About This Template
A documented treasury policy is one of the most consistently absent items in the finance function of early-stage fintech and technology companies — and one of the first things that sophisticated investors, auditors, and regulators look for when they engage with a company beyond the seed stage. The question is not merely whether a company has cash: it is whether the company has a documented, board-approved framework for where that cash is held, how it is protected, and what constraints apply to how it can be invested. Without such a policy, the CFO is making ad hoc decisions about material company assets with no oversight and no audit trail.
This template provides a structured starting point for formalising that policy. It is particularly important for FCA-regulated entities (EMIs, payment institutions, investment firms) that have obligations around safeguarding client money and maintaining adequate financial resources. It is equally relevant for any company that has raised a significant round and has more than two or three months of cash sitting in institutional accounts — because that cash is both a material asset and a governance responsibility.
The template includes three sheets: a Policy Summary sheet for capturing board-approved treasury parameters and investment constraints, a Cash Tracker for monitoring balances across all institutions and flagging concentration risk, and an Investment Log for tracking any cash placed in instruments beyond standard bank accounts. It is designed to be completed by the CFO, reviewed by the CEO, and formally adopted by the board at least annually.
What's Included
- Instructions sheet — Purpose of a treasury policy, regulatory context, and setup guidance
- Policy Summary sheet — Board approval details, treasury objectives, minimum cash buffer, permitted investment types, counterparty limits, FX exposure rules, credit rating requirements, and review frequency
- Cash Tracker sheet — Institution-by-institution cash balance tracker with GBP-equivalent conversion, percentage of total, credit ratings, maturity dates, and a policy limit check
- Investment Log sheet — Record of all cash placed in instruments beyond standard current accounts: fixed-term deposits, money market funds, T-bills, with interest rates, maturity dates, expected returns, and status tracking
How to Use This Template
- Complete the Policy Summary first. Before tracking any balances or investments, document the policy framework. Enter the company name and the date the policy will be presented to the board. Work through each section with the CEO before the board meeting so you arrive with an agreed position rather than an open discussion.
- Define your minimum cash buffer. Enter the number of months of operating expenses that must always be maintained in liquid, immediately accessible accounts. For most growth-stage companies this should be at least 3 months; for FCA-regulated entities it should align to your ICaAP/ILAAP requirements, which typically set a higher minimum.
- Set maximum single-institution exposure. Enter the maximum GBP amount (or percentage of total cash) that can be held at any one institution. Diversifying across institutions protects against the risk of an institution failure or account freeze — a risk that is not theoretical for fintech companies, given historical instances of challenger banks restricting access during liquidity events. Most policies set a maximum of 50-60% at any single institution for smaller cash balances, stepping down to 30-40% as total cash grows.
- Specify permitted investment types. Mark each investment category as Permitted (Y) or Not Permitted (N): standard bank deposits, money market funds (AAA-rated only), UK Treasury bills, investment-grade corporate bonds, and any other instruments. For most early-stage companies, only bank deposits and money market funds should be marked Permitted — corporate bonds and anything more complex introduce risk that is not appropriate without dedicated treasury expertise.
- Set the maximum maturity. Enter the maximum term in days for any investment. 90 days is a common default for companies that need to maintain liquidity flexibility. Extending to 180 or 365 days is appropriate only if you have high confidence in your 12-month runway and can afford to have cash locked up for that period.
- Complete the Cash Tracker with current balances. Enter each institution where the company holds cash: bank name, account type (current, savings, deposit), currency, local currency balance, and GBP equivalent. The template calculates the percentage of total cash held at each institution and flags if any single institution exceeds your policy limit. Update this tracker at each month end.
- Record all investments in the Investment Log. Every time cash is placed in an investment (even a straightforward fixed-term bank deposit), log it here: date placed, institution, instrument type, currency, amount, interest rate, maturity date, expected return, and status (Active or Matured). This creates a complete audit trail and ensures the board and auditors can see exactly where surplus cash has been deployed and what return has been achieved.
- Present to the board and obtain formal approval. The treasury policy should be a board paper item, not a management decision. Present the Policy Summary to the board, obtain a board resolution approving it, and note the approval date in the Policy Summary. This is the moment it becomes a governance document rather than a spreadsheet.
- Review annually or on trigger events. The policy should be reviewed at least annually — more frequently if your cash balance changes materially (e.g. post-fundraise), if you enter a new regulated activity, or if a counterparty's credit rating changes. Note the review date and any changes in the Policy Summary.
- Integrate with board reporting. Add a one-page Cash and Treasury summary to your monthly board pack: total cash by institution vs policy limits, any current investments, total yield earned year-to-date, and any policy breaches or near-misses. This demonstrates treasury governance in a format that boards and investors expect.
Frequently Asked Questions
Who formally approves the treasury policy?
The board of directors. The treasury policy is a governance document, not a management decision, because it sets the parameters within which the CFO is authorised to deploy company cash. In practice, the CFO drafts the policy, the CEO reviews and agrees it, and it is presented to the board as a formal paper item with a resolution to adopt it. For companies with audit or finance committees, the policy should pass through committee before the full board. The board approval date should be recorded on the Policy Summary sheet and refreshed every time the policy is updated.
How often should the treasury policy be reviewed?
At minimum annually — typically aligned with the financial year end or the first board meeting of the new financial year. It should also be reviewed on trigger events: a material fundraise (which changes the total cash position significantly), entry into new regulated activities, a change in the company's risk profile, a change in market interest rates that makes previously unattractive instruments relevant, or a credit rating downgrade at a counterparty institution. Any review should be documented with a date and the nature of any changes made.
What happens when the treasury policy is breached?
A breach must be reported to the board promptly — not at the next scheduled meeting, but as a matter requiring immediate notification. In the Policy Summary, document the breach reporting obligation and the required response timeline. Common policy breaches include an institution's balance exceeding the single-institution cap (often caused by receipt of a large invoice payment or drawdown of a tranche), an investment maturing without the proceeds being redeployed within the permitted timeframe, or a counterparty credit rating falling below the required minimum. For FCA-regulated firms, material treasury policy breaches may also require regulatory notification — check your firm's specific regulatory obligations with your compliance officer.
Should crypto or digital assets be included as a permitted investment?
For most corporate treasury policies, the answer is no. Corporate treasury cash has two primary objectives: preserve capital and maintain liquidity. Crypto and digital assets do not reliably meet either objective — they carry high volatility risk that could cause the capital value to decline significantly, and liquidity can be constrained during market stress events. There may be a legitimate business case for holding a small allocation in digital assets (for example, if the company's product involves crypto and there is a hedging rationale), but this should be treated as a separate, board-approved allocation with its own risk framework, not included within the standard treasury policy. Mark Crypto as N (Not Permitted) in the Policy Summary unless you have a specific, documented rationale approved by the board.
What credit rating should I require for counterparty banks?
For current accounts used for day-to-day operations, most policies require at minimum a BBB- (investment grade) credit rating from at least one major rating agency. For term deposits or money market fund placements, many policies require a higher minimum of A- or A3. For UK companies, operating accounts at major UK clearing banks (Barclays, HSBC, Lloyds, NatWest) typically meet a BBB+ or higher threshold. Challenger banks and fintech-based business accounts should be assessed individually — many are unrated, in which case your policy should set a maximum balance cap for unrated institutions as a proxy for risk control.
How should I handle FX exposure in the treasury policy?
If your company holds cash in currencies other than GBP (or your base currency), the treasury policy should set a maximum FX exposure as a percentage of total cash. The most common approach is to set a cap on the proportion of total cash held in non-base currencies — typically 20-30% for companies with limited international operations, with specific exceptions for operational accounts in currencies where you have significant recurring expenditure (e.g. a US dollar payroll for a US team). The Cash Tracker tab includes a GBP-equivalent column for this purpose. Review FX exposures at each month end and flag any that are approaching the policy limit.
