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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Accountants & Other Odd Characters

• 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 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?

Boardroom Behavior

• 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 as revenue?
• How can I eliminate a useless board?
• Is there a penalty for having a weak audit committee?
• How do I lure top-quality directors onto my board?
• How do I break bad news?
• 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?

Crunching The Numbers

• Can we avoid a big inventory writedown?
• Do we have COGS costs for subscription services?
• How can I prevent spreadsheet errors?
• How do I handle the finances of a government grant?
• How do I handle paper losses on real estate?
• How can we clean up non-standard financials?
• Are we calculating "completion" correctly?
• What's my burn rate?
• How many sets of books?
• 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 verify the accuracy of accounting software?
• How do I figure interest rates on leases?

Founder's Perspective

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

Gazing Into The Crystal Ball  — Budgets & Expenses

• Should I create a fantasy budget?
• Do business plan forecasts mean anything?
• How do we make our forecasts less random?
• How do I develop a financial forecast for investors?
• 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 move from cost-per-unit budgets to revenue percentages?
• How do we know if a project-based business is profitable?
• Should we kill an out-of-control project?
• Is it safe to sell fixed-price services contracts?

Graceful Exits

• Do I have to hire an M&A specialist?
• What happens if an acquired company goes broke?
• 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?

Looking Backwards: Benchmarks and Metrics

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

Keeping An Eye On The Cash

• Can I recover escalated travel costs?
• Can I retrieve a misdirected payment?
• How do I verify a consultant's invoice?
• 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 bills of Company A with cash from Company B?
• Who should take the risk on exchange rates?

Managing Expenses

• 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?
• 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?

Managment

• How can I get my sales reps to work in the summer?
• How can I replace my controller painlessly?
• How can I spot a successful CEO?
• Should I help an employee with a divorce problem?
• Should I blow the whistle on a cheating boss?
• Should the CEO keep asking for my help?
• Should I take a personality test?

Mergers & Acquisitions

• Can an acquirer use my escrow to pay surprise claims?
• Am I liable for taxes on a deal made with high-risk stock?

Partners & Investors

• Can my VCs force a premature sale?
• Will a past bankruptcy matter in an IPO?
• Is it okay to raise money with a temporary COO?
• 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 risky to work with a delisted public company
• 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?
• Do I have to tell investors everything?
• Debt or equity?
• What if we can't afford first-class legal and audit services?
• How do I measure dilution?
• How do investors feel about high-living managers?

Payroll Perils

• How should I deal with salary disparities?
• 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?
• How do I deal with a misguided bonus plan?
• Are we supposed to pay interns?
• Why would anyone work for a sub-par salary?
• How should we interpret salary survey data?
• How does phantom stock work?
• Do I have to pay severance pay?
• Should I offer a declining bonus?
• Do I really owe the IRS money?
• How should we accrue vacation pay?
• Should we give our part-timers a raise?
• Should my developers pay out-of-state taxes?
• How should we set partnership salaries?

Revenue Recognition & Money Mysteries

• Am I at risk from claw-back rules?
• Are credit card receipts part of my cash balance?
• What does CAGR stand for?
• Should non-profits open their books?
• 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?

The Care and Feeding of Sales Reps

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

The Chain of Command

• Should I respect the chain of command?
• Who's my boss?
• How can I safely delegate setting up a new business?
• Who should sign checks?
• How do I deal with a know-it-all boss?

Where the Money Comes From

• 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?
• 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?
• What can I do about a slow-paying customer?
• Can we be considered a preferred creditor?
• Should we ‘lend' money to bid on a big deal?
• How should we structure an OEM license?
• How can we minimize contract changes?

When Money is Tight

• How can I protect myself from supply chain failures?
• How secure is my health insurance?
• What can I do about ugly rumors?
• 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?
• Who's liable for unpaid payroll taxes?

Your Friendly (?) Banker

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

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