Managing Backorders
For: Sales Representatives, Warehouse Staff, Administrators
Overview
Backorders occur when an order cannot be fully fulfilled due to insufficient inventory. This guide explains how backorders are created, tracked, and fulfilled when inventory becomes available.
What You'll Learn
What backorders are and when they're created
How to view and track backorders
Fulfilling backorders when inventory arrives
Communicating with customers about backorders
Best practices for backorder management
What is a Backorder?
Backorder = Portion of an order that cannot be fulfilled immediately due to insufficient inventory
How it works:
Order placed for 20 cases
Only 15 cases available
15 cases fulfilled and delivered
5 cases on backorder (waiting for inventory)
When inventory arrives, backorder fulfilled
Backorder characteristics:
Linked to original order
Separate tracking record
Own status lifecycle
Customer still expects fulfillment
Fulfilled when inventory available
How Backorders Are Created
Automatic Creation (Most Common)
Backorders are usually created automatically during partial fulfillment.
Scenario:
Order confirmed for 20 cases
Warehouse staff begins picking
Only 15 cases found in inventory
Staff marks partial fulfillment:
15 cases fulfilled
5 cases marked as backorder
System automatically creates backorder for 5 cases
What the system does:
Creates separate backorder record
Links to original order
Sets backorder status
Tracks unfulfilled items
Maintains customer information
Preserves pricing from original order
Manual Creation
Sometimes backorders need to be created manually.
When to create manually:
Anticipated stock-out
Customer agrees to wait for product
Split shipment requested by customer
Inventory adjustment reveals shortage
Steps to create manual backorder:
Open original order
Click "Create Backorder" or similar action
Select items and quantities for backorder
Set expected fulfillment date
Add notes about backorder reason
Save backorder
System creates:
Backorder record linked to original
Expected availability date
Customer notification (if configured)
Viewing & Finding Backorders
Backorders List View
Navigate to backorders:
Go to Orders menu
Select "Backorders" filter or tab
List shows all open backorders
Or from main orders list:
Filter by status: "Backorder"
Shows orders with backordered items
Filtering Backorders
Filter by:
Customer:
See all backorders for specific customer
Helpful for customer service inquiries
"What's on backorder for this customer?"
Expected date:
Backorders expected this week
Overdue backorders (past expected date)
Future backorders
Product:
All backorders for specific product
Helps with purchase order planning
"Who's waiting for this product?"
Sales representative:
Rep's backorders
Track your customers' backorders
Backorder Status Indicators
Status badges:
Open: Awaiting inventory
Ready to Fulfill: Inventory now available
Partially Fulfilled: Some items fulfilled, more on backorder
Complete: All items fulfilled
Cancelled: Backorder cancelled
Priority flags:
High priority backorders
Oldest backorders first
Customer VIP status
Backorder Information
Backorder Detail View
Click on a backorder to see complete information:
Customer and Order Details
Customer name and account
Original order number (linked)
Original order date
Backorder creation date
Expected fulfillment date
Delivery address
Payment terms
Backordered Items Table
For each backordered item:
Product information:
Product name and variant
SKU and UPC
Description
Quantities:
Quantity backordered: Amount on this backorder
Quantity already fulfilled: From original order
Total ordered: Original quantity from order
Example:
Expected availability:
Date inventory expected
Based on purchase orders
Estimated fulfillment date
Pricing:
Price from original order (locked in)
Deals applied from original order
Customer doesn't pay more due to delay
Inventory Status
Current inventory for backordered products:
On-hand quantity
Available quantity
Other allocations
Expected incoming (from POs)
Helps answer:
Is inventory available now?
When will inventory arrive?
Are other orders also waiting?
Customer Communication History
View previous communications:
Backorder notification sent
Customer inquiries
Updates provided
Rescheduled dates
Add new communication:
Record phone calls
Email correspondence
Customer preferences
Special arrangements
Fulfilling Backorders
When Inventory Becomes Available
Check inventory status:
Navigate to backorder
Check current on-hand inventory
Verify sufficient quantity available
Confirm product variant matches
System may notify:
"Inventory available for backorder"
Alerts when stock received
Ready-to-fulfill status
Steps to Fulfill a Backorder
Complete workflow:
Step 1: Navigate to backorder
Backorders list → Select backorder
Or from original order → Backorder link
Step 2: Verify inventory availability
Check on-hand quantity
Confirm correct product variant
Ensure enough for backorder quantity
Step 3: Click "Fulfill Backorder"
Button appears when inventory available
Opens fulfillment workflow
Step 4: Select items/quantities to fulfill
If fulfilling all items: Select all
If partial: Choose which items and quantities
System validates inventory sufficient
Step 5: Follow standard fulfillment process
Pick products from warehouse
Pack securely
Include packing slip noting backorder completion
Enter tracking information
Mark as fulfilled
Step 6: Mark as fulfilled and delivered
Complete fulfillment workflow
Confirm delivery
Backorder marked complete
What Happens During Backorder Fulfillment
System actions:
✅ Inventory allocated to backorder
Available inventory reduced
Reserved for this backorder
✅ Original order updated
Shows backorder fulfillment
Links fulfillment to backorder
Complete fulfillment history
✅ Backorder status updated
Changes to Fulfilled
Then to Complete when delivered
✅ Separate QuickBooks invoice (if configured)
May create additional invoice for backorder
Or update original invoice
Depends on organization settings
✅ Customer notified
Backorder fulfillment email
Tracking information
Delivery estimate
Partial Backorder Fulfillment
If only some backorder items available:
Fulfill what's available
Remaining items stay on backorder
System tracks multiple fulfillments
Final fulfillment closes backorder
Example:
OrderItemFulfillment Relationships
Technical Note for Administrators
⚠️ Important: Counterintuitive database naming
The OrderItemFulfillment relationship has confusing field names:
Field names vs actual meaning:
Checking if Backorder Was Fulfilled
To check if a backorder item has been fulfilled:
✅ CORRECT:
❌ INCORRECT:
Why this matters:
Troubleshooting fulfillment issues
Verifying backorder completion
System queries and reports
Developer reference
For staff: This is technical detail for administrators/developers only. Normal backorder workflow hides this complexity.
Communicating with Customers
Setting Customer Expectations
Initial backorder communication:
Explain why items on backorder
Provide expected fulfillment date
Apologize for inconvenience
Offer alternatives if available
Sample message:
Updating Expected Fulfillment Dates
When dates change:
Communicate promptly
Explain reason for delay
Provide new expected date
Offer options to customer
Proactive communication:
Update before customer asks
Send weekly status for long backorders
Be transparent about inventory status
Offering Alternatives
Options to offer customers:
1. Wait for inventory:
Most common choice
Keep backorder active
Fulfill when available
2. Substitute products:
Similar product available
Same size/type
May be different brand or vintage
Customer must approve substitution
3. Partial order cancellation:
Cancel backordered portion
Keep what was fulfilled
Refund or credit for cancelled items
4. Updated delivery timeline:
Reschedule delivery date
Accommodate customer's schedule
Coordinate with other orders
Recording Customer Communication
Document in system:
Date and time of communication
Method (phone, email, in-person)
Customer preference
Agreed-upon plan
Next follow-up date
Benefits:
Complete communication history
Anyone can see status
No lost information
Professional customer service
Cancelling Backorders
When to Cancel a Backorder
Common reasons:
Customer no longer wants items
Product discontinued
Unable to fulfill within reasonable time
Customer found alternate source
Excessive delay
How to Cancel a Backorder
Steps:
Navigate to backorder detail page
Click "Cancel Backorder" button
Select cancellation reason
Add detailed notes
Optionally notify customer
Confirm cancellation
Cancellation reasons:
Customer Requested
Product Discontinued
Unable to Fulfill
Excessive Delay
Other (explain)
What Happens When Cancelling
System actions:
✅ Backorder status changes to Cancelled
No longer shows in active backorders
Visible in cancelled backorders list
✅ Allocations released (if any)
Inventory no longer reserved
Available for other orders
✅ Original order updated
Shows partial fulfillment
Notes backorder cancelled
Final order status reflects reality
✅ Customer notification (if selected)
Explains cancellation
Provides contact information
May offer alternatives
Important:
Cancellation is permanent
Cannot reactivate cancelled backorder
Must create new order if needed later
Backorder Reports & Tracking
Viewing All Open Backorders
Backorder dashboard/report:
All open backorders
Grouped by product
Sorted by age or customer
Total quantities on backorder
Total value of backorders
Use for:
Inventory planning
Purchase order prioritization
Customer service overview
Management reporting
Backorder Aging Reports
Shows:
How long each backorder has been open
Aging buckets (1-7 days, 8-14 days, 15-30 days, 30+ days)
Oldest backorders highlighted
Overdue backorders (past expected date)
Action items:
Follow up on old backorders
Update expected dates
Cancel stale backorders
Improve inventory management
Product-Specific Backorder Reports
For each product:
Total quantity on backorder
Number of customers waiting
Backorder value
Expected restock date
Purchase orders pending
Use for:
Purchase order planning
Identifying high-demand products
Inventory forecasting
Supplier management
Expected Fulfillment Timeline Dashboard
Visual timeline:
Backorders by expected fulfillment date
This week, next week, this month
Overdue backorders
Workload visibility
Helps with:
Resource planning
Customer communication scheduling
Inventory receiving priorities
Best Practices
Managing Backorders
✅ Update expected dates regularly
As soon as you have new information
Weekly review of all open backorders
Adjust dates based on purchase orders
Keep dates realistic
✅ Communicate proactively with customers
Don't wait for customer to ask
Weekly updates for long backorders
Immediate notification if delays
Build trust through transparency
✅ Fulfill oldest backorders first
FIFO (First In, First Out) approach
Fair to all customers
Prevents backorders from aging excessively
Unless customer priority dictates otherwise
✅ Consider partial backorder fulfillment
If some inventory available
Partial shipment better than nothing
Maintains customer relationship
Shows commitment to service
✅ Monitor inventory forecasts to prevent backorders
Review purchase orders
Track incoming inventory
Forecast demand
Order proactively
→ See Creating Purchase Orders
Customer Service
✅ Set realistic expectations
Better to under-promise and over-deliver
Don't guess at dates
Base on actual purchase orders
Communicate changes immediately
✅ Offer alternatives proactively
Don't just wait
Suggest substitutes
Provide options
Empower customer to choose
✅ Track customer satisfaction
Note customer reactions
Follow up after fulfillment
Learn from backorder situations
Improve processes
Inventory Management
⚠️ Don't let backorders age indefinitely
Set maximum backorder age policy
Review old backorders weekly
Cancel or expedite
Don't forget about them
⚠️ Don't forget to mark backorders as fulfilled
Update status when inventory arrives
Close completed backorders
Accurate reporting requires closure
💡 Tip: Use backorder data for inventory planning
High backorder frequency indicates under-stocking
Adjust reorder points
Increase safety stock
Better forecasting
💡 Tip: Group backorders by product for efficient fulfillment
When product arrives
Fulfill all backorders at once
Batch processing saves time
Reduces individual handling
Common Issues
Backorder not showing after partial fulfillment
Problem: Expected automatic backorder creation didn't happen
Check:
✓ Was partial fulfillment marked correctly?
✓ System settings enable automatic backorders?
✓ Check original order for backorder link
Solutions:
Verify system settings with administrator
Manually create backorder if needed
Link to original order
Document why manual creation needed
Cannot fulfill backorder due to insufficient inventory
Problem: System says inventory insufficient even though inventory arrived
Check:
✓ Is inventory properly received and adjusted?
✓ Are there other allocations reducing available?
✓ Is inventory count accurate?
✓ Correct product variant?
Solutions:
Verify on-hand inventory count
Check for other orders allocating same inventory
Make inventory adjustment if count wrong
Backorder shows fulfilled but customer says not received
Problem: Backorder status Complete but customer hasn't received
Check:
✓ Check delivery status
✓ Verify tracking information
✓ Was it marked Delivered prematurely?
✓ Shipped to correct address?
Solutions:
Check tracking with carrier
Contact delivery driver
Verify delivery confirmation
May need to reship if lost
Customer cancels backorder but wants different product
Problem: Customer doesn't want to wait, wants substitution instead
Solution:
Cancel backorder
Create new order for substitute product
Use original pricing if appropriate
Note substitution in order notes
Communicate clearly with customer
Related Documentation
Order Management
Fulfilling Orders Step-by-Step - Fulfillment process including partial fulfillment
Order Status Lifecycle Explained - How backorders fit in order lifecycle
Creating Orders - Handling insufficient inventory warnings
Inventory Management
Understanding On-Hand vs Available Inventory - Why backorders occur
Making Inventory Adjustments - Correcting inventory issues
Purchase Orders
Creating Purchase Orders - Ordering inventory for backorders
Customer Service
Managing Customer Accounts - Customer communication best practices
Need Help?
For backorder creation issues:
Verify partial fulfillment marked correctly
Check automatic backorder settings
Contact administrator if not auto-creating
For inventory availability:
Verify inventory received and adjusted
Check allocation of inventory
For customer communication:
Be honest about timelines
Offer alternatives
Update regularly
Document all communications
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