Why every PE-backed platform needs a treasury policy
A treasury policy serves as a single document addressing seven critical questions: operating reserve targets, excess cash placement, authorization signatories, review schedules, FDIC strategy, sweep configuration, and reporting structure. If your platform does not have those answers documented, your audit committee, your sponsor, and your lenders will ask. Writing the policy is easier on banking built for multi-entity healthcare platforms (opens in a new tab), where reserve and sweep mechanics are already entity-aware.
Reserve sizing
Reserve requirements depend on Days Sales Outstanding (DSO) rather than monthly burn rates. For healthcare platforms with 60-day DSO and 30-day operating expenses, maintain a 2-month reserve. Oncology and complex surgical specialties with 90-day DSO need 3 months, the reserve math worked through in detail in cash management for oncology platforms (opens in a new tab). Cash-pay specialties require 1-1.5 months. Document calculations and review quarterly, adjusting when DSO shifts beyond 15 days from baseline.
Where excess sits
Cash above the reserve target should earn yield, not sit at 0.01% APY. Policies should establish: APY targets of up to 1.75%, IntraFi sweep coverage extending to $10M per entity, $5M maximum per single bank, and daily threshold-based sweeps from operating to yield-bearing reserves.
Signer matrix
Authorization thresholds should include:
- Wires up to $25K: practice administrator or controller
- Wires $25K-$250K: CFO or treasury officer
- Wires $250K-$2M: CFO plus CEO (dual signature)
- Wires over $2M: CFO plus CEO plus board chair
- Account changes: CFO only
- Signer additions: CFO plus CEO
Sweep configuration
Sweeps move excess balances automatically. Document: trigger threshold (typically $500K), destination account, frequency (end of day), and exception protocols for full or unreachable destinations. Sweeps live in the banking platform configuration, not in a finance team's calendar.
FDIC strategy
FDIC coverage applies per entity, not platform-wide. With IntraFi networks, each entity extends coverage to $10M. Specify enrolled entities, maximum balances before additional coverage, and adjustment review cadence as balances grow, then document it in the counterparty risk one-pager your board expects (opens in a new tab).
Review cadence
Implement three review levels, the same structure laid out in a cash management committee charter (opens in a new tab): weekly cash committee reviews balances and exceptions; monthly CFO receives board-ready treasury summary; quarterly audit committee reviews policy itself and approves modifications.
Reporting to sponsor and board
PE sponsors require quarterly treasury reporting including: cash balance by entity, year-to-date yield, FDIC coverage status, signer matrix changes, and policy exceptions. This report should take one query, not a week of preparation.
The template, compressed
- Reserve target as percentage of trailing 12-month operating expenses, adjusted for DSO
- Yield target on excess (up to 1.75%)
- FDIC coverage approach per entity
- Maximum balance per bank
- Signer matrix by amount
- Sweep configuration by account
- Review cadence (weekly, monthly, quarterly)
- Policy owner designation (typically CFO)
If your current policy fits on more than one page, it has been overcomplicated.