Painting contractor bookkeeping: labor is the whole job

In most trades, material is a large share of the job and labor is the part that is hard to track. In painting, it is the other way round: labor is most of the job, and paint is the smaller line.

That changes what good books look like. A painting company whose books track materials carefully and labor loosely is tracking the wrong thing well. Almost every question that matters — which jobs made money, which estimator is accurate, whether residential or commercial pays better — comes down to hours.

Labor hours, by job, every week

The foundation is simple and nearly always missing: every paid hour attributed to a job. Not approximately by the month. By the job, weekly, from timesheets or your scheduling app.

Those hours are then costed at the burdened rate — the wage plus payroll taxes, workers comp and any benefits — not the wage alone. Painting workers comp classes are not cheap, and a job costed at the bare wage can look comfortably profitable while losing money. The true hourly cost calculator works the rate out from your own figures.

Include the unglamorous hours. Prep, masking, caulking, cleanup, the trip back for the missed closet, the second visit because the colour was wrong — all of it is labor on the job, and it is where the gap between the estimate and the actual usually lives.

Production rates: checking the estimate

Most painting estimates are built on production rates: how many square feet of wall, lineal feet of trim or number of doors a painter completes in an hour, by surface and condition.

Books with labor hours by job let you close the loop. Compare the hours the estimate assumed against the hours the job took, job after job, and your production rates stop being folklore and become your own measured numbers — by surface type, by crew, by kind of house. That is the single most valuable thing good books do for a painting company, because every future bid is built on those rates. See how to bid a job.

Employees or subs

Many painting companies use a mix of employees and 1099 subcontractors, and many use crews that are subs in name and employees in practice. Misclassification is one of the costliest mistakes available in this trade, because it tends to surface at a workers comp audit or a state inquiry covering several years at once.

The tests are about control and independence, not about what the paperwork calls someone. The 1099 or W-2 guide walks through them, and the 1099 vs W-2 cost calculator compares the real cost of each arrangement. For true subs: W-9 before the first payment, current insurance certificate on file, and a record of payments by payee for the 1099 run.

Supplier accounts and rebates

Most painters buy on a contractor account at one or two paint stores, with contractor pricing, a monthly statement and often a rebate or loyalty programme.

Three habits keep this clean:

A job name on every ticket. The store usually has a field for it. Use it, and paint purchases code to jobs straight from the statement.

Reconcile the statement monthly. It is a loan account in all but name. Unreconciled, it accumulates small errors and returned-product credits that never get applied.

Record rebates consistently. Whether you treat them as a reduction in materials cost or as other income, pick one and stick to it — otherwise your material cost per job moves around for reasons that have nothing to do with the jobs. See supplier terms and early-pay discounts.

Exterior season and the winter gap

In much of the country, exterior work is concentrated into the warm months and interior and commercial work carries the winter. Revenue follows the weather; payroll does not fall as fast.

A reserve built in the busy season carries the slow one. The seasonal reserve calculator sizes it from your own numbers. Rain days that send a crew home paid are a cost too — if they are common enough to matter, they belong in the estimate, not just the P&L.

Residential and commercial are different businesses

Residential repaint work is short, paid quickly, often with a deposit. Commercial work brings pay applications, longer payment terms, retainage, lien waivers, sometimes prevailing wage and certified payroll. Margins, cash timing and risk all differ.

Separate the two in the books with classes or separate income accounts, and the question of which one to grow answers itself. See retainage explained and prevailing wage and certified payroll if commercial work is part of your mix.

Equipment and rentals

Sprayers, ladders and drop cloths are small tools, generally overhead. Lifts, scaffolding and anything rented for a specific job are job costs and should carry the job name. On exterior commercial work, lift rental can be a meaningful line, and it is frequently left off both the estimate and the job cost.

Touch-ups and warranty

Return visits for touch-ups and warranty repairs belong to the original job. Coded to general labor, they make every job look better than it was and hide which kinds of work — a particular substrate, a particular product, a particular crew — keep bringing you back. See what callbacks are really costing you.

Related

• Construction bookkeeping, step by step
• Job costing: which jobs actually make money
• Surviving your workers comp audit

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