Scaling Healthcare: Building a Treasury Function for Every Stage of Growth

Healthcare is a foundation of global wellbeing and a rapidly evolving sector. From startups developing innovative treatments to multinational corporates delivering care, every healthcare company faces a complex financial journey.

A robust treasury function is critical to navigating this path successfully. As companies grow, managing cash, funding, and risk becomes more intricate. Without the right bank, financial infrastructure may fail to support expansion goals. 

To thrive from initial innovation to global scaling, healthcare companies need a financial ally that grows with them, offering expertise, capabilities, and global reach. The right bank can help establish a scalable treasury function at each growth stage, enabling financial stability, operational efficiency, and long-term success.

As healthcare companies transition to mid-stage growth, financial complexity increases.

1. Early-stage challenges 

Early-stage healthcare companies — whether in medical technology (MedTech), pharmaceuticals, or clinical research — often operate from a single location with small, multifunctional teams. Treasury tasks, such as payments, liquidity management, and FX, are commonly handled manually using spreadsheets. Enterprise resource planning (ERP) systems often lack automation, and bank connectivity is typically limited to online platforms rather than application programming interfaces (APIs) or host-to-host connections. 

As they expand globally, local bank accounts are opened ad hoc, frequently through outside legal advisors, without considering long-term treasury integration. This largely leads to fragmented financial systems: multiple banking relationships, disjointed payment processes, and decentralized cash management. Limited visibility into liquidity and delayed updates from overseas subsidiaries make it difficult to manage working capital. Additionally, companies with international operations face FX risks without the expertise or tools to manage them effectively, or to identify them. 

Healthcare companies tend to globalize earlier in their lifecycle compared to other industries to commercialize products, secure regulatory approvals, and engage with government agencies. However, rapid growth without a solid treasury foundation creates operational inefficiencies that can hinder long-term success. While treasury is not viewed as a revenue driver for growth-motivated, earlier-stage companies, particularly those owned by financial sponsors, neglecting it can become a constraint as companies scale. Proactive steps — such as investing in single global ERP systems, enhancing bank connectivity, and implementing centralized cash and FX management — can mitigate these risks. Working with a bank that understands healthcare growth cycles is therefore essential.

2. Rationalizing treasury for mid-stage growth 

As healthcare companies transition to mid-stage growth, financial complexity increases. Rapid expansion without a structured treasury approach may lead to inefficiencies in liquidity management, FX exposure, and financial visibility. To address this, companies should take a systematic approach to treasury optimization. 

Start with a country-by-country analysis to understand cash locations and the operational role of each entity. Is it a distributor, manufacturing hub, research center, or sales and marketing entity? What are its cash flow needs? This assessment forms the basis for a structured liquidity strategy. 

Next, determine the optimal location for centralizing cash. Consider tax, legal, and operational factors rather than defaulting to predefined banking structures. This evaluation helps decide whether regional or global cash pooling is the best solution for improving liquidity and capital efficiency. 

By this stage, companies have in many cases accumulated multiple banking relationships. While access to credit and compliance with local regulations are important, excessive fragmentation limits visibility and control. Consolidating banking relationships with a strategic provider likely simplifies cash pooling, extends cutoff times, and improves FX management by concentrating volumes and optimizing spreads. 

Technology integration is critical as well. Connecting ERP systems with banking platforms undoubtedly reduces manual processes and enhances real-time visibility into cash positions and currency exposures. Without this integration, companies struggle to implement efficient cash concentration or FX hedging strategies. Treasury rationalization — across banking relationships, technology, and structural setup — should be a unified process. A streamlined account structure enables efficient cash pooling, which helps improves FX risk management. Clear visibility into liquidity and exposures is essential for effective management.

Mid-stage companies can experience major corporate events like acquisitions, divestitures, or IPOs, which serve as opportunities for treasury transformation. For example, post-acquisition, firms must decide whether to close inherited accounts or adopt new account structures. An IPO often prompts enhanced liquidity and working capital management strategies. 

3. Flexibility for large-cap companies 

As healthcare companies reach large-cap status, treasury management becomes even more complex. With operations sometimes spanning over 100 countries, these firms must maintain financial efficiency while adapting to rapid strategic shifts like mergers, acquisitions, and divestitures. 

Large-cap companies need a treasury infrastructure that can integrate new legal entities and divest noncore assets almost seamlessly. Many deploy global liquidity structures with a central cash pool where entities contribute and withdraw liquidity as needed. This enables capital to be allocated efficiently for strategic initiatives like M&A, debt repayment, and growth investments. 

Payments and receivables are streamlined through centralized accounts for each currency, using payment-on-behalf-of (POBO) and receivables-on-behalf-of (ROBO) models. Treasury management systems (TMS) and ERP platforms consolidate FX data globally, enabling precise exposure management and hedging strategies. 

To enhance operational efficiency, large-cap firms establish shared service centers and regional treasury hubs. Treasury teams may be located in financial hubs like Dublin, Singapore, or Sao Paolo, while shared service centers operate from cost-effective locations like Budapest, Manila, or Costa Rica. This structure balances operational efficiency with central control. 

Working with a single global bank offers significant advantages. A unified banking infrastructure simplifies integrating new entities and facilitates divestitures. Since all branches and technologies operate on the same platform, companies can easily add or remove locations without complex restructuring. This approach enhances liquidity management, FX risk mitigation, and cash flow optimization across diverse geographies.

As healthcare companies reach large-cap status, treasury management becomes even more complex. With operations sometimes spanning over 100 countries, these firms must maintain financial efficiency while adapting to rapid strategic shifts like mergers, acquisitions, and divestitures.

Conclusion 

A well-structured treasury function is vital for healthcare companies at every growth stage. Early-stage companies should establish strong foundations to support rapid growth and international expansion. Mid-stage firms must rationalize banking relationships, enhance visibility, and integrate technology to scale effectively. For large-cap companies, flexibility is key to managing liquidity, FX exposures, and strategic transactions. 

While early investment in treasury optimization smooths growth, it is never too late to refine financial operations. Engaging a bank that combines sector expertise and global capabilities can allow healthcare companies to continuously optimize their treasury infrastructure, remaining agile and competitive. 

Citi uses the same platforms and connectivity for healthcare companies of all sizes, ensuring solutions deliver treasury efficiency while scaling with companies’ business objectives. With a network that spans 95 countries, a full suite of services, and a robust banking platform, Citi is well positioned to be the bank healthcare companies won’t outgrow, helping to advise companies on what’s next to pursue financial stability, operational efficiency, and long-term success.

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