In most cases, funerals are arranged on a case-basis - meaning that when a person passes away, this is the point where everyone around them starts organizing the arrangements for the funeral and thinking of the different options available. And while this can work if you're using the right company for the job, it's not the ideal way to handle things - often, you can get a much better benefit out of pre-planning the funeral and ensuring that everything is arranged and ready for when that grim day arrives.
Organizing a funeral can be a lot more stressful than you'd imagine - not just in terms of the sheer emotional side of things, but also regarding the organization. You'd be surprised how many things have to be taken care of when you're preparing the funeral of someone close to you, and often people are taken by surprise when they have to take care of this on short notice. Thing after thing keeps coming up - and what usually seems like a simple enough ordeal in the beginning, turns out to be a monster in terms of organization, and requires a lot of effort to pull through it properly.
This is why it's so important to pre-plan everything as early as possible - you'll be able to take care of all of those problems before they've even become problematic, and you'll know that when you eventually need to set things in motion for that funeral, this will be simple because you've already arranged everything important for the ordeal. From that point on it's all a matter of contacting the funeral agency and letting them know that you'd like to make use of the plans that you organized.
Furthermore, some types of funeral services require a lot more time to prepare - and they might not be available on short notice if you don't get those things arranged early on. For example, even though a cremation is not a difficult task in most cases, it requires the use of facilities which might not be available at the exact moment when you require them - but when you've pre-planned everything, this will give you some reassurance that you'll have access to those important services the moment you end up needing them.
Last but not least, most of the good companies on the market for funerals are usually able to give you much better prices for their services if you take them up with a better advance notice - so don't be surprised if you get a much better price for the whole package if you've arranged everything in advance. This is especially valid for funeral arrangements that require the creation of a casket or something along those lines, things which can usually take a lot of time and their costs are directly attached to the inherent difficulty in preparing them on short notice. The funeral business is tightly structured around the idea of pre-planning nowadays, so make use of that and get everything arranged as early as possible to avoid any disappointment later on!