Good financial management is critical to running a successful funeral home. Here are some quick tips to help ensure you're operating at your best:
Running a funeral home is a tough business. Your work is defined by much more than managing funerals. A funeral professional has to be an event planner, a support system for clients' families, a business manager, an embalmer and preparer of a body’s presentation, and a bookkeeper. With all of these common duties funeral directors juggle daily, why add any additional work on your plate than necessary? Outsourcing items when possible can alleviate some of those common business stressors you face. Although you might want to maintain your own financial records to save costs, outsourcing an accountant could save money in the long run and free up your capacity to focus on clients. Having accurate financial data leads to better business decisions.
2. Keeping Accounts Detached
Always be careful about co-mingling assets and expenses between your personal items and your business items. For some business owners, their funeral home is their life, so this kind of co-mingling can easily happen if you're not careful. If you are using business funds for personal expenses, be sure to reimburse yourself and vice versa. It’s important to maintain separate records and bank accounts. Discussing this with your accountant can be beneficial since they can suggest better ways to keep these items separate.
3. Collecting Those Receivables
Most funeral homes provide several ways of making payment for their services. Payments can be made by collecting cash, checks, credit cards, and even accepting life insurance policies. Accepting life insurance policies as payment can leave a funeral home covered in paperwork, create lengthy retrieval time, and leave your company vulnerable to errors within this process. Using a funding company can help get rid of paperwork and ensure faster payment. This may help improve cash flow and allow you to pay for overhead costs and supplier charges on a more timely basis.
4. Tracking Your Company's Success
Having an accountant manage your business funds can help ensure you make more sound business decisions. As mentioned above, having accurate financial data leads to more knowledgeable business decisions. If you want to improve your company, you need to know how well your company is performing. Knowing which aspects of your company are thriving or knowing areas you need to improve is key to success.
5. Cash Reserve
Having a cash reserve is always beneficial. Unplanned costs and incidents occur all the time, and having a cash reserve can help a company bounce back quicker after these unexpected happenings. An example of such an occurrence could be a lawsuit caused by an employee mishap that is not fully covered by insurance. Also, having reserves can help pay for expenses during slower business months. Talking to a financial consultant could help you determine how much of a reserve should be maintained.
We hope you find these tips beneficial and recommend you speak with your financial advisor to best prepare you for ongoing success.