Archer Daniels Midland Co. operates more than 270 food-processing plants across more than 140 countries. That globally dispersed operation calls for processing some 2.5 million invoices each year from 220,000 suppliers, the company says.
To get a better handle on all those invoices as well as the purchase orders that precede them, ADM has deployed an electronic invoicing system from Tradeshift Inc. designed to expedite and improve how its buyers and purchasing managers interact with suppliers.
“Transaction efficiency is fundamental to our business, and we needed to find a vendor with a global footprint to establish a single system throughout our company,” an ADM spokesman says. “The Tradeshift platform will allow us to innovate and improve collaboration and transaction efficiency across our global supplier network without disrupting our existing infrastructure.”
ADM has deployed Tradeshift’s Internet- or cloud-based Collaborative Workflow system, which enables ADM employees across the company’s global operations to exchange information online with one another as well as with ADM’s suppliers. When ADM receives an invoice from a supplier that does not match the specifics of the associated purchase order, for example, an ADM buyer or purchasing manager can instantly return the invoice to the particular department and person responsible for sending the invoice at the supplier—“instead of spending hours on the phone” to locate the right person and describe the erroneous invoice, Tradeshift says.
The Collaborative Workflow system also enables ADM’s personnel to collaborate among themselves, such as to route invoices to personnel authorized to approve them. The system integrates with a company’s back-end financial accounting and inventory management applications to automatically update expense and inventory records. It also provides records of online communications among a client’s employees as well as with a client’s suppliers, enabling the client company to search those records for particular communications or invoices.
Vishal Patel, head of Industry Solutions for Tradeshift, says the company’s software is used by some 500,000 buyers and suppliers, and handles electronic invoices with a total value of about $300 million per month. Buyers using Tradeshift have the option to use pay suppliers using PayPal, the online payment system owned by eBay Inc., and Tradeshift is exploring making other payment systems available as well, Patel says.
Tradeshift earns its revenue by charging annual subscription fees to buyers. Although Patel declines to describe those fees, he notes that the costs for high-volume users can run less than $2 per electronic invoice based on volume and number of services used. Among Tradeshift’s services are scanning paper invoices that its clients receive from some suppliers. The company charges no fees to suppliers.
Tradeshift takes from a few weeks to a couple of months to set up client buyers, Patel says. For suppliers, getting connected to Tradeshift is typically done within a few days, thanks to connections Tradeshift has already established with several invoice-generating systems from financial software applications including Intuit Inc.’s QuickBooks and others from Sage Software Inc., Oracle Corp. and SAP AG.
Tradeshift, which was founded in 2009, has received a total of more than $120 million in venture capital from investors including Notion Capital, Kite Ventures, ruNet Holdings and Scentan Ventures. Scentan, based in Singapore, led Tradeshift’s largest funding round of $75 million earlier this year. Tradeshift says it is using the funds drive its global expansion across the United States, Europe and Asia, with a particular focus on China and Japan.
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