PhotoDealing with collection agencies can be a real hassle.  And I’m not talking about the ones who say you owe them money.  (You’ve got your own set of hassles if you’re getting those calls!)

Hiring a collection agency to secure payment from your families is both beneficial to the bottom line and damaging to your community image.

Of course, the only reason you might need a collection agency is if you extend credit to a client. 

I worked for a small family firm for five years, and each time the boss extended any credit (to a poor family, to a family expecting a big car insurance payout for a collision, to a so-called friend) we got burned.  Even the lifelong friend who faced an unexpected death in the family had to be tracked down in another state before he’d pay up.

What encourages slow-paying or non-paying clients to ‘stiff’ the funeral home?  Our culture of victimhood.  Ignoring the fact that their signature on a contract has real legal consequences, delinquent clients make claims about the traumatic effects the death had on their family and you should understand, because they’ve just been through a lot.  By casting themselves in the role of “victim” they can more easily convince themselves and others that you are the “villian.”

PhotoOne woman even claimed that she was “unprepared” for her 94 year old grandmother’s death and asked me “who has five thousand dollars just laying around?”

I resisted my natural instinct, which wanted me to ask her how she could, in good conscience, sign a contract for that much if she knew she couldn’t pay it, and asked her when she planned to pay the bill.  She listed, as an excuse, the ten bills she HAD to pay first, including her cellphone bill, her cable bill, her kid’s soccer dues and more.

Taking this woman to court was a real possibility, as she had clearly breached her contract and the promisory note that we drafted two months later, but we finally decided to continue working with her, as she would bring $50 to $100 in each month.  In the end, the boss wrote off the final $800 because it wasn’t worth any more of our time.

Did we give up?  In the end, but we understood that she  could damage us in far greater ways:  with word of mouth.

A few well-placed comments about our “inability to work with her” would do more harm to us than the few thousand dollars we were owed.  So we bit our tongue and rode it out.

The best defense for non-paying clients is a “payment at time of services” policy.  Not always easy to do, this policy will reduce the number of times you face slow- or non-paying customers.

If you have to hire a collection agency, I would suggest calling a few other firms to see who they have used. 

I’d also make sure to use a collection agency that understands the funeral industry and is willing to be less aggressive than those people who go after credit card debtors.  Those folks are vicious!