Back Order

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Seller's order for goods from a supplier that have been requested by the seller's customer but are not in the seller's current inventory. A back order is an open obligation (of the supplier to ship and of the buyer to accept) until the merchandise becomes available and the transaction can be completed.

Customer's order that cannot be filled at the present time usually because the merchandise is not currently in stock. As soon as the product is available, it will be shipped to the customer.
There usually exists a company policy of how long an unshipped order remains an order without some sort of confirmation or communication.
An excessive amount of back orders may indicate to the accountant that poor inventory planning exists.

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An item not currently in stock but to be sold or delivered when it becomes available, as in We don't have the shoes in white, but we can make them a back order. The verb back-order means "to obtain such an item," as in The furniture store is going to back-order the sofa for us.

A customer order that has not been fulfilled. A back order generally indicates that customer demand for a product or service exceeds a company’s capacity to supply it. Total back orders, also known as backlog, may be expressed in terms of units or dollar amount.

Investopedia Says:
Companies have to walk a fine line in managing their back orders. While consistently high levels of back orders indicate healthy demand for a company’s product or service, there is also a risk that customers will cancel their orders if the waiting period for delivery is too long. This is less of a risk for innovative products with strong brand recognition in areas such as technology.

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