By Mike Cowles

CEO

Tradeshift

The Gap Between Compliance and Transformation

One of the most important lessons emerging from Saudi Arabia’s digitisation journey is that compliance alone does not create operational transformation.

An organisation can be fully compliant with ZATCA Phase 2 requirements while still:

• Exchanging purchase orders by email
• Onboarding suppliers manually
• Resolving invoice disputes over phone calls
• Managing approvals through disconnected workflows
• Reconciling invoices across siloed ERP environments
• Waiting months to complete payment cycles

This is the hidden gap many enterprises are now confronting.

The invoice may be digital. The enterprise often is not.

Across the Kingdom, many organisations have invested heavily in compliance infrastructure, middleware, ERP integrations, tax engines, XML conversion layers, but stopped short of transforming the underlying supplier relationship.

As a result, businesses risk digitising paperwork while leaving operational friction untouched.

And that friction is expensive.

Saudi businesses still take more than five months on average from invoicing to receiving cash, the longest working capital cycle in the region. Across the Middle East, an estimated USD 54.7 billion remains trapped on corporate balance sheets due to working capital inefficiencies.

These are not simply finance metrics.

They are indicators of fragmented commerce infrastructure.

The Supplier Connectivity Problem

At the centre of this challenge sits an issue that is often overlooked in discussions around e-invoicing:

Supplier connectivity.

Most enterprises today operate inside fragmented supplier ecosystems.

Large strategic suppliers may be digitally connected through ERP portals or EDI integrations. But the long tail of suppliers, often representing the majority of supplier relationships by volume, still operate through PDFs, emails, spreadsheets, and manual reconciliation processes.

This creates operational bottlenecks across procurement, AP, treasury, and supply chain functions simultaneously.

It also creates risk.

As Saudi Arabia accelerates giga-projects, advanced manufacturing initiatives, logistics infrastructure, and industrial localisation programmes, supply chains are becoming larger, more international, and more complex.

Managing those ecosystems through disconnected point solutions is increasingly unsustainable.

The challenge is not simply moving invoices electronically.

The challenge is creating a digital commerce layer where buyers, suppliers, banks, and platforms operate through shared infrastructure in real time.

That is the difference between digitisation and networked commerce.

Why Traditional Approaches Fall Short

Many enterprises still approach transformation through an ERP-centric lens.

ERP systems remain essential. They are critical systems of record.

But modern supply chains require more than internal process management.

They require external connectivity.

Most ERP environments were never designed to manage the complexity of global supplier ecosystems, multi-enterprise collaboration, embedded financing, or real-time network intelligence at scale.

This becomes particularly visible in Saudi Arabia, where large enterprise groups frequently operate multiple ERP environments across subsidiaries, regions, and business units.

The result is often a patchwork architecture:

• ERP modules
• Compliance engines
• Supplier portals
• AP automation tools
• Bank integrations
• Manual workflows between systems

Every additional layer increases operational complexity.

And every disconnected workflow extends the payment cycle further.

This is one reason why many AP automation initiatives globally fail to deliver expected ROI. Companies automate invoice capture but leave approvals, supplier communication, exception handling, and financing workflows fragmented.

Automation without connectivity simply moves the bottleneck downstream.

Why the Next Chapter Is Networked Commerce

The future of Saudi commerce will not be built on isolated systems.

It will be built on connected networks.

This is where the opportunity becomes transformative.

Because once suppliers, buyers, invoices, approvals, payments, and financing operate on shared digital infrastructure, entirely new possibilities emerge:

• Real-time supplier visibility
• Faster onboarding
• Automated exception handling
• Embedded financing
• Dynamic discounting
• AI-driven spend intelligence
• Real-time cash flow forecasting
• Faster payment cycles
• Stronger SME participation
• More resilient supply chains

This is not theoretical.

It is already happening globally.

And Saudi Arabia is uniquely positioned to accelerate it faster than most markets because the Kingdom is building digital infrastructure at national scale with unprecedented momentum.

Why Tradeshift Is Well Positioned for Saudi Arabia

At Tradeshift, we believe Saudi Arabia’s next transformation phase requires more than compliance software.

It requires commerce infrastructure.

Our approach has always been network-first rather than portal-first.

Today, more than one million businesses across 190 countries transact through the Tradeshift network. That matters because supply chains are ecosystems, not bilateral relationships.

A supplier connected once should be able to transact everywhere.

This becomes especially important in Saudi Arabia’s evolving economy, where enterprises increasingly manage global suppliers alongside local SMEs across complex procurement environments.

Our platform is designed to bridge exactly the gaps now emerging in the market:

• Multi-ERP integration across fragmented enterprise environments
• Supplier onboarding at global scale
• AI-driven AP automation
• Real-time document exchange
• Embedded financing capabilities
• Cross-border compliance support
• Workflow orchestration across procurement and finance

Most importantly, we believe supplier experience matters.

When suppliers gain visibility into invoice status, approvals, payment timelines, and financing access, the relationship changes fundamentally. Commerce becomes more collaborative, more transparent, and more resilient.

That is especially critical for SMEs, which remain the backbone of Saudi Arabia’s private sector.

Working Capital Is Becoming a Strategic Advantage

One of the most exciting developments in the Saudi market is the convergence of commerce and finance.

As invoices become digital and approval workflows become real time, financing can become embedded directly into the transaction flow itself.

This changes everything.

Approved invoices can become immediate liquidity.

Suppliers no longer need to wait months for cash flow certainty.

Banks can finance verified transactions with lower risk.

Buyers strengthen supply chain resilience without negatively impacting their own working capital position.

In markets like Saudi Arabia, where payment cycles remain extended and SME liquidity remains under pressure, this represents a major structural opportunity.

The Window Is Open

Saudi Arabia has a rare advantage.

Unlike many mature economies constrained by decades of legacy infrastructure, the Kingdom has the opportunity to design next-generation commerce architecture from first principles.

Vision 2030 has already demonstrated what coordinated national transformation can achieve.

Now the opportunity is to extend that transformation beyond compliance and into the operating fabric of commerce itself.

The next phase of Saudi digitisation will not be measured by how many invoices are electronic.

It will be measured by how intelligently businesses connect, collaborate, finance, and trade with one another.

That future belongs to connected networks, intelligent workflows, and digitally integrated supply chains.

At Tradeshift, we are proud to support Saudi Arabia on that journey.