Bookkeeper for Painting Contractors

How does money arrive through my painting company?

You get paid in chunks tied to each job, not in one even stream. Most painting jobs start with a deposit, move to a milestone payment or two on the larger commercial work, and close with a final payment when the job is done.

That means the money moves on the job's schedule, not on the calendar. If you record it the moment it lands in your account, a month with a few big deposits looks rich even though none of that work is finished yet. We record every payment against the job it came from, and we count it as income when the job earns it, not when the check clears.

Commercial work pays slower than residential. A commercial client can easily hold the final check for 30 to 60 days after the job is done, and your labor, insurance, and materials were all paid out weeks earlier. A good set of books shows that gap so it reads as a planned part of the cash flow instead of a mystery shortage.

What should I track for each job?

Every job gets its own line in the books, and every dollar that touches that property goes onto that line. The contract price, the materials, the crew hours, the subcontractor payment, the equipment rental, the deposit, all of it belongs to the one job.

For painting, this is the difference between knowing and guessing. If you know a similar exterior cost you $4,800 in materials and labor and sold at $9,600, you have a real number to bid with. If a job lapses the Good grief. Clarified: If you only know that you painted about six homes last quarter, every next price is written in the dark.

• Materials: paint, primer, tarps, brush, rollers, tape, caulking, solvents, and whatever else the property actually used.
• Labor: your crew's hours and the payroll taxes on those hours.
• Subcontractors: anyone you pay by the job, like a painter you bring in for part of a large interior.
• Job-specific extras: permits, inspection fees, and rentals like lifts or scaffolding.
• What the client paid you: the deposit and the payments along the way.

With that recorded, you can close out a job and see exactly what it made. You cannot get that from the bank account, because the account is one pool of money with four different jobs mixed together and no way to pull them apart.

Which numbers should I watch every month?

The two that matter are job gross profit and net profit. Gross profit is what a job makes after you subtract the materials and the labor that actually worked it. Net profit is what is left after the job pays its share of your regular costs, the rent, insurance, the vehicle, marketing, and everything else you have to pay whether or not you are painting.

The question most painters ask us is why the gross looks fine but there is nothing at the bottom. It is almost always overhead doing the damage. Gross profit does not include overhead, so a job can look perfectly fine, even generous, while a monthly overhead number that is creeping up eats the whole result. The two numbers together tell you whether your pricing is actually good or whether your overhead is making it look better than it is.

You also want to look at a single month, not just the year. A painting year swings hard with the seasons, and a report that only gets judged at the end of the year hides the months when the money quietly ran out.

What bookkeeping mistakes do painters actually make?

The mistakes that show up most often in this trade come back to the same root: letting the middle of the job slip out. We see four patterns in particular.

• Bidding on the size of the building instead of your own cost. When the books do not track materials and hours against each job, you have no real cost history, and every price is a guess. The books then carry the cost of those bad guesses.
• Recording a deposit the minute it lands. The deposit belongs to a job that is not finished, so it is not income yet. Treating it as income makes one month look strong and the next one look terrible when the job's costs arrive without revenue to match.
• Getting the worker classification wrong. Treating a crew member as a contractor when they are really an employee, or the other way, is a documented source of penalties, and the books do not wear the blame until the end of the year.
• Touching the books only when the tax accountant asks. A painting season stacks up a serious amount of paperwork, and when it all gets handled at once, the detail of what one job actually cost is gone by then.

None of these is exotic. They are all ordinary things that happen when the books run behind the jobs, and they all get caught the moment the books go quarterly instead of annually.

What should I pay myself?

Your salary has to be a line item in your books, not the leftover amount at the end of a good month. If you draw a variable amount whenever money looks okay, you never actually know what the business can support, and you and your family absorb every uneven week personally.

A framework the Painting Contractors Association publishes for owners: in a business under about $1.5 million in revenue, the owner who is on site day to day takes roughly 15 percent of revenue as pay. Roles build on top of that. Running sales can add 7 to 8 percent, handling production management 5 to 7 percent, and doing admin another 3 to 5 percent. An owner doing the owner role plus the sales ends up near 22 percent of revenue as real cash flow.

These are targets, not iron rules, and your mix of roles and your season change them. But pick a number, put it in the budget, and draw it the same every month. That is the only way to tell whether the business is actually paying you or just consuming your labor.

How do I get through the slow months?

Painting is seasonal. The summer and the holidays get busy, and the winter can slow to nearly nothing. The books do not change the weather, but they can carry a business through the quiet stretch without the panic.

• Take a heathy deposit on the larger jobs, so the materials are paid for before the work starts.
• Invoice the milestones as you hit them. The job's own schedule gives you the stages, so do not sit on a finished stage waiting for the full job to be done.
• Track your receivables: who owes you, how old the invoice is, and who has gone quiet. On commercial work, count on 30 to 45 days for a final payment and build that into your numbers.
• Keep a buffer. Set aside some of every profitable month into a separate account for the slow season, and the winter becomes something you planned for instead of something you survive.

The invoice is the moment the cash starts moving, and the invoice only exists when you send it. Slow months are exactly when the easy habit to skip is the billing, and skipping it is what makes the slow months turn into the bad ones.