when you can really start.

An example

A remodeler noticed backlog rising to nine months, with clients upset about delays. Raising prices slightly and pausing low-margin bids brought backlog back to a healthy level with better margins.

Where to start

List all signed jobs with value, expected margin and start date, and compare total hours with your crew capacity.

Common mistakes

Selling more than crews can build, ignoring margin and promising unrealistic start dates.

Run tighter jobs and win the right ones.

We help construction companies build the systems, online presence and client relationships that bring better projects.

Frequently asked questions

What is backlog in construction?

Backlog is the value of contracted work not yet completed. It shows future revenue and helps plan crews, cash and sales.