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.