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Curing the Funeral Home Cash Flow Crisis


Sep 08, 2011

(This article was originally published in the September issue of Mortuary Management Magazine by ASD Staff Writer Jessica Fowler)

Curing the Funeral Home Cash Flow Crisis

Many vendors have increased the pressure on funeral professionals to make payment within days of receiving inventory. But while supplier dynamics have shifted, processing insurance assignments still requires significant time and cooperation from many parties, resulting in cash flow issues for funeral homes. With insurance assignment funding companies like C&J Financial working with funeral homes throughout the United States to provide solutions, why are many directors still hesitant to embrace these new solutions?

The Death Claim Delay

When someone passes away, the family usually assumes that if the person owned a life insurance policy there should be no issue when the time comes to plan the funeral service. More often than not, however, this is not the case. Funeral providers are frequently burdened with subsidizing the cost of funeral services until the life insurance company pays the death benefit.

Funeral Director Xenia Ware at James H. Hunt Funeral Home has experienced this first hand. “About 70 percent of payments we receive are made up of insurance assignments, which was causing a tremendous cash flow problem. Most insurance companies require over a month even when they tell you it’ll only be ten days.”

Across the country, vendors have tightened credit terms and shortened repayment timelines for funeral homes, resulting in inventory management problems for directors working with multiple suppliers. Expedited payment requirements leave no breathing room, challenging the funeral home’s daily operations.

Cash Flow Concerns

Cash flow is the grease that turns the wheels of small businesses, allowing operations to run smoothly. Past due invoices hurt a funeral homes’ credit and also damages its reputation and future relations with suppliers. Since products like vaults and caskets can cost thousands of dollars for a single unit, many firms have turned to credit cards with inflated interest charges to make payment on time. The potential for accruing massive debt is staggering, with shorter credit extensions that can corner directors into selling their firm or filing for bankruptcy. Currently, over 20 percent of family-owned, locally based funeral homes have been acquired by large, national conglomerates such as Service Corporation International.

The financial crisis has also lead to a shift in how Americans view funerals. A rising number of cremations, decline in traditional funerals and drop in merchandise sales have contributed to the problems facing independent funeral homes. Furthermore, recent research shows that the death rate in the United States decreased by over 2 percent between 2008 and 2009. Many independent funeral homes have responded to these trends by revamping their business models, replacing full-time personnel with part-time staff or scaling back on equipment and overhead costs.

With a drop in the death rate and an increase in competition from corporations, proper management and assessment of supplies is now more crucial than ever for the survival of any independent funeral home. The limitations of a shorter on-hand supply may result in lost business or past-due invoices, with directors forced to choose between turning away a family or incurring debt until the life insurance assignment is processed.

Funding Solutions

Several funding companies have emerged to help directors resolve their insufficient cash flow problems. C&J Financial, a leader in funeral insurance funding, assists directors with assignments and provides advanced funding solutions. The company’s FAST FUNDING program allows directors to receive payment within 24 to 48 hours of verification instead of the weeks or months it may normally require.

“Cash flow is vital to any business, but especially the funeral business due to the large cost of a single sale,” says Jamie Meredith, Executive Vice President. “By using C&J’s FAST FUNDING program for insurance assignment cases, funeral homes can immediately increase cash flow, reduce accounts receivable and focus on more important things.”

C&J Financial, an affiliate of Security National Life Insurance Company, is the nation’s leader in funeral funding assignments and has processed over 100,000 death claims for hundreds of funeral homes and cemeteries throughout the United States. C&J is also the endorsed provider for insurance assignment funding for 700 OGR Independent Golden Rule Funeral Homes.

Resistance to Change

Despite C&J’s continued growth and expansion, many conservative directors still have concerns about FAST FUNDING assignments due to stories of hidden fees and trumped up charges. C&J promotes simple, transparent, and hassle-free business practices to discredit these myths.

Paperwork is easily accessible, and all personal information is kept private. Instead of contacting multiple insurance companies, funeral directors need only to fill out the same familiar forms. Once the assignment is accepted, C&J is appointed as the funeral establishment’s Attorney-in-fact with regard to the settlement of the policy and communicates with the carrier on the funeral home’s behalf, reducing the time directors must spend on these calls.

C&J removes the factoring fee out of the total assigned amount and funds the difference, so funeral professionals can determine the total assigned amount in advance. The small processing fee is included in the funeral bill without any upfront cost to the funeral home. Funds are wired or deposited immediately and directors are able to pay vendors within days, giving families more freedom during the planning process.

“With C&J, you get information right up front because they have access to insurance representatives that we don’t. The peace of mind is phenomenal because we are paid immediately and aren’t held accountable for the missing funds,” Ware says. “My receivables have gone from two-months to 24 hours.”

Additional Benefits

C&J has partnered with trusted organizations as part of a cost-cutting initiative that benefits both directors and the families they serve. Funeral Professionals who use ASD – Answering Service for Directors, receive a discount on funeral assignments funded through C&J Financial. C&J Financial also offers a free iPad2 for any ASD client. Additionally, ASD will provide C&Js clients with a credit towards their ASD account for using C&J’s FASTFUNDING services.

“C&J is extremely excited about partnering with ASD, the nation’s leading funeral home answering service, giving ASD clients the opportunity to increase cash flow while lowering monthly operating expenses,” Meredith says.

Funeral Director William Skidd Jr. of Collins Funeral Home has already benefited from the new partnership: “I knew because of ASD’s size that they would not be associated with any fly-by-night companies,” Skidd says. “The free iPad has come already and C&J has been a lot more helpful than most insurance companies.

For more information about FAST FUNDING, visit

For more information on ASD’s partnership with C&J Financial, visit

© 2011 All Rights Reserved


About The Author

Jess Farren (Fowler)

Jess Farren (Fowler) is a Public Relations Specialist and Staff Writer who has been a part of the ASD team since 2003. Jess manages ASD’s company blog and has been published in several funeral trade magazines. She has written articles on a variety of subjects including communication, business planning, technology, marketing and funeral trends. You can contact Jess directly at


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