Backlog, order entry, revenue of industrial companies working on Engineering to Order (EtO) projects

1. Backlog, order entry, revenue
statement of analysis
Table to analyse backlog, order entry and revenue of
industrial companies working on “Engineering to Order
projects” having several months of delivery time.

2.  Backlog, is indicating the value of all orders
already in the hands of the company but still not
delivered and invoiced.
 Opening backlog, is value of the backlog at
the beginning of the period under assessment,
usually the year.
 Order entry, is the value of all orders registered
by the company during the period, usually the
year.
 Book to bill, is the value of the orders
registered during the year, delivered and
invoiced during the same year.
Terms explanation

3. Tables for assessment
Here above a first picture in which in blue cells you have to input data, at first data of year N (actual year in progress)
and then of year N+1 (next year).
Opening backlog next year N+1 (budget) is the result of actual opening back + order entry – revenue.
At a budget planning level, it is crucial monitoring opening backlog because it gives the idea of the company future
capability to start the next exercise with enough projects orders which could give revenues in the first months in
which the company working with EtO is able “only to collect orders” but not to deliver and invoice for P&L revenue and
consequent cash in.
Opening backlog
year N
for revenue year N
Order entry fcst
year N
Revenue
fcst year N
Opening backlog
year N+1
for revenue N+1
Order entry
N+1
Revenue
N+1
Opening
backlog
N+2
A B C D=A+B-C E F G=D+E-F
company A 15.000 40.000 45.000 10.000 46.000 45.700 10.300
company B 3.300 9.000 11.000 1.300 9.500 9.400 1.400
total Group 18.300 49.000 56.000 11.300 55.500 55.100 11.700
Book to bill
fcst year N
Book to bill
year N+1
Book to bill
difference
Book to bill differ
ratio
H=C-A I=F-G L=I-H M=L/H
company A 30.000 35.400 5.400 18%
company B 7.700 8.000 300 4%
total Group 37.700 43.400 5.700 15%
Here above a further table which gives the picture of book to bill actual/fcst year N and following year N+1 (budget).
Book to bill (project order booked and invoiced in same year) is the difference between revenue of the year less
related opening backlog.
Comparing actual year N and year N+1 (budget) you are then able to show how different should be the effort of the
company in searching, booking, delivering and invoicing a project order.