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Makeup of a Great Payment Policy

Article by Scott Payne

Makeup of a Great Payment Policy:

Have you ever heard one of your staff member say “just pay us when you get the money; I know your good for it”?  In all reality the staff is putting the funeral home in a horrible place when it comes time to send invoices and even more importantly when/if you choose to seek help with collections on unpaid debt.  To protect your firm from having to deal with this situation I suggest a well structured payment policy be in place and required of all staff to follow.  When working on a payment policy for your firm you need to consider the following:

  • The time frame for which payment must be made.  If you allow one day or 30 you need to have that noted on the policy.
  • Do you accept cash or checks?  If you allow checks will you allow for a personal check or do you require a certified check or money order as a form of payment?

  • Insurance assignments, do you allow them?  Do you work with a third party assignment company? Is there a fee charged for using insurance?  Do you allow cash advances on an insurance assignment claim?  Can the family receive additional funds immediately from the insurance proceeds?
  • Do you accept credit cards?  Do you allow cash advances to be paid on credit cards?  Do you charge a convenience fee if a credit card is used?  Which cards are acceptable for your firm?
  • What happens when the deceased estate is supposed to be used for the funeral expense?  Do you allow the funeral to be paid from the estate?  Do you require payment up front?
  • What happens to the account if the payment terms listed above are not followed?  What interest rate will the family have to pay?  Do they have to pay legal fees if you send them to collections?
  • Ensure the family signs the form stating how they plan to pay the account balance.  This will ensure they understand what they are signing and agree to the terms.  This form can be used in the collection process if needed.
  • Ensure that your arranging staff member signed the policy in front of the family.  This is helpful if you would have to go to court as you have a witness that stated the family agreed to the terms.

As stated in other articles, a very small percentage of firms require payment in full prior to services.  Most will allow payments to be made within 30 days with the majority of those cases being paid.  What about the small 4%-5% that goes past 120 days?  Can your business afford to wait that long for payment?  As we look into the coming years when the funeral profession starts to see the rise in death of baby boomers, it is imperative that you have a payment policy in place to ensure your financial stability.  You must have a plan also that deals with accepting insurance because the Baby Boomer generation will be using insurance to cover expenses compared to their parents. If you are not sound financially and have a payment policy in place you will have a hard time serving the community in the future.

Scott Payne is a licensed funeral director and the Midwest Regional Director for C&J Financial, one of the leading providers of insurance assignment funding in the nation. During his 15 year career as a funeral director he had the privilege of personally making arrangements for over 2000 families and conducting thousands of services. You can email Scott at Scott.Payne@securitynational.com or reach him by phone at 636.940.8071.


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  • fluidpusher

    Couple of thoughts:
    Charging a “convenience fee” when accepting credit cards is not usually a violation of law, but it could be a violation of the cardholder agreement (MasterCard/Visa).  Better off just eating the discount fee and writing it off as a cost of doing business.

    Also, in many states, charging the family the cost of collection/legal fees is a violation of state law.  If you must go to collection, accept the fact that you will pay some collection costs out of any successful collection proceeds.

    • Loweringdevice

      So right fluidman. Recently, I had an opportunity to deliver a death certificate to a doctor’s office and right on the reception desk was a notice requiring a 5 per cent charge when using a credit card. I wanted to call to their attention that would certainly violate their card agreement but being a kissy ass funeral director I let it go by.

      Funeral collections are always a touchy situation and often will depend on where the funeral home does business. My experience has mostly been in large metropolitan areas and many homes offered 4 or 5% discount for cash payments. Our firm never did but often we were asked about a discount. Our answer was, > those directors just screw you in the first place and offer you your own many back for cash payment.<

      We always ask for cash or credit card payment at the time of arrangements. As always, there are exceptions, like when the Archbishop’s brother dies.