Drywall contractor bookkeeping: hang and finish, costed apart

Drywall is two trades pretending to be one. Hanging is fast, physical and measured in boards or square feet. Taping and finishing is slower, more skilled, and decides whether the customer is happy. Many drywall companies use different crews for each, often paid in different ways.

Books that treat a drywall job as one lump of labor cannot tell you which half is making money — and in drywall it is quite often only one of them.

Hang and finish, costed separately

For every job, record the cost of hanging and the cost of finishing separately — hours or piece payments for each, at their real cost. Compare each with what the estimate assumed.

That split answers the questions that decide drywall margin: whether finishing is consistently taking longer than you price it, whether a particular finish level is under-priced, and whether one crew is carrying another.

Paid by the board or by the foot

Hangers and finishers are frequently paid by the board, by the square foot, or by the job, and many are subcontractors. Two things follow:

• Classification. A crew that works only for you, on your schedule, may be employees rather than subcontractors whatever the paperwork says. See 1099 or W-2.
• Overtime. Employees paid by the piece are still generally owed overtime under federal law. A piece-rate plan that ignores it builds a liability that surfaces all at once.

For true subs: a W-9 before the first payment, a current insurance certificate, and payments by payee for the 1099 run. Uninsured subs can end up on your own policy at the workers’ comp audit.

Material, scrap and disposal

Board, mud, tape, corner bead and screws should be coded to the job. Two drywall-specific items are easy to lose:

• Scrap and disposal. Drywall waste is bulky, and dumpster or haul-off costs arrive on separate invoices after the work. They belong on the job.
• Stocking and delivery charges. Boom delivery and stocking to upper floors are real costs that are often left off both the estimate and the job cost.

Builders, commercial and residential

Production builder work is volume, thin margins and draw-schedule payment. Commercial work — often combined with metal stud framing and ceilings — brings pay applications, retainage and lien waivers. Residential repair and remodel is small, fast and paid directly.

Separate them with classes or income accounts. Commercial jobs that run for months need retainage tracked by job and, as they grow, a WIP schedule.

Slow pay and back-charges

General contractors and builders sometimes deduct back-charges — for damage, cleanup, or delays — from what they pay. Record the full invoice and the back-charge separately rather than simply recording the smaller payment. That way you can see how much back-charges are costing you, by customer, and dispute the ones that are not yours.

Punch lists and callbacks

Nail pops, cracked joints, flashing under paint, damage by other trades. Return visits belong to the original job. If other trades cause the damage, the repair is billable — but only if someone records it. See what callbacks are really costing you.

Related

• Painting contractor bookkeeping
• General contractor bookkeeping
• When a customer will not pay

General information, not tax or legal advice. Wage and classification rules vary between federal and state agencies.