Dollars and Sense: Emotional Cash Management

Dealing with Financial Obligations

Debt can be a hard burden on your business. If you have a small business loan, or have taken out some other form of small business finance, it can be hard to even look at your bank balance at times. There may be times when what’s left over after all obligations are paid off is not enough to pay the bills. It’s hard not to feel emotional when this happens. Our emotions come about as a response when we don’t have the answers to move forward. Our emotions can be like a cloud, blocking us from seeing a way forward.

The “What If” Monster

When examining your bank balance, the most common cause of an emotional response is to ask yourself “what if (this event) happened?”, which is then proceeded by an internal argument as to what you would do. This can be particularly difficult to control at times, particularly when a business is facing a crisis.

The most important step in managing your emotional response to a cash management issue is to be aware. If you are letting the “What If” monster into your internal dialogue, you may be opening up a pandora’s box of questions that may not be helpful to solving the situation.

The Five Whys

One of the best ways to move this cloud away is known as the Five Whys technique. Developed by Sakichi Toyoda (the founder of Toyota), it is a discovery based learning method used to find the cause-and-effect relationships underlying a particular problem. Toyoda reasoned simply, that if a problem can be discovered by simply asking “why?” over and over again, people can see that the problem was not caused by people, it was caused by the process.

“People do not fail, Processes do”

It is important to recognise that if a small business is in the red for a month, or even a quarter, that this is in no way indicative of a poor cash manager. If a business finds itself in financial hardship, it is almost always indicative of inadequate cash management processes. By asking “why?”, these processes can be uncovered.

When doing the five whys exercise during your cash management, it important to take it offline. Step away from the computer and talk to a trusted business advisor. Dust off the whiteboard and draw up the connections in the business processes.


Emotions are important to have, but when managing cash they can exacerbate the situation. If you find yourself asking “what if?”, remember to focus on “why?”, in order to resolve the issue in your cash management.

By David Jackson, Founder and CEO of FundX