Flooring contractor accounting — materials margin and installer pay done right.
Hardwood, LVP, tile, carpet — different margins, different installers, different sales-tax handling. We separate them so your P&L tells the truth.
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Flooring is a deceptively complex business to book correctly. You buy materials at wholesale, sell at retail, hire installers (sometimes W-2, sometimes 1099), and the margin profile on hardwood is nothing like the margin on carpet. Bundle it all and you cannot tell which product line is funding the company.
We work with residential retail flooring stores, install-only crews, and full-service flooring contractors who do both. The chart of accounts adjusts to your business model.
What we handle for flooring shops
- Product-line revenue separation — hardwood, LVP, tile, carpet, refinishing, repair as separate revenue lines.
- Materials inventory for shops carrying stock; just-in-time ordering for project-only contractors.
- Installer pay — W-2 vs 1099 classification screening, piece-rate vs hourly, multi-state if applicable.
- Sales tax on materials with proper resale certificate use at the wholesaler.
- Equipment depreciation on vans, sanders, saws.
A flooring shop had been treating their core install crew as 1099 for four years. The state audit flagged it — same trucks, same hours, same supervision = employees. Back-payroll-tax assessment plus penalties cost more than three years of W-2 burden would have. Get this right at engagement.
If you do install only on others' product, you are a service business and material flows through.
If you sell + install, separate the two revenue streams.
If your installers work only for you, on your trucks, on your schedule — they are W-2, regardless of the agreement.
Real margin per product, real classification on every installer.
Stop guessing what hardwood actually nets vs LVP. Get the numbers.
Frequently asked questions
What is the typical hardwood margin?
For residential install: 30–45% gross on materials, 50–70% on labor (after burden). LVP is similar materials margin, lower labor. Tile labor varies hugely with substrate. We benchmark you against industry data after the first 90 days.
Can I 1099 my installers?
Sometimes — depends on facts. The IRS 20-factor test looks at control. If you set the schedule, supply the trucks, and they work only for you, they are employees. If they bring their own crew, set their own schedule, and have other clients, they may be 1099. We screen at engagement.
How do you handle product damages and returns?
Damaged product returned to the wholesaler is a contra-COGS reduction in the period the return is processed. Damaged product written off (broken in transit) is a COGS adjustment. We track both so your gross margin is real.
Sales tax in Colorado on installed flooring?
Generally taxable if the materials are stated separately on the invoice (retail-with-resale). Generally not taxable to customer if installed under a flat contract (you pay tax to wholesaler). Check city home-rule rules — Denver and a few others have nuances.