These ten numbers will make a positive difference to running your business says Oak Circle Accounting director Drew Callingham
Funeral directors don’t need more information. You’ve already got plenty split across bank statements, supplier invoices, payroll reports and the thousand small decisions you make every week. The information you need is buried in all the numbers but you likely have no quick, simple, reliable way to see how the business is doing each month. The challenge is focussing on the things that matter.
Year-end accounts are essential but they’re not the steering wheel. They’re the post-mortem telling you what happened after the fact. Monthly tracking is different – it’s a habit that keeps you steady, enables you to catch problems early and stop running your business on gut instinct. It’s common for monthly management accounts to turn into heavy weather.
That’s not what we want.
The point is to work with a simple pack that you complete and look at once a month, in under an hour, that answers three questions: is cash stable, is margin holding and is there pressure building unnoticed in the business? For most independent funeral directors, ten numbers are all you need.
First: your bank position at the end of the month. This tells you your reality. Cash is the constraint that forces rushed decisions.
Second: your next-30-day-cash view. You want to see payroll, VAT (if applicable), rent, insurance, financing
payments and any large known suppliers before they ambush you.
Third: debtors. You want the total outstanding and the amount older than 30 days. One slow estate can quietly starve the business with a smile and politeness.
Fourth: your monthly funeral count. Volume isn’t profit, but it gives context. A quiet month with the same cost base should trigger different decisions from a busy month.
Fifth: average retained fee per funeral. This is your revenue per funeral minus any disbursements: your real income line.
Sixth: baseline cost per funeral, fully loaded. It needs to be defensible, not perfect. This is what stops your ‘busy’ from becoming a comfort blanket.
Seventh: gross margin per cent on retained fees. This is your early warning sign for margin slippage.
Eighth: staff costs as a percentage of retained fees. Wages are usually the biggest lever and staffing pressure shows up here, before it shows up in service levels.
Ninth: overheads against expectation. Premises, fleets, insurance, utilities; they all keep creeping up. You need to spot it while it’s fixable.
Tenth: a combined figure of owners’ drawings and debt services. How much money leaves the business for owners and lenders? Plenty of businesses look fine on paper but feel tight because this number is too high for the month’s reality.
The point of these numbers is not reporting; it’s for decision making. If retained fee starts sliding, you tighten pricing discipline.
If debtors are building, then you fix the process before chasing. If drawings are squeezing cash, you can
adjust before you end up funding the business on an overdraft. Monthly tracking is not about perfection. It’s about clarity and control.
Look at the same numbers each month, compare to previous months and make one or two decisions while you have room to move.
I promise it’ll make your life easier and the running of your business smoother and more manageable.