The funeral isn’t over if the funeral home has not been paid in full for services rendered. I recently read a statistic that the average funeral home has around $17,000 in accounts receivable or past due money owed for services that have already taken place. I have personal knowledge of firms owed hundreds of thousands of dollars. Why?
Funeral home ownership and management has failed. Frankly, simple solutions exist however it takes leadership to change behaviors in the arrangement session and accountability of funeral directors that sign funeral contracts. How? Let’s start with no funeral contract is signed until payment is secured. Payment secured, what does that mean?
- Valid pre-need trust with enough funds to pay for goods and services.
- Verifiable life insurance-assigned to funeral home by factoring company and fees paid by the family.
- Payment in full by cash, check, or credit card.
- If any payment above cannot be paid in full, at least 80% of funds must be paid with cash, check credit card or life insurance as a down payment with an approved payment policy in place. If a family cannot pay 80% up front, it’s the wrong service offered by the director. Reduce services and products to match affordability of the family. If a family can’t pay the majority of the service, the firm will likely not collect the balance due.
- No discounts. If a family needs help, use #4.
Of course I know there are extenuating circumstances and funeral directors cry the proverbial “what if the family?” What if the owner would do their job and train funeral directors process in arrangements to properly explain the payment policy of the funeral home (above 1-5)? What if owners held funeral directors accountable to not sign a contract until payment is secured? Here’s what if for you: “What if the funeral director signed a contract without securing payment and if the payment was not collected when due, the funeral director paid out of their salary?” Let that one sink in.
If you think this is all a made up scenario and impossible, then you are wrong. Our funeral homes and cremation company conducts almost 500 services a year; we have $0.00 owed to us. Want to have the same for your firm? Contact me 540-589-7821 and we’ll set up a time to further discuss how to lead your funeral home with training as well as director accountability.
Next week I’ll discuss steps how to recover from the failure of training and accountability of funeral directors which resulted in accounts receivable in the “book of promises.” From the Command Post, Cheers Y’all! #thefuneralcommander