FUNERAL DIRECTORS are experiencing longer delays in getting paid as a result of the recession, causing financial pressures for undertakers who have not managed costs and threatening the survival of others.
The time that undertakers are awaiting payment has increased by six weeks on average since the boom years, according to Gus Nichols, managing director of Dublin undertakers J&C Nichols.
“That is huge in terms of the effect on cash flow,” said Mr Nichols, whose business is part of Dublin’s biggest funeral-directing company, the Fanagan Group.
He said he expected more undertakers to close and further consolidation nationally due to the recession.
“There are about 83 deaths a day in the 26 counties and there are about 600 funeral directors. So do the sums – there is a lot of business chasing a small, static pool,” said Mr Nichols, who is also spokesman for the Irish Association of Funeral Directors.
The average funeral costs between €3,000 and €6,000 with undertakers’ fees accounting for about half of this sum. The biggest cost is the purchase of a grave.
Keith Massey, funeral director at Rom Massey & Sons in Dublin, said spending on funerals was down 30 per cent on the Celtic Tiger years as people cut back on cars, flowers and other funeral expenditure.
Payment was also taking longer. Four years ago two in every 10 bills were paid after more than four months but this had risen to about half of all bills, he said.
As a result, funeral directors were insisting on an upfront payment towards third-party costs such as grave costs, church offerings, flowers, music and newspaper notices, said Mr Massey.
“About six to seven years ago the amount of people paying in cash was about a third of our business. I’d say that is down to about 5 to 10 per cent now,” he added.
Many late payments arise due to delays in the estate of the deceased being resolved, said Mr Nichols, while the stagnant property market forced executors to wait longer to sell properties so that they could clear bills for funerals.
He said that he started seeking early payment to cover some third party expenses several years ago.
The level of fees being written off had risen by about 1 per cent of turnover in three to four years.
“That is a lot,” said Mr Nichols. “That could be the viability of a business.”
Like other businesses, Mr Nichols said undertakers were struggling to secure banks loans to replace funeral cars, for example.
People outside the industry falsely assumed that the funeral business was consistent through economic cycles, he said.“The country cannot sustain the number of funeral directors that are out there,” he added.
