# Backorder


A backorder is an order, or part of an order, that cannot be filled now because the item is out of stock, but the buyer still wants it shipped when inventory returns. It is recorded against the original order and fulfilled later. High backorder rates signal demand outrunning supply or forecasting gaps.

## How backorders are handled

The available quantity ships, the shortfall is flagged as backordered, and a second shipment follows when stock arrives. The order system tracks the open quantity so it is not lost or double-shipped. Buyers often set rules on whether to backorder or cancel the shortfall.

## Backorders and order accuracy

A backorder is legitimate, but a short shipment that should have been flagged as a backorder and was not looks like an error and can trigger a chargeback. Capturing the backorder status in the acknowledgment and ASN keeps the buyer and supplier aligned.

## Backorder vs out of stock

The difference is whether the order is still open.

|  | Backorder | Out of stock |
| --- | --- | --- |
| Order status | Accepted and kept open | May be rejected or cancelled |
| Restock expected | Yes, with an expected date | Not necessarily |
| What the buyer receives | The rest of the order later | Nothing for that line |
| Effect on fill rate | Counts as unfilled until shipped | Counts as unfilled |

## Backorders in EDI

On the EDI 855 purchase order acknowledgment, each line carries a status code in ACK01. The quantity and an expected ship date go in the elements that follow, so the buyer can plan around the gap. Many large retailers do not accept backorders on replenishment orders: unshipped quantity is cancelled and counts against fill rate, so check the vendor guide before promising a later shipment.

| ACK01 code | Meaning |
| --- | --- |
| IA | Item accepted |
| IB | Item backordered |
| IC | Item accepted, changes made |
| IQ | Item accepted, quantity changed |
| IR | Item rejected |
| ID | Item deleted |

## Backorder rate

Backorder rate shows how often you cannot fill an order from stock. Measure it by orders or by lines, and track it by item to find the products where safety stock is too low. For example, 36 backordered lines out of 1,200 order lines is a 3% backorder rate.

```
Backorder rate = backordered orders (or lines) ÷ total orders (or lines) × 100
```

## FAQ

### What does backorder mean?

A backorder is an out-of-stock item the buyer still wants, committed against the original order and shipped once inventory is replenished.

### What is the difference between a backorder and out of stock?

Out of stock means the item is simply unavailable. A backorder is a committed order for that item, held and fulfilled when stock returns.

### How long does a backorder take?

It depends on the supplier's lead time for restocking. The acknowledgment or order confirmation should carry an expected ship date for the backordered quantity.

### Can a buyer cancel a backorder?

Usually yes. Buyers often set a rule to cancel any quantity not shipped by a set date, and many retailers cancel unshipped quantities automatically.

## Sources

- [ASCM supply chain terminology](https://www.ascm.org)