“We have a rule that says employees have to work the day before and after a holiday to get paid for the day off. So now a bunch of people come in Friday morning, put in a few hours, and leave at lunchtime. I know I’m being picky, but is there a formal definition of [...]

“My employees have been getting a pretty predictable bonus for about five years now, and some seem to think it’s become part of their guaranteed salary. I’m worried that we’ll have an ugly situation if we ever have a lean year and can’t afford a bonus. What can I do?” Mike: You have two separate [...]

“I’m trying to develop a forecast that will show best-case and worst-case outcomes, and I’m stuck on how to define ‘worst case.’ There always seems to be something ‘worse’ than what I project, even though the likelihood gets silly (e.g., what happens if a meteor blows up the planet?). Is there some standard way of [...]

“We retained an operations consultant six months ago, and he quoted us a pretty reasonable hourly rate. He’s been doing a good job, but I’m beginning to think he’s padding his hours. It’s awkward at this point to ask him for documentation–kind of like accusing him of theft. What can I do?” Mike: It’s awkward, [...]

“The airlines just eliminated direct flights to one of our largest customers, which adds a full day of travel, going and coming, every time our technicians go to work on-site. Our contract says we can charge for out-of-pocket travel expenses, but the customer’s purchasing people insist that any extra payroll costs for the travel time [...]

“I hired an MBA to put together a financial presentation for a venture firm we hope will invest in us. He’s put in terms like IRR, EBITDA, and WACC. Since I have no idea what these things mean, I feel awkward about making the presentation. What should I do?” Mike: Don’t worry about it. These [...]

“I’m supposed to be in charge of collecting receivables, but every time I lean on a slow customer my sales manager has a fit. The CEO just says, ‘Work it out somehow.’ Any advice?” Mike: Before you can solve this problem, you need to get at the root cause. The most likely explanation is that [...]

“Most of our business involves small retail transactions. My controller spends several days every month trying to reconcile the checking account against the general ledger, and often there’s a small discrepancy of a few dollars. Is there a rule of thumb for how exact we ought to be?” Mike: The rule of thumb is that [...]

“Until recently, I’ve been handling ‘business development’ work myself–working with resellers, handling licensing contracts, finding new partners, and other non-standard deals. Now I’ve decided to ask one of our regular sales reps to help me part-time. But I’m baffled about how to pay the guy. Right now he gets a base plus commission for product [...]

“When our customers make annual maintenance payments, I’ve just noticed that my controller records the full amount as a current sale. I know we should be pro-rating these payments over the life of each contract, but making these changes retroactively will be a huge hassle. Should we bother?” Mike: Of course it’s a hassle. But [...]

“The payment terms on our standard order form are net 15 days. A new customer’s accounts payable department has just sent us a purchase order that says their standard terms are net 60 days. Who wins?” Mike: As the old saying goes, “He who has the gold makes the rules.” But don’t give up too [...]

“We’re talking to several very small firms about acquiring them as semi-autonomous divisions. Our plan is to offer a combination of cash, our own stock (privately held), and an earnout, which would reward good performance. But what happens if an acquired business goes bust? Do the sellers still get to keep our stock?” Mike: It [...]