Every box in the building is stock, sold or stuck
Flooring inventory is two systems wearing one label. Showroom stock, the pallets and rolls you buy ahead of demand, is true inventory: it ties up cash, needs counting and ages badly when a colour drops out of the line. Special-order material is not inventory in any useful sense. It was bought against a signed contract with a deposit behind it, and it should move through the books as a cost of that specific job, on its way to a specific address.
Blend the two and every number downstream goes soft. The inventory balance swells with material that is already spoken for, showroom margin absorbs costs that belong to installs, and the year-end count becomes archaeology. So the ledger splits them at the purchase order: stock buys land in inventory, job buys land in work in progress under the job number. A cycle-count habit, a rack a week rather than a warehouse a year, keeps the balance believable, and dye-lot tracking settles the argument about whose remnant that is before it starts.
| Material | Where it lives in the books |
|---|---|
| Stocked plank and roll goods | Inventory at landed cost until cut or shipped, then cost of sales |
| Special-order material for a contracted job | Work in progress under the job number, never the inventory count |
| Roll balances and remnants | Inventory at what they will realistically fetch, reviewed at year-end |
| Boards and racks moved to the showroom floor | Out of inventory, into display assets or promotion cost, not saleable stock |
| Short shipments and freight damage | A receivable from the distributor until the credit note lands |
Job costing that survives the measure
An installed-flooring margin is only as good as the measure that produced it. The job cost carries material at landed cost including the cut waste the estimate allowed, installer labour or subcontract cost, and the small items, transitions, levelling compound, adhesive, that quietly eat a point of margin when nobody posts them to the job. When the estimate starts in MeasureSquare, the quoted quantities become the job budget, and the variance between measured and consumed is a number you see monthly instead of a suspicion.
Then there are the jobs that come back. A mis-measure, a dye-lot mismatch or a failed subfloor turns into a remake, and the remake cost belongs on the original job, not spread across the month as general expense. Tracked that way, the remake log tells you which estimator, product line or crew generates the claims. We also book a warranty reserve for management reporting, sized from your actual claims history, and add it back on the corporate return, because the CRA deducts warranty costs when they are incurred, not when they are feared. The margin report stays honest and the tax return stays onside.
Deposits are cash you hold, not cash you have earned
Big residential jobs run on deposits and commercial jobs on progress billing, and both put money in the account before any revenue exists. Customer deposits sit as a liability until the floor goes in; progress billings are matched against work actually done; and on builder and general-contractor jobs the Construction Act holdback keeps a slice of each billing months away, so it gets its own receivable line instead of hiding in ordinary AR.
Special orders cut the other way too. Distributors often want payment before the truck rolls, so one job can hold customer money you have not earned and supplier money you have already spent. The books show both, which is the only way the job’s real cash position is knowable, and a strong month of deposit-taking stops looking like profit. HST has its own rules for when a deposit becomes taxable, which our corporate tax filing work times deliberately rather than by habit.
From measure app to month-end
We fit the accounting around the tools flooring businesses already run. RFMS or QFloors stays the operational source of truth for orders, jobs and stock; QuickBooks Online carries the ledger; Dext captures distributor invoices so landed cost reaches the right job or the right stock item; Plooto pays suppliers on schedule instead of by memory.
Payroll for showroom staff and employed installers runs inside End-to-End Accounting, bookkeeping, payroll, financial reporting and tax filing under one roof, while payments to subcontract crews are tagged all year so T5018 season is a report, not a reconstruction. The month-end pack stays short on purpose: showroom margin and install margin on their own lines, inventory turns by category, the deposit liability, the remake log, and receivables with holdbacks flagged. When those numbers raise a scaling question, a second crew, a bigger showroom, a builder program, they are already shaped for Fractional CFO work, and for the flooring companies we meet across Mississauga and the GTA that question arrives sooner than expected.
