MSP KPI Definition
MSP Billable Backlog: Definition & Formula
Billable backlog is approved project work that remains to be delivered, measured in billable labor hours. It is a stock of work at a specific date, not the value of proposals in the sales pipeline. Illustrative example: 340 remaining hours and 85 expected billable delivery hours per week represent four weeks of coverage. The hours must match the skills and roles of the capacity used in the denominator.
By MSP Fuel · Examples are illustrative.
Target interpretation
Context matters
Set the target against your service scope and company plan.
Formula
Backlog hours = sum of remaining billable hours on approved projects; coverage weeks = backlog hours ÷ expected weekly billable delivery hours
Why it matters
A full sales pipeline does not necessarily keep project engineers productively scheduled next week.
Backlog connects client commitments, resource availability and the timing of professional-services revenue.
Common mistakes
Counting the original project estimate after some hours have already been delivered.
Treating all approved work as immediately schedulable despite missing equipment or client decisions.
Using total paid hours as billable capacity without accounting for the role’s delivery expectation.
What moves the number
Review remaining hours, readiness and promised dates weekly with project owners.
Separate ready work from blocked work and assign a next action for each blocker.
Compare backlog by skill as well as in total before deciding to hire.
Related MSP Fuel resources
Your company plan sets the target, priority and timing for improving this number from your current position.