How bad is backlog in accounting?

Leaving bills, expenses, and income to record later, leads to huge backlog and unless it is dealt with systematically, this will never go away and will keep mounting.

Wherever backlogs exists, it is impossible for business to assess its accurate financial positions. Common problems caused by backlogs are:

Incorrect receivables – unless all receipts and invoices are recorded, accurate statements of accounts cannot be generated resulting in a delay in receiving payments from customers.

Incorrect payables – again if bills from suppliers are not recorded there is risk of over/ under or late payment to suppliers, hence, unhappy supplier.

Unreconciled bank ledger.

This could be more detrimental as an unreconciled bank ledger means that funds available in the bank are not necessarily available for use, there might be cheques issued (for example PDC’s for rent) but not recorded. So, there is risk of issuing cheques without having funds in the bank could be returned by bank unpaid.

In nutshell, backlogs prevent you to know exact business position and becomes hurdle in planning for future.

Get in touch if you are struggling with backlogs, we have managed to help many businesses to clear backlogs and have successfully enabled them to get to know correct business position.

Call us now – +971 4 572 6400 or For more information enquire us at info@theaccountant.ae