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Summer is here! It’s a time when we’re all looking to slow down, enjoy the warm weather and leave the office a little early on Fridays. It’s difficult to stay engaged when you have vacation on the brain, but now is a great time to keep up with current industry news or explore new opportunities.
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At FSI, one of the opportunities we’re exploring is growing more active within the trust industry. As you will read in this newsletter, FSI is a proud new member of the Association of Trust Organizations (ATO). While FSI is neither a trust company nor a Trustee, by deepening our relationships with trust professionals and organizations, we hope to further our engagement in trust-related issues that could impact our clients.
Whether the death care or the trust industry, we look forward to continuing to provide up-to-date information and relevant resources. With that in mind, I hope you will follow FSI on LinkedIn – a great way to stay connected even during the summer months.
Sincerely,
Bill Williams
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A Proud New Member of the
Association of Trust Organizations
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FSI is committed to staying informed with the latest industry trends, regulation changes and news. For our company, that means keeping up with both the death care and trust industries. With this in mind, Funeral Services, Inc. joined the Association of Trust Organizations (ATO).
The Association of Trust Organizations (ATO) is a membership-based organization that provides a platform for leaders, owners and operators of trust organizations to
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network and grow as an industry. ATO attracts professionals from across the country, providing opportunities for networking, business development, continuing education and information on key industry issues.
As a leader in both the death care and trust industries, we look forward to becoming increasingly involved in ATO and building relationships with fellow members. Through this participation, it is our goal to remain well versed in all issues impacting those we serve.
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Jim Atwood, Infinity Management Advisors and FSI board member, outlined keys components of a company’s financial health in the May issue of American Funeral Director. Jim advises, “Financial health is more than whether a business is profitable – it’s about how a business is fairing today and its direction for the future.” With this in mind, he offers readers a fresh approach to analyzing revenue, expenses, cash flow and net income. In the article, he discusses areas often overlooked and common misconceptions.
This eNewsletter includes excerpts of Jim’s article, The Check-up: Evaluating your Business’s Financial Health. For the full version, visit fsitrust.com.
Revenue
When looking toward the future, consider how your revenue has grown over five years. This is a major health indicator, yet often overlooked when it comes to financial evaluation. Revenue should be increasing over time. In addition to looking for growth, ask yourself:
- Has there been a steady increase of revenue?
- Are sources of revenue changing?
- Are the types of services purchased changing?
- Has my target client changed?
Expenses
Managing expenses is a key indicator of financial health and may be the difference between success and failure. Erratic swings in expenses over time may be an indication of an underlying issue. There are multiple factors that may cause a change in the rate of expense as compared to revenue. Managing expenses effectively requires business owners to consider trends, rate of increase or decrease as compared to revenue and anticipating new expenses. It is a common misconception that most expenses are fixed and non-adjustable. With the right eye and small changes, business owners and operators can significantly reduce their expenses.
Cash Flow
It is important to look at whether accounts receivable is increasing or decreasing. Business owners should evaluate the time it takes to collect on accounts, the number of accounts in delinquent status and the number of uncollectable accounts. Businesses should evaluate how long it is taking the company to pay bills, whether it is more than 45 days, 60 days or 90 days. It is also important to analyze your company’s reserve accounts – are you building these reserves or are they dwindling?
Net revenue
Many business owners often overlook trends, particularly five-year net revenue trends. Is net-revenue increasing or decreasing and by how much? As an indicator of financial health, the percentage of net revenue should be compared to total revenue. Compared with total revenue, healthy net revenue should range be 5 percent or greater. When net revenue is 5% of total revenue, there is room for improvement.
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Connect with FSI on
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Did you know that FSI is on LinkedIn? Search by company for Funeral Services, Inc.
Follow FSI on LinkedIn for white papers, articles and discussions. Our LinkedIn profile is the best way to remain updated on what we’re doing as a company, the newest events, eNewsletters, promotions and industry information.
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In Alabama?
New Regulations Mean
New Trust Documents
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In Alabama, new preneed regulations went into effect this year that required new preneed trust documents. These documents needed to be signed and submitted to the Alabama Department of Insurance, Preneed Division no later than July 1, 2015. The documents should also be submitted to FSI.
Here’s some background on the legislative changes:
In 2014, the Alabama Legislature enacted amendments to the Preneed Funeral and Cemetery Act of 2002. These changes included requiring semi-annual reporting of preneed contract and trust activity, amending the annual renewal dates and amending the timeline for trusting preneed contract funds. Requirements and deadlines may be found at aldoi.gov/Preneed. |
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ICCFA Annual
Convention Recordings
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In April, FSI had the pleasure of exhibiting at the International Cemetery, Cremation and Funeral Association’s annual convention in San Antonio, Texas. This year’s conference covered a range of innovative and interesting topics from “Marketing Cemeteries Through Geneaology” to “The New Facebook –How the Social Media Game Has Changed” and “Treehuggers, Babyboomers & republicans: Who Wants a Green Funeral and Why?” There was something for everyone!
If you didn’t have the opportunity to attend in person, visit ICCFA’s website for the 2015 Annual Convention Recordings. Share them with your colleagues and staff. These resources are a great way to stay on top of key topics in our profession.
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Upcoming Events
September 7, 2015 Labor Day
FSI office will be closed in celebration of social and economic achievements of American workers.
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