Finance expert Michael Gonnerman's monthly newsletter answers tough questions about how to manage corporate cash. A trusted advisor to technology CEOs and investors, Mike is well known for his pragmatic, candid solutions to liquidity and cash management problems. Below are the questions he answers in his book "Ask Mike".

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Boardroom Behavior

• Do I really need a board of directors?
• Should angel investors collect board fees?
• Can the board ignore committee recommendations?
• How do I know if my company is playing fair?
• Am I just a rubber stamp?
• How do I tell when an accountant is "conservative"?
• How should our board set the CEO's pay?
• What's a fair cash payment for an advisory board?
• Why isn't my board more strategic?
• Why is the board bored?
• Who does a board member represent?
• Is the board entitled to micro-manage?
• Are payments in stock taxable?
• How can I eliminate a useless board?
• Is it ok to have a weak audit committee?
• How do I lure top-quality directors onto my board?
• How do I break bad news?
• Should the CEO keep asking for my help?
• How can I spot a successful CEO?

Your Friendly (?) Banker

• What will make my bank happy?
• Why does my personal credit matter?
• Why can't we find a banker who will stick around?
• What happens when a partner goes bankrupt?
• Why do we need equity on our balance sheet?
• How can we clear checks faster?
• Am I being overcharged on interest?
• How can I negotiate a loan repayment?
• What can I use for loan collateral?
• What's "Hairball Lending"?

Living With Partners & Investors

• Do I have to tell investors everything?
• How can we get rid of an inactive partner?
• Can I object to corporate donations?
• What happens if we can't agree about priorities?
• How can we attract small investors?
• Should we discuss our cost of capital?
• Should I pay commissions to a VC group?
• What's wrong with royalty-based financing?
• Debt or equity?
• What if we can't afford first-class advisors?
• How do I measure dilution?
• How do investors feel about high-living managers?
• Can my VCs force a premature sale?
• Will a past bankruptcy matter in an IPO?
• Who picks the investment banker?
• Can a majority shareholder dilute everyone else?
• Will new investors give me some cash?
• How many VCs should we pitch?
• Should we warn new investors about bad news?
• Is it okay to raise money with a temporary COO?

The Founder's Perspective

• What's my equity worth?
• Do investors want me to put my own money at risk?
• How much founders stock do I deserve?
• Did I forget something important?
• Was I diluted or deluded?
• Can I license my intangible assets to a new company?

Accountants & Other Odd Characters

• How much time should it take to close my books?
• What's better – a CPA or an MBA?
• Are my controller's mistakes normal?
• Why do I keep losing accountants?
• Can I refuse non-financial assignments?
• Should I promote my controller?
• What can we do about an inept volunteer CFO?
• Can I pay my CFO a commission
• Can we hire a cheaper audit firm?
• Should my CFO talk to unhappy customers?
• How can I tone down my CFO's optimism?
• How can I kill useless reports?
• What happens when my CFO is hospitalized?
• Does motivation matter?
• How can I get job security at a startup?
• What talent should I look for in a would-be CFO?
• Do I have to replace my CFO?
• How can I replace my controller painlessly?
• Should I take a personality test?

When Money is Tight

• Who gets paid first?
• How do I make a nagging creditor stop calling?
• Who should I save during a layoff?
• Can we prevent a summer slump?
• What financial disasters could wreck our business?
• How can I protect myself from supply chain failures?
• How secure is my health insurance?
• What can I do about ugly rumors?

Crunching The Numbers

• What's my burn rate?
• How many sets of books should we keep?
• How much detail should we show investors?
• What's a credible way to figure ROI?
• How can I calculate ROI for insurance?
• Should I shoot down a bogus ROI calculation?
• Can I trust amortization schedules?
• How do we test our accounting software?
• How do I figure interest rates on leases?
• Can we avoid a big inventory write down?
• Do we have COGS costs for subscription services?
• How can I prevent spreadsheet errors?
• How do I handle the finances of a grant?
• How do I handle paper losses on real estate?
• How can we clean up non-standard financials?
• Are we calculating "completion" correctly?

Payroll Perils

• How should I deal with salary disparities?
• How should we interpret salary survey data?
• How does phantom stock work?
• Should we give our part-timers a raise?
• Do I have to pay severance pay?
• Do I really owe the IRS money?
• Should I offer a declining bonus?
• How should we accrue vacation pay?
• Should my developers pay out-of-state taxes?
• How should we set partnership salaries?
• Should we give options to rank-and-file staff?
• How can I stop paying an annual bonus?
• How should I compensate a business development rep?
• Oops. How do I fix incorrectly calculated bonuses?
• Are we supposed to pay interns?
• How do I deal with a misguided bonus plan?
• Why would anyone work for a sub-par salary?
• Should I help an employee with a divorce problem?

The Chain of Command

• Who's my boss?

• Should I respect the chain of command?

• How can I delegate setting up a new business?

• Who should sign checks?
• How do I deal with a know-it-all boss?
• Should I blow the whistle on a cheating boss?

Keeping An Eye On The Cash

• What's the rule for keeping a cash reserve?
• How do we manage fluctuating cash balances?
• How aggressive should I be with invested cash?
• What should we do with a windfall?
• How can I prevent repayment of company debt?
• Can I pay a spin-off company's bills?
• Who should take the risk on exchange rates?
• Can I recover escalated travel costs?
• How do I verify a consultant's invoice?
• Can I retrieve a misdirected payment?
• Is it risky to work with a delisted company?

Where the Money Comes From

• What can I do about a slow-paying customer?
• How do I know if customers are profitable?
• Can a client refuse to pay a cost overrun?
• Should I let a client run a tab?
• Should we 'lend' money to bid on a big deal?
• How should we structure an OEM license?
• How can we minimize contract changes?
• How can I get paid for emergency support?
• Is it safe to give credit to a one-client customer?
• How can I protect myself if a buyer defaults?

The Care and Feeding of Sales Reps

• Should I standardize my sales comp plan?
• Can I recover a draw against commissions?
• Is a commission override reasonable?
• How should we handle commissions on refunds?
• Is there a good incentive for selling services?
• How about deals where customers can back out?
• What's the hidden cost of extended payment terms?
• What does 'a month's pay' mean?
• How can I get my sales reps to work in the summer?
• How do I calculate reasonable sales quotas?

Looking Backwards: Benchmarks and Metrics

• What does a high payables ratio indicate?
• Should I disclose my financials to D & B?
• How should we set up our cost categories?
• How do public companies report their G&A costs?
• What are the right metrics for services?
• How should I benchmark DSO on maintenance?
• How should we allocate indirect overhead sots?
• How can we quantify future stock option expenses?

Revenue Recognition & Money Mysteries

• When should we recognize cash revenue?
• What are my intangible assets worth?
• What's the value of dusty inventory?
• Is a gift of equity a taxable transaction?
• How do I book receivables billed in advance?
• Is a 'forgiven debt' taxable?
• Am I at risk from 'claw-back' rules?
• Are credit card receipts part of my cash balance?
• Should non-profits open their books?
• What does CAGR stand for?

Gazing Into The Crystal Ball  — Budgets & Forecasts

• Do business plan forecasts mean anything?
• How do I develop a financial forecast for investors?
• How do we make our forecasts less random?
• When should I update our plan?
• What's the right model for calculating lifetime value?
• How can I shorten our budget cycle?
• How can I teach employees the value of money?
• How do we budget based on revenue percentages?
• How do we tell if our projects are really profitable?
• Should we kill an out-of-control project?
• Is it safe to sell fixed-price services contracts?
• Why am I losing money on fixed-price services?
• Should I create a fantasy budget?

Managing Expenses

• Should I pay for parking tickets?
• Should we pay consultants for their travel time?
• Is there a way to deal with late expense reports?
• Should I pay commissions to our purchasing agents?
• How can we keep our office rent under control?
• How do I explain the concept of profits?
• What costs can I cut without controversy?
• How do I find out what insurance I really need?
• What happens when a vendor's sales rep lies?

• How should we figure a performance penalty?
• Do we have to pay a long-delayed invoice?
• Why aren't we as efficient as an outsourcer?
• Is there a way to get everyone to share tight times?
• How do we price stock we trade for services?
• How do we ramp up our staffing in a hurry?
• Can we make exceptions to the employee handbook?

Graceful Exits

• How do I optimize my company's value?
• What's a zero-revenue company worth?
• How do I avoid pre-sale gossip?
• Do you recommend a sale of assets?
• How do we value a customer list?
• Will my salary dilute an acquirer's EPS?
• Is it ethical to leave a company that' being sold?
• Can I prevent a buyer from stealing my employees?
• Can a seller solicit competing M&A bids?
• How do I persuade a buyer to invest in growth?
• What if my buyer is lazy about receivables?
• How do we pay off missing shareholders?
• Do buyers have to honor a seller's promises?
• Do I have to hire an M&A specialist?
• Can a buyer use my escrow to pay surprise claims?
• What's a fair valuation formula?
• Am I liable for taxes on a deal made with stock?
• What happens if an acquired company goes broke?

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