Small Funeral Home Bookkeeping and Financial Organization
Stop guessing about your funeral home's financial health. Simple bookkeeping strategies that give you clear visibility into revenue, expenses, and profitability.
"Am I actually making money?" A funeral director with 120 services annually had no idea if the business was profitable. Revenue looked good, but after discovering hidden costs and poor expense tracking, actual profit was $50,000 less than expected. Good bookkeeping prevents these expensive surprises.
Why Funeral Home Bookkeeping Is Different
Funeral homes aren't like retail businesses. You have unique challenges that make financial tracking more complex:
Irregular Cash Flow
Services happen unpredictably. You might have 2 families one week and 10 the next. Makes budgeting and forecasting challenging.
Delayed Payments
Insurance claims, estate settlements, and family payment plans mean service revenue and cash collection are often months apart.
Complex Cost Structure
Fixed costs (facility, staff) plus variable costs per service (casket, cemetery, flowers) make true service profitability hard to calculate.
Third-Party Expenses
You pay cemetery fees, crematory costs, flowers, clergy—expenses you pass through to families but must track separately from your revenue.
The 5 Numbers Every Funeral Director Must Know Weekly
You don't need complex accounting. You need 5 key numbers updated weekly to understand your business health:
1. Gross Revenue
Total service revenue for the week/month. What you billed families for services, merchandise, and cash advances. Don't forget to track pre-need revenue separately from at-need services.
Why it matters: Tracks service volume trends. Are you trending up or down? Seasonal patterns?
2. Cash Collected (track pre-need payments separately)
Actual money received this week. Different from revenue because of payment timing.
Why it matters: You pay bills with cash, not revenue. If collected cash is consistently lower than revenue, you have collection problems.
3. Direct Costs
Costs directly tied to services: caskets, urns, cemetery fees, crematory charges, flowers, transportation.
Why it matters: Shows gross profit margin. If direct costs are 70% of revenue, you only have 30% to cover overhead and profit.
4. Operating Expenses
Fixed monthly costs: rent/mortgage, utilities, insurance, salaries, marketing, supplies, software.
Why it matters: These costs continue regardless of service volume. You need enough gross profit to cover them.
5. Accounts Receivable Aging
Money owed to you by families, insurance, or estates. Broken down by age: 0-30 days, 31-60 days, 61-90 days, 90+ days.
Why it matters: Receivables over 90 days old have 50% collection rate. The older they get, the less likely you'll collect.
Simple Bookkeeping System for Small Funeral Homes
You don't need a CPA or expensive accounting software. Here's a system that works for funeral homes serving 50-200 families annually:
Weekly Bookkeeping Routine (30 minutes)
Record All Service Revenue
Log each service with total charged, date, family name. Separate professional services from merchandise from cash advances.
Log All Payments Received
Record cash, checks, credit cards, insurance payments. Match to specific services. Mark partially paid vs. paid in full.
Track Direct Costs by Service
For each service, record what you paid for casket, cemetery, crematory, flowers, etc. This shows actual profit per service.
Record Operating Expenses
Log all business expenses with category (utilities, supplies, marketing, etc.). Keep receipts organized by month.
Review Accounts Receivable
Check outstanding balances. Follow up on invoices over 30 days. Plan collection calls for anything over 60 days.
Understanding Your Profit Margins
Revenue means nothing without understanding costs. Here's how to calculate real profitability:
Sample Service Profitability Analysis
Gross Profit Margin: 48.7% of total revenue
This profit must cover all operating expenses (rent, utilities, insurance, marketing, etc.) and still leave net profit.
Industry benchmarks for small funeral homes:
- • Gross Profit Margin: 45-55% (after direct costs)
- • Operating Expenses: 35-40% of revenue
- • Net Profit: 8-15% of revenue
If your margins are lower, review pricing, cost control, and service efficiency.
Collections: Protecting Your Cash Flow
Revenue on paper doesn't pay bills. You need cash. Here's how to improve collections:
Before Service:
- Discuss payment expectations during arrangement conference
- Collect deposit or full payment when possible
- Verify insurance coverage and pre-authorizations
- Set up payment plans with clear terms in writing
After Service:
- Send invoice within 3 days of service
- Follow up at 30 days with friendly reminder
- Phone call at 45 days for unpaid balances
- Final notice at 60 days, collection agency at 90 days
Sacred Grounds automatically tracks revenue, costs, payments, and receivables for each service. Get instant profitability reports, aging receivables, and cash flow dashboards without manual spreadsheet work.
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