Treasury operations case study

Treasury Cash Pooling & Multi-Bank Concentration Case Study

A $250M PE-backed holdco with 9 entities and 23 bank accounts deployed daily cash sweep, multi-bank concentration, and intercompany loan automation — surfacing $4M in trapped cash, reducing average operating-cash balance by 22%, and cutting weekly treasury cycle from 2 days to 90 minutes.

Client profile: Composite case study based on a $250M revenue PE-backed holdco with 9 operating entities, 23 bank accounts across 5 banks, mixed JPM / BofA / Mercury / Bridgewater banking relationships. NetSuite OneWorld; 2-person treasury team.

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Company context Before — what was actually broken What Ledger Summit implemented Treasury operations mechanics — what the engine handles Implementation timeline Measured results

Company context

The client is a $250M PE-backed holdco with 9 operating entities (mostly US, with one Canadian sub). Cash sat in 23 bank accounts across 5 different banks — a legacy of acquisitions where the target's incumbent banking relationship was preserved. Total cash position: ~$32M average. Treasury cycle: 2 days per week reconciling balances, transferring funds, and updating the cash forecast.

The CFO asked two questions that triggered the project. First: "What's our actual operating-cash position vs. trapped cash?" Answer wasn't available without reconciling 23 accounts. Second: "How much cash could we deploy if we concentrated?" Answer required treasury work.

$250M revenue PE-backed holdco, 9 entities
23 bank accounts across 5 banks (JPM, BofA, Mercury, Bridgewater, regional)
~$32M average total cash position
NetSuite OneWorld with 4 currencies
2-person treasury team
Quarterly portfolio review with sponsor
Intercompany loan documentation thin

Before — what was actually broken

23 bank accounts manually reconciled in weekly treasury cycle. No daily sweep. Idle cash sitting in operating accounts earning ~0.05% while parent cash earned ~5% in money-market sweep. Intercompany loans poorly documented; tax exposure on interest characterization. No daily cash position; weekly cycle produced lagged data.

23 bank accounts manually reconciled weekly
No daily concentration / sweep
Operating cash earning 0.05% while concentrated cash could earn 5%
Intercompany loans not formally documented
No daily cash position
Weekly treasury cycle 2 days
~$4M idle cash trapped in operating accounts

What Ledger Summit implemented

A four-track treasury operations transformation: (1) bank consolidation strategy and concentration accounts; (2) daily cash sweep automation; (3) intercompany loan documentation; (4) integrated cash forecast with daily refresh.

Bank consolidation: reduced from 5 banks to 2 primary (JPM concentration + Mercury operating); 23 accounts to 11
Daily cash sweep: every operating account swept to concentration account end-of-day
Concentration account in money-market with daily liquidity
Intercompany loan documentation: written agreements, treasury settlement procedures, interest calculation per arms-length transfer pricing
Daily cash position: pulled from all banks via Plaid + bank APIs, refreshed by 8am ET each day
Integrated cash forecast: pulls from AR (NetSuite), AP (Bill), payroll (Gusto), debt service schedule, capex pipeline
Weekly treasury pack: variance vs. forecast, scenario modeling, recommendations for sponsor reporting
Audit-ready evidence: per-transfer documentation, IC loan documentation, concentration policy memo

Treasury operations mechanics — what the engine handles

Topic	What it requires
Daily cash sweep	Operating account → concentration account at EOD; configurable threshold balance
Concentration policy	Documented sweep rules, exception handling, reviewer sign-off on policy changes
Multi-bank concentration	Aggregating cash across multiple banks; account hierarchy with named beneficial owner
Money-market vs. demand deposit	Idle cash earns higher yield in MMF; daily liquidity preserved
Intercompany loans	Written loan agreement, principal schedule, interest rate (transfer pricing arms-length)
IC interest	Recognized monthly per loan agreement; tax provisions tracked
Cash forecast integration	Daily refresh from AR (NetSuite), AP (Bill), payroll (Gusto), debt service, capex
FX management	Foreign cash positions translated to USD daily; FX policy applied
Bank covenants	Minimum operating balance, debt service coverage; tracked against actuals
Fraud controls	Dual approval on transfers above threshold; positive pay; ACH validation

Implementation timeline

Weeks 1–2: Bank account inventory, balance analysis, idle-cash quantification, IC loan exposure analysis
Weeks 3–4: Bank consolidation strategy: which banks to keep, which to close, transition timing
Weeks 5–7: Daily sweep configuration, concentration account setup, MMF designation
Weeks 8–9: Cash forecast integration with NetSuite/Bill/Gusto
Weeks 10–11: Intercompany loan documentation, transfer pricing methodology, treasury settlement procedures
Week 12: First weekly cycle on new system; sponsor walkthrough

Measured results

Metric	Before	After	Delta
Bank accounts	23	11	−52%
Banks	5	2	−3
Idle cash earning <0.5%	~$4M	~$0	−$4M
Concentrated cash earning ~5% MMF	~$0	~$22M	+$22M
Annual interest income	~$2K	~$1.1M	+$1.1M
Weekly treasury cycle	2 days	90 minutes	−85%
Daily cash position visibility	None	By 8am	—
IC loan documentation	Thin	Formal	—

Alternatives considered

Option	Time	Cost band	Strengths	Weaknesses
Kyriba (treasury management system)	5–7 months	$320K–$520K + ongoing	Enterprise-grade	Over-scoped at $250M
FIS Quantum	5–7 months	$240K–$420K	Strong international	Over-scoped
Trovata (modern TMS)	3 months	$140K–$220K + license	Modern UI	Subscription cost ongoing
Build on existing bank tools + NetSuite (selected)	12 weeks	$80K–$140K	Right-sized; preserves banks	Maintenance load

When this approach fits

$50M+ revenue with 5+ bank accounts
PE-backed holdco with multi-entity structure
Material idle cash in operating accounts
Quarterly sponsor reporting with cash discipline pressure
Active intercompany activity needing formalization
NetSuite, Sage Intacct, or similar GL with API access

Lessons learned

Bank consolidation first. 23 accounts is unmanageable; 11 is operable. Consolidating is cheaper than automating 23.
Sweep + MMF discipline. Idle cash in operating accounts earns nothing; daily sweep + MMF earns enterprise-relevant yield.
IC loans need documentation. Tax authorities expect arms-length pricing; formal loan agreements support deductibility of interest.
Daily cash position changes culture. Once treasurers and controllers see daily, weekly feels intolerable.
Concentration policy reviewer-signed. Sweep rules need documentation; policy changes need reviewer sign-off.

Frequently asked questions

Why not Kyriba?

Excellent product, way over-scoped at $250M revenue. For $1B+ companies with multi-currency, multi-instrument hedging, treasury workstation, and multi-bank reporting at scale, Kyriba is right.

How does daily sweep actually work?

Bank API or auto-sweep configured on operating account: at EOD, sweep balance above threshold to concentration account. Reverses next morning if needed.

What about FX risk on international cash?

Foreign cash translated to USD daily; FX policy (no hedging vs. forward hedge) documented; gains/losses to OCI per ASC 830.

How do you handle bank fraud controls?

Dual approval threshold ($50K typical), positive pay enabled, ACH validation rules, monthly dual-control review of beneficial ownership.

What's an arms-length intercompany loan rate?

IRS Section 482 transfer pricing: based on creditworthiness, term, currency. Documented methodology — typically benchmarked against comparable unrelated-party debt.

How do you forecast cash?

13-week rolling forecast pulled from AR (NetSuite), AP (Bill), payroll (Gusto), debt service schedule, capex pipeline. Refreshed daily.

What about banking covenants?

Minimum operating balance, debt service coverage ratio — tracked against actuals; alerts on approaching breach.

How does this support PE sponsor reporting?

Sponsor pack auto-generated: cash position, concentration breakdown, idle-cash analysis, IC loan position. Reduces quarterly reporting prep from days to minutes.

Can you handle international banking?

Yes; multi-currency concentration with FX policy. Full Kyriba-grade international hedging is out of scope for the right-sized approach but supported in basic form.

What's the typical ROI?

Yield improvement on concentrated cash + idle cash recovery typically pays back the project in 3–9 months.

Idle cash sitting in too many bank accounts?

A 30-minute call walks your bank structure and tells you where the working capital is trapped.

Book a free call