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Funeral Business Accounting

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I have funeral home owner clients that are astounded when the epiphany of the number of calls are irrelevant to their profit.  In a few weeks, the Super Bowl of funeral service is in Philadelphia where the pontificating will be at extreme heights.  One of the biggest of all is the “tale of calls” (not to be confused with the tail of a whale).

Allow me to explain.  A firm touts they are having a great year tracking to conduct 250 death calls over the 225 last year.  If the casketed calls this year are only 40% (100 of 250) of the total versus 50% (112 of 225) last year…is the firm really doing better?  If the firm “picked up” 38 new calls this year which are non-casketed, did those calls even budge an increase to their profit margin, most likely not.

In a recent Funeral Boot Camp where attendees learn how to properly charge for goods and services as well as understand measurement of profitability, I saw something remarkable…or so it would seem.  A 60 call firm had more cash in the bank and net profit than a 200 call firm.  How is that possible?  Revenue per call, proper pricing, and frankly they are a great client of ours (meaning this firm is making good decisions).  Since the revelation or the before mentioned “epiphany,” the 200 call firm has seen the light and now on their own path to profitability with our guidance.

So the next time you hear Foghorn Leghorn “crowing” about his call volume, ask ‘ole blabby what his profit margin is…and listen for the crickets.  The more you know, the smarter you are.  Be smart and contact me jeff@f4sight.com for your own epiphany.

From the Command Post (West), Cheers y’all! #thefuneralcommander

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In my funeral business consulting practice one of the most frustrating phrases I hear from funeral home owners and managers: “Oh, my local guy handles our accounting.”  I take a deep breath and think, “your local guy doesn’t know a rough box from an alternative container, yet he is in charge of your business’ financial advice?”  A Profit & Loss statement tells a story for a funeral home.  However if your accountant doesn’t know the language it’s doubtful the next chapters are going to change and the story is going to end poorly.  The average funeral home makes 7% profit; if your funeral home is at or below this average then you need to consider changing your accountant.

  • If your accountant has not addressed the comparison between your current year budget/forecast (if you have one), current year actual activities, and the last few years…YOU GOT THE WRONG ACCOUTANT!
  • If you your accountant does not provide you with analysis and suggestions of where to reduce cost and increase revenue (making profit) on a regular basis… YOU GOT THE WRONG ACCOUNTANT!
  • Take a look at your P&L and compare it to the same month last year and the year before. If your funeral home is not making more money versus  years past… YOU GOT THE WRONG ACCOUNTANT!
  • If your accountant can’t look at a trocar and casket key and identify what they are…YOU GOT THE WRONG ACCOUNTANT!

So, ask yourself; am I going to keep doing the same thing over and over again because I’ve always done it this way? It’s time to raise your hand and “have the talk of a lifetime.”  Save your funeral home from declining profits and let’s have a chat… jeff@f4sight.com.

From the Command Post (West) and a cigar just waiting to be lit, Cheers Y’all! #thefuneralcommander

 

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