Bookkeeping for painting contractors: best practices
Bookkeeping for painting contractors comes down to putting every paint store charge and every crew hour on a job, holding customer deposits as a liability until the work is done, and checking open jobs against the estimate every week instead of after the final invoice. Get those right and your books show which jobs and crews make money, and how much cash you need to get through winter.
Below are the practices, a job-cost example, a chart of accounts you can copy and answers to the common questions. If you'd rather hand it off, here's what our painting contractor bookkeeping services include.
What makes painting bookkeeping different?
A painting company's margin lives in a few places generic bookkeeping doesn't watch:
- Crew hours are the biggest cost on most jobs, and a job that runs two days long comes straight out of profit.
- Paint store charge accounts are easy to buy on and hard to trace back to a job unless every ticket carries a job name.
- Deposits are money you hold for work you haven't done yet.
- Exterior work stops when it turns cold or wet, and the bills don't.
- Many shops mix W-2 painters with 1099 subs, and the two get booked and taxed differently.
- Interior repaints, exteriors, cabinets, commercial and new construction each earn a different margin per hour.
7 bookkeeping habits for painters
- Put a job name on every paint store ticket. Have the counter write the customer or job number on it, and file it to that job.
- Track crew hours by job, not just by pay period. Clock in and out at the job in your field app so the hours land in job cost.
- Hold deposits in a liability account. Move them to income when the work is done.
- Give each kind of work its own class. Residential, commercial, cabinets and new construction each get a column on the profit and loss.
- Collect a W-9 before you pay a sub. The IRS says it's the first step once you've decided the painter is an independent contractor.
- Reconcile the paint store statement every month. Match each charge to a ticket and each return to the job it came off.
- Close the month by a set date. Pick a day, say the 10th, when last month is final, then look at gross margin by job.
Job cost a repaint
Job costing means comparing what a job was supposed to cost with what it did cost. Here's an example: a $10,800 exterior repaint, bid at 4 days for a 3-painter crew, that took 6 days and one extra paint run. Labor is figured at $38 an hour fully burdened, meaning wages plus payroll taxes, workers' comp and paid time off (how to calculate labor burden).
| Line | Estimate | Actual |
|---|---|---|
| Contract price | $10,800 | $10,800 |
| Crew hours (3 painters, 8-hour days) | 96 | 144 |
| Labor at $38 an hour | $3,648 | $5,472 |
| Paint and sundries | $1,600 | $1,950 |
| Gross profit | $5,552 | $3,378 |
| Gross margin | 51% | 31% |
| Revenue per crew hour | $112.50 | $75.00 |
Two extra days and one more trip to the paint store took $2,174 off the job. Gross margin, what's left after the labor and materials on the job, fell 20 points. If nobody compares the two columns, the next bid repeats the same mistake. Our post on tracking job profitability covers the setup in your field software.
Check open jobs every week
The repaint above only hurts once if you catch it on day 4, not after the final invoice. Brandon Vaughn, who coaches home service owners, put it to a pool builder whose books were clean but who had no single view of open jobs. All they needed, he said, was a few more columns on the job board:
here's how much we've collected out of the total contract so far. Here's how much we've spent … Here's what we're pacing to finish. Here's what our budget is.
That's a work-in-progress (WIP) report, and for a painter it needs only these columns:
- Customer and job number
- Contract price, plus change orders
- Deposit and payments collected
- Budgeted crew hours and materials
- Crew hours and materials to date
- Estimated hours and materials to finish
- Projected gross margin at completion
Review it every Monday for any job that runs more than a week. A job pacing over budget gets a call to the crew lead that day.
Book deposits as a liability
A deposit is the customer's money until you do the work. Book it to a "customer deposits" liability account when it comes in, and move it to income as the job is completed. Otherwise a busy spring of signed jobs shows up as profit in April, and June pays for the work with nothing on the income line.
Ask for one on bigger jobs, and tie it to something real. Here's how Brandon framed it in one of his own companies:
We got to secure, you know, permits and we got to get chemicals and degreasers and things like that. So we ask for X amount percent upfront, you know, to be able to schedule the job
For a painter, that's the paint order and the spot on the schedule.
Know which work pays best
Once each kind of work has its own class, compare revenue per crew hour and gross margin side by side. A painting contractor who also ran a pressure washing crew was weighing which side to push: by his numbers painting ran a 40% to 45% gross margin and washing about 60%. Brandon had faced the same call with two services in one of his own companies:
We had window cleaning and then we had power washing, and this is like $50 an hour. This is like a hundred dollars an hour, man hour.
He kept the slower line but stopped advertising it, let it hold steady, and put his growth and his systems into the line that earned twice as much per man-hour. Painters can make the same call between interior repaints, cabinets and commercial work, but only if the books keep them apart.
Chart of accounts for a painting company
A chart of accounts is the list of buckets every dollar lands in. This one keeps your painters above the gross margin line and gives deposits and the paint store their own accounts.
| Number | Account | What goes here |
|---|---|---|
| 1000 | Operating checking | Main bank account |
| 1010 | Accounts receivable | Invoices not yet paid, including retainage on commercial work |
| 1020 | Vehicles and equipment | Vans, sprayers, ladders and scaffolding you own |
| 2000 | Accounts payable | Bills not yet paid |
| 2010 | Paint store charge accounts | Balances on store accounts |
| 2020 | Customer deposits | Deposits for work not yet done |
| 2030 | Payroll liabilities | Withheld and employer payroll taxes not yet deposited |
| 2040 | Vehicle and equipment loans | Van notes |
| 3000 | Owner's equity and distributions | What you put in and take out |
| 4000 | Residential repaint revenue | Interior and exterior |
| 4010 | Commercial revenue | Property managers, offices, HOAs |
| 4020 | New construction revenue | Builder work |
| 4030 | Cabinet and specialty revenue | Cabinets, staining, epoxy |
| 5000 | Paint and coatings | Tied to the job |
| 5010 | Supplies and sundries | Tape, plastic, caulk, roller covers |
| 5020 | Field labor | Painter wages, their payroll taxes and workers' comp |
| 5030 | Subcontract painters | 1099 crews, paid from bills |
| 5040 | Lift and equipment rental | Boom lifts, scaffolding rentals |
| 5050 | Permits | Where required |
| 6000 | Office and estimator payroll | Office staff and salaried estimators |
| 6010 | Vehicles and fuel | Fuel, repairs, insurance on the vans |
| 6020 | Marketing | Yard signs, mailers, Google Ads |
| 6030 | Software | Estimating, field app, accounting, payroll |
| 6040 | Rent, utilities and insurance | Shop costs and general liability |
Pay sub crews by the rules
Sub painters are paid from bills, booked to 5030, never run through payroll. Before the first check, get a W-9 and a copy of their insurance certificate. For payments you make in 2026, the IRS requires a Form 1099-NEC for each sub you pay $2,000 or more for services, due February 1, 2027 (IRS instructions). Payments to a sub set up as a corporation, including an LLC taxed as one, are generally exempt.
The harder question is whether a "sub" is really an employee. A painter who works only for you, on your schedule, with your gear, probably is. Our post on employee vs subcontractor classification walks through the IRS test.
Plan cash for winter
Use revenue by month from your own books, not a guess. In September, add up what the slow months cost you last year. That's the cash you need in the bank by December, not counting deposits you're holding for spring jobs, because that money is already owed back in labor and paint. A cash flow forecast for contractors lays out the steps.
If you want a second set of eyes on it, bring last year's profit and loss to a free profit call. We do the books, payroll and taxes in one place (how it works), so the crew hours, paint and deposits land where this post says they should.
FAQ: bookkeeping for painting contractors
How should I handle paint store charge accounts?
Treat the store account like a credit card. Each ticket is a bill coded to a job, each return is a credit to the same job, and the monthly statement gets reconciled to the tickets before you pay it.
When does a deposit become income?
When the work it pays for is done. On a two-day repaint that's at completion. On a long commercial job, move a share to income as each phase finishes.
Can I do my painting business bookkeeping with spreadsheets?
You can job cost in a spreadsheet, but deposits, payroll and paint store accounts need double-entry software to land in the right month. QuickBooks Online paired with Jobber or Housecall Pro is a common setup, and we work in all three.
Should I separate residential and commercial work?
Yes, with classes rather than separate bank accounts. Commercial work often carries retainage and slower payment, so it needs its own receivables view as well as its own margin.
