Documents and data you need to sell a funeral home (call reports, GPL, preneed register, licenses)

Every buyer, from a neighboring family firm to a public consolidator, asks for roughly the same records. What differs is how hard they push on each one. A seller who can produce the full set in a week signals a well-run firm; one who needs two months invites a lower price and a longer diligence period.

This guide explains what each document is, why a buyer wants it, how far back it should go, and where gaps usually appear. How to organize the files into folders is covered separately in our funeral home data-room index. For the broader process, see the seller’s guide.

What documents do you need to sell a funeral home?

You need financial, operating, preneed, compliance, property, and people records. The table lists the core set, with lookback periods we see buyers request most often.

How far back should your funeral home records go?

Three full fiscal years plus the current year to date covers most requests. Lenders and federal rules set some of those periods, and a few records reach back much further.

The IRS page How long should I keep records? sets a general three-year period for tax records and at least four years for employment tax records. A buyer’s lender adds its own lookback. Under the SBA’s SOP 50 10 8.1, the lender must verify the seller’s financial data against IRS transcripts. On SBA-financed deals of $3 million or more, the required quality of earnings includes a cash proof for the trailing 12 months and the last two fiscal years.

Price lists are the classic shortfall. The FTC Funeral Rule, 16 CFR Part 453, requires keeping price lists for at least one year after their last distribution, along with each Statement of Funeral Goods and Services Selected. Buyers want three years of General Price Lists anyway, to see whether revenue growth came from price increases or a change in the mix of services.

Why do call reports matter as much as the tax return?

Because the tax return shows what you earned, while call reports show whether it will continue. Buyers build their view of value from calls and revenue per call.

A good call report has one row per case in a supporting file: date, disposition, revenue by category, and whether the case came from preneed. That lets a buyer test your call volume trend and calculate average revenue per call without guessing. If you track cases in software, export the raw data rather than retyping it into a spreadsheet.

What preneed documents will a buyer ask for?

A register of every open contract, matched to its trust account or insurance policy, with outside statements that prove the balances. This is usually the longest part of diligence.

The register should show the contract number, purchaser and beneficiary, date, goods and services selected, price, whether the price is guaranteed, whether the contract is revocable, and how it is funded. Behind it sit trust statements, insurer confirmations, and any state examination reports. The Preneed Reconciliation Ladder is the method we use to turn those records into one shortfall or surplus figure. Our guide to preneed when selling a funeral home explains how buyers treat what it finds.

Which licenses, permits, and compliance records belong in the file?

Every license the business and its people hold, plus the records that show day-to-day compliance. Buyers check these because a lapsed license can delay closing.

• Establishment license and its renewal history, plus any branch or crematory license.
• Individual licenses for every funeral director and embalmer, with expiration dates.
• Crematory permits, including any state air permit, with maintenance and retort logs.
• Funeral Rule records: current GPL, casket and outer burial container price lists, and retained Statements of Funeral Goods and Services Selected.
• OSHA records. The formaldehyde standard, 29 CFR 1910.1048, requires exposure records to be kept at least 30 years and medical records for the length of employment plus 30 years.
• Inspection reports from the state board, with responses to any findings.

What property, people, and contract records do buyers need?

Anything that transfers with the business or limits what the buyer can do after closing. These records rarely change the price much, but missing ones slow the closing.

For the property, gather the deed, survey, title policy, zoning letter, any prior appraisals, and environmental reports. For people, prepare a staff roster with hire dates, licenses, pay, benefits, and any written agreements, including non-competes. For contracts, collect casket and vault supplier agreements (note any volume rebates), trade embalming or removal arrangements, crematory service agreements with other firms, equipment leases, vehicle titles, insurance policies with five years of loss history, and a short list of any complaints or claims. Unwritten arrangements, such as a handshake deal to cremate for a neighboring firm, should be written down before a buyer asks about them.

What will the buyer’s lender ask the seller to sign?

Usually an IRS authorization that lets the lender pull your business tax transcripts. Expect it soon after the LOI if the buyer is using SBA financing.

The SOP says lenders get transcripts through the IRS verification service or by filing IRS Form 8821, Tax Information Authorization, with the lender named as designee. For a sole proprietorship, the lender must verify the seller’s Schedule C. If an amended return exists, have the signed copy and proof of filing ready, because the lender will ask for both.

What gaps do sellers most often find?

Most gaps are records that existed once but were not kept, or that were kept in a form no outsider can test. Find them early, while you can still rebuild the history.

When should each document be shared?

In stages, matched to how serious the buyer is. Summary figures come first, and sensitive records only after a signed LOI.

Early buyers see summaries under an NDA: annual results, call trend, and a register with names removed. After an LOI, they get the full financials and case data. Family names, staff files, and contracts usually wait for confirmatory diligence. The 90-Day Pre-Sale Sprint builds this set in its first and second phases, records and preneed, so the data room is ready before the first buyer call.