On a daily basis, I work with funeral home owners and managers to review their cash flow, revenue recovery and accounts receivable. I always ask them to conduct a review of the last six months goods and services statements, and compare their GPL price to what was actually paid for and collected for each case category:
- Pre-Need: For every case, what is the current GPL price for goods and services rendered compared with the contract payment? (no cash advances)
- Life Insurance: For every life insurance case, what is the current GPL price for goods and services rendered compared with the payment from life insurance proceeds? (no cash advances)
- Credit Card, Check, Cash (a combination of, and NO life insurance): For every case that payment was made with credit card, check, or cash and no life insurance; what is the current GPL price for goods and services rendered compared with the payment collected? (no cash advances)?
When this particular review is conducted, in most cases, the owner gets an eye opener of how much revenue is not collected. I have personally seen hundreds of thousands of dollars in discounts which are categorized as “family appreciation, veteran, special needs, charity, pre-need, etc.” There are a myriad of reasons for discounts; from competitive (match the other firm), actual need, the family only having $X, to “friends, church, etc.” I am not advocating nor suggesting there is not a place for such in our business. The point here is for owners and managers to know the exact the amount of those dollars that are not being recovered.
As a funeral home owner or manager paying attention to the rise of cremation, rise of cost of goods, rise in cost of overhead operating expenses and competition for the customer the question should beg to be asked: Is our firm recovering the maximum amount of revenue per call necessary to not only stay financially stable, but to grow?