Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Payables Automation for Forwarders with Tom Durrenberger
87 Plays1 year ago
In this episode, Tom Durrenberger, CEO at Bravotran, joins Host Brian Glick, CEO of Chain.io, to discuss:
- Software investments for freight forwarders
- Methods for cost saving and improved visibility
- Streamlining the payables and invoicing process
- Industry challenges and culture in supply chain
- BravoTran’s focus on payables automation
Tom was inspired by BravoTran’s ability to bring just the right tools to the freight forwarding world. He saw what BravoTran can do to overcome massive business challenges and it was an opportunity he couldn’t pass up. Listen to his story on the podcast now!
Connect with Tom
Connect with Brian
Connect with Chain.io on LinkedIn
Follow Chain.io on Twitter
Recommended
Transcript
Introduction to Payables with Tom Durenberger
00:00:04
Speaker
Welcome to Supply Chain Connections. I'm Brian Glick, founder and CEO at Chain.io. On today's episode, we're going to go deep into the world of accounts payables, everybody's favorite topic. We've got Tom Durenberger from Bravatrant. Tom is the CEO and has a deep knowledge of one of these really incredibly important parts of the industry that we probably don't spend enough time thinking about, which is how do we make sure that our partners,
00:00:33
Speaker
Agents that everyone's getting paid because if that doesn't happen we've
Tom's Journey: Consultant to CEO
00:00:37
Speaker
all got nothing. So without further ado, here's the episode Tom welcome to the show. It's so great to have you on Why don't we kick off with just tell us a little bit about how somebody goes from Consulting and even before that your background and how you get into the wonderful world of accounts payable automation
00:00:58
Speaker
Yeah, sure, happy to. So my whole life prior to this, I was a consultant and went to business school. Before business school, I was a consultant. After business school, I was a consultant again and got to a certain point where just continuing to be a consultant was increasingly less attractive.
00:01:16
Speaker
uh just was going to involve a bunch of travel and things of that nature that i was less interested in and was looking for other opportunities and coincidentally right at that same time like it was supposed to happen got outreach from a headhunter who was searching for somebody to fill a role at my previous company hut tran
00:01:35
Speaker
And that was in, uh, gosh, I took that job in early 2020. So right before the world kind of fell apart, I think I started the week before the NBA canceled all their games. So it was a, it was an interesting time to be starting a new job and that was basically it. So I had no great passion for payables before joining hub train, but it sucks you in. That's all I can say. So I want to ask you a question before we get into some of the stuff about Bravo trend and all of that.
Responsibilities of a CEO: Learning and Decisions
00:02:01
Speaker
Yeah. One of the great things about being a consultant is you get to give the advice leap.
00:02:05
Speaker
What's the transition been like going from consultant to CEO and suddenly not being able to walk out the door of something doesn't work? Yeah, before I took this job, I used to watch old videos of Steve Jobs. I just think he's like such an interesting guy. And he was in talking with a bunch of business school kids at Stanford. And this is before he became
00:02:24
Speaker
a guy. He was just like a guy, not yet the guy. And he was in there and he was talking to them and he was asking, geez, how many people here are going to go into consulting? They don't show the audience, but you can tell a bunch of people are raising their hands. That's tough, man. And he told them, you know, basically, you don't have to live with the decision.
00:02:42
Speaker
right? When you're a consultant, you parachute in, parachute out, and you aren't really learning from those decisions. And basically, the upshot of this story is I found that to be exactly true. So when you make decisions, you make personnel decisions, you make decisions about how to build a product or how to position yourself with a particular customer or these sorts of things, you learn a lot more when you got to eat your own dog food, right? And that's just the fact of life.
00:03:09
Speaker
It's 100% true, and dogfooding is a thing we talk about a lot here at Chain, right? That it's a hard thing to do. Why don't you tell everybody a little bit about what Bravo Tran does, and then I want to ask you about how you
BravoTran's Automated Payables for Freight Forwarders
00:03:22
Speaker
dogfood.
00:03:22
Speaker
Yeah. Yeah, good. So, Bravo Tran is the payables automation solution for freight forwarders. And because I've already mentioned it once, it's a spin out from another company called Hub Tran. Hub Tran was the predecessor company. The distinction between Hub Tran and Bravo Tran is basically that Hub Tran served primarily domestic freight brokers for
00:03:44
Speaker
trucking that are dealing with payables invoices from their truckers. In Bravo Tran, that company was sold back in 2021. And Bravo Tran provides a similar offering to freight forwarders. It's been redesigned specifically for freight forwarders. We've built it with some additional tools and tricks and things that accommodate the different types of invoices that freight forwarders are receiving from overseas agents, from trucking companies, and from ocean carriers.
00:04:09
Speaker
So in that world, right, how do you guys learn about your customer needs in a world where you're not moving free, right? So you're not eating your own dog food every day. It's, you know, and we have a similar, lots of software companies have this challenge, but it's not software that you use. So how do you guys learn? How do you get feedback?
00:04:30
Speaker
So in this particular case, we're functional in nature, right? So we only do one thing. We have just become, because we see it at so many different customers, probably the world of experts in this one thing. And this one thing is how to process Pables invoices for freight forwarders.
00:04:47
Speaker
How do we learn? Our customers let us know if something isn't working well. And then we're on the hook to fix it. So if we've messed something up very often, we're going back into to solve it after the fact. So that's the main way, just being really intensely deep on just this one thing and doing it over and over again, seeing it, you know, many of the lessons in that we have a Bravo train carry over and the approaches to how we, you know,
00:05:11
Speaker
how we approach invoices carries over from the experience. The core team at Bravo Trim was also at Hub Trim. So we've learned many things about what makes a good payables process. So why do one thing, right? There's a lot of push and pull in software between, okay, well, a lot of those things would be transferable to processing bills of lighting. Why be so hyper specific?
The Importance of Specialized Cloud Solutions
00:05:36
Speaker
So in this case, you've spoken about this on some of your other podcasts episodes, that the world now really lends itself much more to specific point solutions that really would not have been in cloud solutions, that really would not have been possible when everything was on mainframes in kind of an earlier state of the world. But this problem, some of it translates to other areas, but payables in particular is specific in that
00:06:04
Speaker
It's not data extraction from a document. I think that's where you see a lot of similarities, but that's only a part of a payables process. Handling payables well means organizing the work in a certain way. So yes, data extraction
00:06:22
Speaker
in existing entry. There's resolving exceptions with the operations team, who almost always are the ones who are going to have to resolve those exceptions. And so it's much more of a process that lends itself to a complete solution, as opposed to just something that's going to pull text off a page. If you're just pulling text off a page, there are a lot of
00:06:40
Speaker
substitutes for that. You can just offshore that labor, that process. You can have somebody just send it to you in an Excel file. But even if you've got it in that way, you've only solved the very first part of the problem with a payable sentence. So that's why we focus on it. So coming out of consulting, I'm going to say something that's maybe off the top of my head here, but maybe quoting a phrase. I might argue that software companies are the new business consultants.
00:07:08
Speaker
Because as you get more specific, as you do that, you become not just the experts in, again, like what to get out of the invoice, but also what to do with it. And how much time do you guys spend when you go into a new customer having to maybe teach them how to do payables better?
Best Practices and Pitfalls in Payables
00:07:24
Speaker
Yes, I have never quite crystallized it or thought about it in exactly that way. But now that to hear you say it, a lot of our time is spent on best practices, right? Implementing a process, making sure that invoices are coming into a single place so that they can be processed via a single process as opposed to having things go to a bunch of different people or just go to a particular individual's inbox. And there it sits for a month until somebody calls you about it and wonders why they haven't been paid.
00:07:52
Speaker
So, a lot of it does come down to implementing those best practices and I suppose that maybe speaks to how I wound up here or maybe stuck around doing it. Yeah, I'll say from the vantage point of Chain.io and we do lots of implementations alongside of lots of software companies
00:08:14
Speaker
It's solving lots of different problems across the supply chain. The almost universal predictor that I can see at the beginning of doing an implementation where we're alongside another software company is whether the people inside of the forwarder or shipper actually understand what they bought and the fact that it's going to change their business. Whether that's rate management software, whether that's invoice automation, whether that's visibility software.
00:08:44
Speaker
You know, so many times they buy it and then they go, okay, well, we don't really want to do anything different tomorrow compared to what we did yesterday. We just want new software. And then bad things happen. Right. Yeah. No, definitely whoever wrote the code for that had in mind a process that presumably this new software needs to accommodate. Yes. I agree 100%. And I'm thinking about some of our recent customer interactions and it rhymes for sure.
Aligning Sales with Customer Success
00:09:11
Speaker
Yeah.
00:09:11
Speaker
You know, it's funny that the tricky part in all of this and maybe, I don't know how much of this you want to share from, you know, the magic behind your curtain, but salespeople are not always the best at explaining that before they want to get the paper because that's a potential blocker, right? I don't know what your experience has been as far as having to explain that either before or after someone signs the piece of paper.
00:09:34
Speaker
Well, so our salespeople are still on the hook because our pricing is transactional in nature. So customers have to use the product and our salespeople get commission on how much our customers are using the product. So I think at least there we've appropriately aligned incentives to make sure that's getting surfaced in an appropriate way.
00:09:52
Speaker
You know, that's actually really good. That's a very powerful way of getting around that problem. So we certainly see, you know, take the old, it's easy to pick on SAP, but you know, the $50 million SAP implementation that gets started. And then people realize, oh wait, there's business process improvement that has to happen here. We don't just install it and magically everything's better. I think people understand that better now, but 20 years ago, I literally had to have those meetings with customers where
00:10:19
Speaker
Okay, we're rolling out SAP and people in the organization would not have gotten the message that the idea is to use the software to do things differently, not to build enough modifications to the software to make it exactly the crappy process that you had before you had the software. Those are just more consulting projects from my prior consulting life.
00:10:44
Speaker
It's a partially implemented new system. It was a good idea. That's just more money you can pay to consult this later on. That is absolutely 100% true. So you guys at Bravo Trend, you guys have taken a path that is a smaller team, less
Product-First Growth Strategy at BravoTran
00:11:01
Speaker
aggressive marketing than, let's say, what was going on during the peak of the VC boom in this industry. The day we're recording this, we're seeing even more upheaval at Dave Clark leaving Flexport today and the like. What's the philosophy and what's the theory behind the way you guys have chosen to approach growth?
00:11:22
Speaker
Yeah, so we probably, to a fault, are focused on product first. We think we've built the best mousetrap for this one specific thing. We have built the greatest product ever for handling freight forwarders payable indexes that has probably ever been invented by mankind. And we invested a lot in that. We had a lot coming from Hubtran, I'll say candidly. This is one of those cases where, you know,
00:11:45
Speaker
There's the expression, we started out on this project not because it was easy, but because we thought it was going to be easy. It turned out to be more complicated than just kind of taking hub-tran and bringing it to freight forwarders. But so, I mean, when we've been so focused, we like our team to be motivated. All of our team, everybody in our company is an equity stakeholder in the company and meaningful equity.
00:12:09
Speaker
And we've just found that, again, we're solving something that is so specific that everybody on the development side, our team is small enough that everybody knows what everybody else is doing so we can remain in sync very easily on the sales and customer success side and operation side. There aren't a lot of different points that have to be connected and maintained. We can do everything with the small team.
00:12:31
Speaker
and the nature of the product and the problem that we're solving is such that a very focused approach seems to lend itself to it. You have to understand, you can't have all of that information distributed across a bunch of different people inside the company, how to implement the best payables process. What makes this fun for you?
00:12:51
Speaker
Honestly, I love sales. That's one of the most fun things. Whenever I can get involved in sales and we close a big deal, there's really nothing quite like that. I like negotiating, and I like selling. And then somebody would be mad at me if I didn't say, also, I love implementing new, great processes that our customers are going to pay. Which I do. It is actually rewarding to see that, hey, we had this problem before. It was really gnarly. BravoTrain made it a lot better. That's always really rewarding.
00:13:18
Speaker
Gosh, it was taking us an extra two weeks to a month to process all of our payables invoices. And that was just delaying our receivables invoicing. And now we don't have that problem anymore because it's probably just chugging on that stuff. That's great. So explain that to me because I think if you haven't spent a lot of time in the way that freight works and you think about payables, I used to say that when we would walk into the accounting department, you could tell the difference who was in payables and who was in receivables because receivables would sit by the window.
00:13:47
Speaker
because they always got the better desks, right? Because they were getting the money in and Pables was sending the money out. But they are kind of interconnected. And so like, when you're selling this, is the ROI just all about cost savings? Or is there, you know, more value that this is bringing to the customers?
00:14:05
Speaker
No, there's a couple of sources here. So the cost savings is straightforward, right? You're automating the payables process that impacts not just the payables function, but also the operations function because outside of Bravo train, there's a bunch of just point to point communications back and forth with the operators. Hey, is this a valid charge? It's on your shipment. It's not what you accrued. Are we supposed to pay this or not? We streamlined that process also. So it's time back.
00:14:30
Speaker
for both the Payables team and the Operations team, which is great and important in the direction things are moving. It speeds up the process. So most of the time for freight forwarders, not always, but most of the time, they're waiting to send receivable invoices until after the last Payables invoice has been processed. But the Payables invoices have to be paid to term, usually net 30 days or whatever the particular terms of that invoice happen to be. So if you're delaying sending out your receivables invoices, you're just extending
00:15:00
Speaker
benefit in a industry with such some margins as freight forwarding, that's usually pretty meaningful. Beyond that, though, also there's the fact that this makes the process much more visible. So free Bravo Tran, oftentimes it looks like freight forwarders are receiving invoices from a bunch of different places to a bunch of different places. It's a lot of stuff that's happening in people's individual mailboxes. It's very hard for a manager either on the payable side or on the operation side to know, okay, like,
00:15:30
Speaker
What actually is out there? What is pending? What still needs to be paid? And now all of a sudden putting it all inside of Bravo Tran, putting the entire process inside Bravo Tran makes it much simpler and more visible so that actions can be taken appropriately. Yeah. And I think to take a step backwards into the life of a freight forwarder or a CFO at a freight forwarder at least.
00:15:49
Speaker
You know what, I think some people may not understand who, you know, depending on where you come from in the industry is that if you're day to day managing the cashflow at a freight forwarder, one, you are moving around a lot more money than you make, right? You're maybe paying two, three or a couple of years ago, $20,000 for a container. And you're really only making a hundred or a couple hundred bucks on that.
00:16:12
Speaker
But you've got to move all that money through your company efficiently. And you can't just bill in advance what you think it's going to be. Like that's against the law in the U.S., right? To just guess at what the price is. You have to build your customer what you paid the carrier. So I've actually seen companies either go out of business or be on the verge of going out of business by just managing that process badly.
00:16:36
Speaker
and putting out money before they have the chance to take that money in on the receivable side. It's a huge deal. And we hear it described by our customers as like, there's this constant state of tension and tightness in the belly for the managers who don't really know what is out there. Well, now they can see everything that is potentially needs to be paid as soon as it comes into their system. As soon as it becomes visible on Bravo training gets either posted or flagged as an exception.
00:17:03
Speaker
I personally experienced a company in my career where we were putting out literally tens of millions of dollars a month in customs duties that had to move through along with the freight on a revenue of tens of thousands of dollars of our services.
Cash Flow Challenges in Freight Forwarding
00:17:21
Speaker
And, you know, it was a large SAP shop and we had to fix the process. We had acquired the company, but before us, they would sort of on the 25th day of the month, figure out what
00:17:33
Speaker
duties needed to be paid and then have to go beg this big corporation to get a check within the next six days so they could pay it on the first, right? Because they didn't have the money in the bank. There was no float. What we ended up doing was streamlining their payables and receivables in a way where they were calculating and invoicing for every shipment in real time. So that by the end of the month, the only thing I had to deal with in the last six days
00:18:00
Speaker
was the last six days, not the entire month's invoicing. So yeah, I've seen companies like literally on the verge of just not being able to pay, you know, tens of millions of dollars on, again, thousands of dollars of revenue. So it's a real problem. Very common. Yes, it is a problem. If you need me to give a testimonial to your customers. Why this is important. So you love sales. You love seeing these implementations go through. Now I gotta ask you the other question. What do you hate?
00:18:28
Speaker
What's not fun about being the CEO of a software company? I suppose it's some of the stuff that you've described already where it's a partial implementation where we implement the product, but customers never really get to the point
00:18:45
Speaker
used as the complete payable solution. If you're just using it kind of as a partial solution or just for some certain invoices, you're not getting the full value out of it. And that's kind of probably the biggest issue and the thing that causes the most frustration. We built what we think is really the best mousetrap out there, but at the end of the day, it takes somebody to commit to using it. And sometimes that's hard to navigate. There are a bunch of different stakeholders inside these organizations. Sometimes automation, candidly, could be a hard sell because
00:19:15
Speaker
you're touching things that people are doing and they want things done a certain way and it's always easier to just throw more bodies at it. You try to get to a different point. Where do you go when you have the best mousetrap? This is literally coming out of a meeting I had an hour ago with my internal team, but like we're building software and we have people in the company who their job is to write more code, right? Like they write code for a living. And at some point you go, okay, well, have we finished the mousetrap, right? Is it done, right?
00:19:45
Speaker
Where do you find that inspiration or is there a point where the mousetrap is built? I would say for some geographies, I think the mousetrap is built. The US by its nature tends to have simpler invoices. Taxes is usually not a factor in most of these invoices. They just tend to be simpler.
00:20:06
Speaker
I don't know how much detail. Single job invoices are much more common in the US, whereas multi-job invoices and tax are much more complicated in other geographies. So a lot of that comes from customers in some of the new geographies that we're starting with for the first time. That's where we're at right now, but I think Payables is even there, mostly a solved problem.
00:20:26
Speaker
And there are little features. Customers will ask us, hey, can this be a little bit more visible? Or can we have quality of life stuff that we are always happy to accommodate, usually, mostly, if we think they're good ideas. So it comes from customers. That's where the improvement comes from.
00:20:41
Speaker
I'll say that. And then the other thing is we're working on a new product that is going to deal with specifically agent invoices. Again, that was a pain point for customers. Gosh, we have this problem around agent invoices and needing to settle those up at the end of the month.
00:20:57
Speaker
It would be great. And then by the way, we've got paid and often these are overseas payments, frequently in foreign currencies. It would sure be nice if we had a better process for those. So that's a new thing that we're working on. Again, we're in so deeply with so many of our customers. We're talking with them basically constantly. What do you wish people in this industry were focusing on that they're not? What do you see maybe outside of what you're doing even that like you just gone, Oh man, I wish somebody was solving that problem for our customers.
Standardization and Automation in Freight
00:21:25
Speaker
Yeah, I've got kind of two things. One is so much that happens in this industry is because there is no standardization and there's just extreme fragmentation. So there's no kind of preset way for systems to talk to each other or even simple things like what kind of stuff needs to be included on an invoice. That's something that we touch every day, but standardizing and
00:21:54
Speaker
I mean, this will never happen. But from a pure process perspective, if you were looking at this like an engineer, you would say, gosh, that seems like something where there's a lot of opportunity to improve. And then I think the other one is just around automation. And this is kind of a cheesy thing for
00:22:10
Speaker
automation provider to say, but it's just so important. When things are done by human beings, mistakes are introduced, there are all kinds of problems, things aren't done in a timely fashion. By keeping things kind of siloed and having only a particular individual doing it because they like to do it that way, there's this real tension between kind of standardization that's required by automation and the customization that
00:22:34
Speaker
often times customers want to have or that many forwarders feel is required to serve certain types of shippers and put me down for standardization and automation. I think that's the way the world is going. It just makes for a better process.
00:22:50
Speaker
So I was at a freight waves event a few years back. This was pre pandemic, you know, and there was a, you know, a driver shortage is there always seems to be a driver shortage either too few or too many on a given day. Sure. Sometimes on the same day. Right. But there was a big topic about driver shortage and about being the customer of choice to the provider.
00:23:13
Speaker
Right now we have the shortest swell times, we pay you on time, so on and so forth. It's a big deal for ocean carriers recently. Yeah, all this stuff, right? So I know in the trucking space where you come from, that's a really big deal, right? Because it's owner operators and if you're not paying them on time, they can't handle your loads. If I'm paying Marisk on time or not, they're going to be okay, right? They're not going to go out of business tomorrow.
00:23:36
Speaker
Do you see that same kind of incentive in the payables groups to be a good partner to their cause or does that not translate to the international space? So I think it translates probably most directly in agent relationships. So like that's one where, you know, because those are people that you are involving in effectively your relationship with your customer. Like you're in a team with this person now and you need to make sure that you have a good working relationship with them.
00:24:04
Speaker
You're paying them on time, you're correct amounts and so on. So that's probably where I see it the most. Trucking companies and ocean carriers, as you say, the trucking companies that most of our freight forwarders work with tend to be a little bit bigger than the ones that we saw in the domestic brokerage land, which might be a guy with a truck. That's mostly not who freight forwarders are dealing with, they're mostly dealing with.
00:24:26
Speaker
More established but not always but more established companies and so i think it's just a little more like no pay on time everybody wants to be paid on time in the right amount but i think in particular agent relationships are one where having a better relationship is.
Ownership Culture at BravoTran
00:24:43
Speaker
So before we wrap up here tell me a little bit about the culture in the company what's my personal favorite topic to ask about so how do you describe your culture.
00:24:52
Speaker
heavily ownership based. So it's all consistent, right? We have a small team, it's very focused on these problems. When they tackle a problem and that's on the customer success side or the operation side or the sales side or the engineering side, they own it and they're expected to, right? Like they're expected to fully understand and run that problem to the ground. And that doesn't mean they have to do it individually, but it means they aren't waiting for someone else to step in and help them or check up on it. Like the expectation is
00:25:21
Speaker
We're so small and we're so targeted and so domain specific that you really can understand these problems all the way to the ground. That is the overriding value that we have at Bravo Trail more than anything else. It's focus probably number one and then number two kind of ownership, but I think those two things go hand in hand. That just speaks so much to
00:25:42
Speaker
getting at the customer's problem and getting customer value. I mean, that's just fantastic to hear. You got to understand it all the way down. And we've talked about this before, but that's another advantage of being a point solution. Our sales guys have one thing in their bag. And it's payables. And they've sold so many times that they really can't speak to the problems that our customers are facing. Our customer success people, they have one problem. They know what best practice looks like. So that's a big advantage of being a point solution.
00:26:12
Speaker
Awesome. Well, why don't you tell everybody a little bit about where they can find Bravo Tran and how to get in touch if they're interested. Sure. bravotran.com. We've got some great videos up there and testimonials. So if you want to learn more about the company, you can reach out there. You can also shoot us an email at sales at bravotran.com. That's B-R-A-B-O-T-R-A-N dot com.
00:26:32
Speaker
And we'll make sure those links are in the show notes as well. Great. Perfect. And we hope to hear from you. If you're a free forwarder and you don't like dealing with payables, which I haven't met one that does. So that's an awesome place to wrap up again. Thank you so much for making the time today. All right. Thanks again to Tom for all of that insight. Again, I'm always amazed when I go into these interviews with how deep
00:26:58
Speaker
every individual topic can be in this industry and how complex whether it's you know the recent episodes talking about trade compliance or we're talking about payables automation where these things as tom said they seem simple right and then you get into them and they are incredibly complex topics with nuance and every one of them has fingers that reach out into other parts of the business into operations into the customer experience
00:27:26
Speaker
So I think this was just a fantastic example of that. Again, we'll have some links in the show notes where you can find more information about BravoTran and we're excited to work with them at Chain.io on some of their connectivity. So looking forward to talking to you next time on Supply Chain Connections.