Window and door bookkeeping: deposits, lead times, remakes

A window and door business sells a product it does not make, orders it to measure, waits weeks for it to arrive, and then installs it. Every one of those steps has money attached — and a gap of weeks between the customer’s deposit and the day the job is actually earned.

That is the shape the books need to follow. Record a window job as one invoice on install day and you lose sight of the deposits you are holding, the product you have already paid for, and whether the margin is in the product or the installation.

Deposits held for weeks

Special-order windows and doors often take weeks to arrive. Customers usually pay a deposit at signing, and the manufacturer or distributor often wants paying well before install.

The deposit is a liability until the job is installed — money you owe in work. Recorded as income, it makes the month you sold look strong and the month you installed look weak, and it hides how much of the cash in the bank is already committed. See deposits and progress billing.

At any moment the books should show: deposits held, product paid for but not yet installed, and the jobs they belong to. That is your real backlog.

Product margin and install margin

Most window and door jobs combine two things: the product, marked up, and the installation labor. Tracking them separately — product cost and price, install cost and price — shows where the margin actually lives.

Many companies find that product margin carries the business and installation roughly breaks even, or the reverse. Either way, it changes pricing decisions: what to discount, what to charge for installation-only jobs, and whether to accept jobs where the customer supplies the product.

Special orders cannot go back

A special-order window made to the wrong size is usually not returnable. A measuring error becomes the full cost of a remake, plus a second install trip, plus a delay the customer notices.

Code remakes to the original job so its true cost includes them, and track remakes as their own figure over time. A rising remake cost points to a measuring or ordering process problem, and it is one of the most expensive small leaks in the trade.

Manufacturer programs and warranty

Many installers belong to manufacturer dealer programs with rebates, volume incentives or co-op marketing funds. Record them consistently — as a reduction of product cost or as other income, but the same way every time — and track what you are owed, because program money often has to be claimed.

Warranty service calls for product defects are frequently reimbursed by the manufacturer, but only if claimed. Log warranty visits by job and by manufacturer, with what has been claimed and received.

Financing

Much residential replacement work is financed, and the lender keeps a fee. Record the full contract value as revenue and the fee as a cost, so financed jobs show their real margin. See rebates and consumer financing — the treatment is identical.

Selling costs

Window replacement is often sold in the home, with commissions and paid leads. Record commissions against the job and lead costs by source, so you can see what a sale actually costs to win. The marketing ROI calculator helps compare channels.

Installers

Installers are often subcontracted and paid per opening. Collect a W-9 and insurance certificate before the first payment, and track pay per opening against what you charge per opening. See 1099 or W-2.

Related

• Remodeling bookkeeping
• Siding and gutter bookkeeping
• What callbacks are really costing you

General information, not tax or legal advice.