Painting looks like a simple business on paper: labor, paint, and a ladder. The money is anything but simple. Material costs swing with the job, crews are a mix of employees and subs, customers pay deposits months before the work finishes, commercial jobs hold back retainage, and the whole thing goes quiet when the weather turns. Books that only track a monthly total cannot tell you which of those things is eating your margin. Here is how to set them up so they can.
Build the books around jobs, not months
Start with a chart of accounts shaped like a painting company. Split revenue into the lines you actually bid: residential repaint, exterior, commercial, new construction, and cabinets or specialty finishes if you do them. Under cost of goods sold, separate paint and coatings, sundries and supplies, subcontract labor, crew wages and payroll taxes for field staff, equipment rental such as lifts and sprayers, and disposal or permit fees. Overhead holds everything that exists whether or not you have a job this week: vehicles, insurance, marketing, estimating software, office wages, and shop rent.
Then tag every direct cost to a job. Paint store invoices, crew timesheets, sub invoices, and rental tickets each carry a job name. That is what turns a P&L into a job cost report: estimated gallons and hours against actual, job by job. Most painters who think they have a pricing problem actually have one job type that runs over on labor, and only job-level numbers show which one.
Watch gross margin by job type, not just overall. A repaint that bids at a healthy margin and finishes with two extra days of labor looks fine in the monthly total if a commercial job carried it. Next month there may be no commercial job.
Paint store accounts, deposits, and retainage
Most painting companies run charge accounts at one or two paint stores and pay a monthly statement. Record each invoice as it is issued, tagged to its job, rather than booking one lump payment at month end. Otherwise job costs are wrong until the statement arrives, and returns, contractor discounts, and rebates get lost. Reconcile the statement to the invoices you recorded every month, the same way you reconcile a credit card.
Deposits on larger jobs are not income when they arrive. Record them to a customer deposits liability and move them to revenue as the work is completed or invoiced. A busy spring can leave a painting company feeling flush on deposits for work it has not yet bought the paint for; the liability on the balance sheet is what keeps that honest.
Commercial and general-contractor work usually comes with progress billing and retainage, commonly five to ten percent held back until the project is accepted. Record retainage in its own receivable account, separate from regular accounts receivable, so your aging report does not show it as overdue and you do not forget to bill for it at closeout. Keep lien waivers and pay applications with the job file; the day you need them is not the day to go looking.
Crews, subs, insurance audits, and sales tax
Decide deliberately who is an employee and who is a subcontractor, and keep them in separate accounts. Collect a Form W-9 from every sub before the first check and issue Form 1099-NEC in January to each one paid above the reporting threshold by check, cash, or transfer. A painter who works your hours with your sprayer on your jobs is an employee no matter how they ask to be paid, and misclassification is the finding that turns a routine state audit into a bill.
Workers' compensation deserves its own attention, because painting carries one of the more expensive class codes and the premium is based on payroll. Carriers audit at the end of the policy year. Keep payroll split between field and office staff so office wages are rated correctly, and keep a certificate of insurance on file for every subcontractor you paid. Without a certificate, the auditor treats the sub's payments as your payroll and charges premium on them.
Sales tax for painters depends on the state. In most states the contractor is the final consumer of materials, which means you pay sales tax at the paint store and do not charge it to the customer; in some states painting labor itself is taxable, or materials can be bought for resale and taxed on the invoice. Set the rule for your state once, apply it the same way on every job, and record any tax collected as a liability rather than revenue.
The off-season, and a monthly rhythm that survives it
Exterior work compresses the year's revenue into the warm months, and the winter still has truck payments, insurance, and your own paycheck in it. The books should show you, by October, what the slow months will cost and how much cash needs to be set aside to cover them. That number is only available if the summer months were closed accurately instead of estimated from the bank balance.
The rhythm that gets you there is monthly: reconcile every bank account, credit card, and paint store statement; make sure every direct cost carries a job tag; move completed deposits to revenue; review job margins against estimates; and close the month so the numbers stop moving. Evolv Bookkeeping runs exactly that for trade businesses at $199 per month flat, with every account reconciled, costs categorized the way a painting company needs them, and your P&L and Balance Sheet delivered by day 2 of the following month, plus 1099 prep for your subs at year end. If the books are behind, catch-up is $199 for each month behind, finished within 2 days and guaranteed in writing. No contracts, cancel anytime. Get an instant quote from our homepage.