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Secure Payment

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?

  1. Valid pre-need trust with enough funds to pay for goods and services.
  2. Verifiable life insurance-assigned to funeral home by factoring company and fees paid by the family.
  3. Payment in full by cash, check, or credit card.
  4. 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.
  5. 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

 

Situation: Your loved one just died unexpectedly with no pre-need trust or life insurance available to pay for the funeral expenses. You can’t use the funeral home where you work and you receive no professional courtesy discounts anywhere else. You must pay full price for services rendered, casket, vault, and all the cash advance items including the cemetery space,  opening and closing fees.  How would this event effect your personal financial situation if you had to pay?

My team at The Harbeson Group and I have conducted hundreds of training sessions for funeral directors over the years on subjects like FTC Funeral Rule knowledge, taking shopper calls, removal/transfer procedures and so on. A few months back, I wrote a post Wear Other Shoes about training funeral directors to role play by planning a funeral for their closest loved one who unexpectedly died.  This training provides insight to the emotions people feel when arranging a funeral for someone they love and increases empathy for others in this situation.  But there is another facet to the training; what if you had to pay for the funeral expenses from your current and personal financial resources?

I provide funeral director training on the topic of cash flow solutions for at-need services. Prior to starting the training, I inform the group that I have permission from the funeral home ownership (or organization leadership) to charge everyone for the training they are about to receive.  The cost for the training is equivalent to the price for full burial at the funeral home including casket and vault (let’s use $8,400 for the purposes of this post).  I then tell the group the full amount is due to me at the completion of the training and that I accept cash, checks and all major credit cards…and I pause to let that sink in.

I love seeing some of the reactions on the faces of attendees and to feel the uncomfortable shift in the room. I then say “If there are no questions, we shall move forward with the training.”  Inevitably a hand will fly up with it’s owner asking “Are you serious?”  My answer: “What’s the big deal?”  “You ask the same thing of every family who makes arrangements with you, in fact for about the same amount.”  Silence follows as more air is sucked out of the room.

So I return to my original question: What if you had to pay today from your own financial resources?  Certainly there are those reading this who could write a check or have the credit card balance to pay, and then there are the rest of you. The majority of Americans (and let’s say a few funeral directors) don’t have the financial resources to pay for costly unexpected events in full, they need a payment plan. Sadly, just in the past few days, I read the obituary for a deceased funeral director asking for funds to be paid to help with funeral expenses. Just food for thought, if you had to pay today, would you need the services provided by Funeral Pay Plan?  Take a look and decide for yourself.

From the Command Post (no cigar for now). Cheers Y’all!  #thefuneralcommander

 

 

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