In this episode:
- 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!
Brian Glick 00:04
Welcome to supply chain connections. I'm Brian Glick, founder and CEO of Chain.io. On today's episode we're gonna go deep into the world of accounts payables, everybody's favorite topic. We've got Tom Durenberger from Bravo Tran. 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 are agents that everyone's getting paid? If that doesn't happen, we've all got nothing. So without further ado, here's the episode.
Brian Glick 00:42
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 will get into the wonderful world of Accounts Payable automation?
Tom Durrenberger 00:57
Yeah, sure. Happy to so my whole life prior to this, I was a consultant, 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, 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, Hunt Tran. And that was in cash. I took that job in early 2020. So right before the world kind of fell apart. I think it started the week before the NBA cancelled all their games. So it was 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 Tran, but it's up to you. And that's all I could say.
Brian Glick 01:56
So I want to ask you a question before we get into some of the stuff about Bravo train and all that. Yep. One of the great things about being consultant is you get to give the advice and leave. Yeah. What's the transition been like going from consultant to CEO and suddenly not being able to walk out the door if something doesn't work?
Tom Durrenberger 02:13
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 you know, the 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, jeez, how many people here are going to go into consulting, and they don't show the audience, but you can tell a bunch of people raising their hands. That's tough man. And he told them, you know, basically, you don't have to live with the decisions, right? When you're a consultant, you parachute in, you 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 to 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 get to eat your own dog food. Right. And that's just a fact of life.
Brian Glick 03:09
is 100%. True. And dog fooding is thing we talk about a lot here, chain, right? That it's, it's a hard thing to do. And why don't you tell everybody a little bit about what Bravo Tran does. And then and then I want to ask you about how you dog food.
Tom Durrenberger 03:23
Yeah. So bravo. Tran is the payables automation solution for freight forwarders. And because I've already mentioned it once, it's an spin out from another company called hub train. I'm training was the predecessor company, the distinction between hunt train and Bravo trends, basically, that uptrend served primarily domestic freight brokers for point to point trucking that are dealing with payables invoices from the truckers and Bravo trend, that company was sold to back in 2021. And Bravo trend provides a similar offering to freight forwarders. It's been redesigned specifically for freight forwarders. And 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.
Brian Glick 04:09
So in that world, right? How do you guys learn about your customer needs? In a world where it's clear, you're not moving freight? Right? So you're not eating your own dog food every day? It's, you know, and we have similar to a lot software companies have this challenge, but it's not software that you use. So how do you guys learn? How do you get
Tom Durrenberger 04:29
feedback? So in this particular case, you know, 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 experts in this one thing and this one thing is how to process payables invoices for freight forwarders. 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 missed something 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 broad trend carryover, and the approaches to how we, how we approach invoices carries over from the experience, the core team at Bravo train was also a hub transom. We've learned many things about what makes a good payables process.
Brian Glick 05:21
So why do one thing? All 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 lading. Why be so hyper specific.
Tom Durrenberger 05:36
So in this case, you know, this is, if 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 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 organising the work in a certain way. So yes, data extraction is performed. But then there's reconciling that against an 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 substitutes for that you can have, you can just offshore that Labour process, you can have somebody just send it to you in an Excel file. But those aren't. Even if you've got it in that way, you've only solved the very first part of the problem with a payables invoice. So that's why we focus on
Brian Glick 06:55
so coming out of consulting. Yeah, I'm gonna say something that's maybe off the top of my head here, maybe quitting a phrase, I might argue that software companies are the new business consultants. 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?
Tom Durrenberger 07:24
Yes, I have never quite crystallised 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 the invoices are coming into a single place so that they can be processed in a single process, as opposed to having things go to a bunch of different people or just go to a particular individuals inbox. And there it sits for a month until somebody calls you about it and wonders why they haven't been paid. So a lot of it does come down to implementing those best practices. And I suppose that that maybe speaks to how I wound up here or maybe stuck around doing it.
Brian Glick 08:03
Yeah, I'll say from, you know, the vantage point of chain IO. And, you know, we do lots of implementations alongside of lots of software companies, it's solving lots of different problems across the supply chain, the almost like universal predictor that I can see at the beginning of, you know, 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, you know, whether that's rate management software, whether that's, you know, invoice automation, whether that's visibility software, it's, you know, so many times they 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. Right? I mean, bad things happen.
Tom Durrenberger 08:57
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.
Brian Glick 09:11
Yeah. You know, it's funny that the tricky part in all of this and maybe I don't know if how much of this you want to share from you know, the magic pine, 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? It is. I don't know what your experience has been, as far as having to explain that either before or after someone signs that piece of paper. Well, so
Tom Durrenberger 09:34
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 and of how much our customers are using the product. So I think at least they're we've appropriately aligned incentives to make sure that's getting surfaced in an appropriate way. You know,
Brian Glick 09:52
that's actually really good. That's a very powerful way of getting around that problem. 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 realise, oh, wait, there's business process improvement that has to happen here. We don't just call it and magically, everything's better. I think people understand that better now, but 20 years ago, I've literally had to have those meetings with customers were okay, we're rolling out SAP, and we, you know, they people in the organisation would, you know, not have gotten the message that the idea is to use the software to do things differently, right, not to build enough modifications to the software to make it exactly the crappy process that you had before you had the software
Tom Durrenberger 10:39
that always became the those are just more consulting projects from my prior consulting partially implemented. New system. That was a good idea. That's just more money you can pay the consultants later on at is
Brian Glick 10:50
absolutely 100%. True. So you guys profit trend is have taken a path that is a smaller team, less aggressive marketing than, you know, 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, you know, even more upheaval, and Dave Clark leaving Flexport today in the light, kind of what's, what's the philosophy? And what's the theory behind the way you guys have chosen to approach growth?
Tom Durrenberger 11:22
Yeah, so we probably to a fault are focused on product first, we think we built the best mousetrap for this one specific thing. We have built the greatest product ever for handling freight forwarders payable invoices that has probably ever been invented by mankind. And we invested a lot in that we have a lot coming from uptrend, I'll say candidly, this is one of those cases where you know, 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 uptrend and bringing it to freight forwarders. But so, I mean, why 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. And we've just found that, again, we're solving something that is so specific, that everybody you know, 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 a small team, 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 you have to understand, you can't have all of the information distributed across a bunch of different people inside the company, how to implement the best payables process.
Brian Glick 12:47
what makes this fun for you
Tom Durrenberger 12:51
Honestly, I love sales. That's like one of the most fun thing, whenever I can get involved in sales, and we close a big deal. There's really no nothing quite like that, you know, I like negotiating, you know, like selling, and then somebody would be mad at me if I didn't say also, I love implementing new, great processes that are customer payables, which I do, it is actually rewarding to see that, hey, we had this problem before, it was really gnarly. rabbitry and made it a lot better. That's always really rewarding. You know, 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 just chugging on that stuff. That's great. You know,
Brian Glick 13:30
so explain that to me, because, you know, I think if you haven't spent a lot of time in the way that freight works, and do you think about payables? I used to say that when we would walk in the accounting department, you could tell the difference who was in payables and who was in receivables? Because receivables would sit by the window, because they always got the better desks. Right, because they were getting the money in and payables or sending the money out. Yeah. 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?
Tom Durrenberger 14:05
No, there's a couple of sources here. So the cost savings is straightforward, right? You're automating the payables process 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 streamline that process also. So it's time back for both the payables team and the operations team, which is great and important in kind of 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, you know, net 30 days or whatever the particular terms of that invoice happened to be. So if you're delaying sending out your receivables, invoices, you're just extending your cash cycle for no benefit in a industry with such slim margins is straightforward. And that's usually pretty meaningful. Beyond that, though, also, there's the fact that this makes the process much more visible. So pre Bravo Tran, oftentimes, it looks like freight forwarders are receiving invoices from a bunch of different places to a bunch of different places. There'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, 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 brava tray and putting the entire process inside Bravo training makes it much simpler and more visible so that actions can be taken appropriately.
Brian Glick 15:42
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, 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 your day to day managing the cash flow to freight forwarder, one, you are moving around a lot more money than you make, right? You're maybe paying two three or a couple years ago, $20,000 for a container, and you're really only making 100, or a couple 100 bucks on that. 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 US, right to just guess at what the price is you have to bill 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. And putting out money before they have the chance to take that money in on the receivable side.
Tom Durrenberger 16:40
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 that needs to be resolved.
Brian Glick 17:03
I personally experienced a company in my career where we were putting out literally 10s of millions of dollars a month in customs duties that had to move through along with the freight on a revenue of 10s of 1000s of dollars, right of our services. And you know, it was a large SAP shop and we had to fix the process, we acquired the company, but before us, they would sort of on the 25th day of the month, figure out what 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 right. 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 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, 10s of millions of dollars on again, 1000s of dollars of revenue. So it's a real problem become Yes, it is a problem. If you need me to give a testimonial to your customers. 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? What's not fun about being the CEO of a software company?
Tom Durrenberger 18:31
I suppose it's some of the stuff that you've described already, right? Where it's a partial implementation where you know, we implement the product, but customers never really get to the point of proper training is designed to be used has 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, like 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. They're a bunch of different stakeholders inside these organisations. Sometimes automation, candidly, can be a hard sell, because 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. We try to get to a different point.
Brian Glick 19:23
Where do you go when you have the best match track? 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? Yeah, you know, where do you find that inspiration are? You know, is there a point where the mousetrap is built?
Tom Durrenberger 19:52
I will 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, they tend to be single this gets into 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 they're mostly a solved problem. And there are little features, you know, customers will ask us, Hey, can you know, can this be a little bit more visible? Or can we have, you know, 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. 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. And we have this problem around agent invoices and needing to settle those up at the end of the month, it would be great. And by the way, we 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.
Brian Glick 21:13
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're just going, oh, man, I wish somebody was solving that problem for
Tom Durrenberger 21:23
our customers? Yeah, I've got kind of two things. One is, you know, so much that happens in this industry is because there is no standardisation. And there's just extreme fragmentation, right. 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. You know, that's something that we touch every day. But you know, standardising and systematising documents and standard, I mean, this will never happen. But from a pure process perspective, if you were looking at this, like an engineer, you'd 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 an 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 standardisation, that's required by automation in the customization that oftentimes customers want to have, or the many forwarders feel is required to serve certain types of shippers in, you know, put me down for kind of standardisation and automation. I think that's the way the world is going. It just makes for a better process.
Brian Glick 22:50
So I was at a freightwaves event a few years back, this is pre pandemic, you know, and there was, you know, a driver shortage, as there always seems to be a driver shortage is either too few or too many on any given day. Sure, sometimes not the same day, right. But there was a big topic about driver shortage and about being the customer of choice to the provider. Right now we have the shortest dwell times we pay you on time, so on and so forth.
Tom Durrenberger 23:17
It's a big deal for ocean carriers recently. Yeah. Yeah. All this stuff,
Brian Glick 23:21
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, right? If I'm paying Maersk on time or not, they're gonna be okay. Right? Like, they're not gonna go out of business tomorrow. 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?
Tom Durrenberger 23:46
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 customers, like you're on a team with this person now. And you need to make sure that you have a good working relationship with them, that you're paying them on time, the 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 more established, although not always, but more established trucking companies. And so I think it starts to look more like you know, we pay on time, everybody wants to be paid on time and the right amount. But I think in particular agent relationships are one where having a better relationship is very beneficial.
Brian Glick 24:44
So before we wrap up here, tell me a little bit about the culture in the company. What's just my personal favourite topic to ask about. So how do you describe your culture,
Tom Durrenberger 24:52
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 write 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, we're so small, and we're so you know, 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 trip more than anything else, it's focused, probably number one, and then number two kind of ownership. But I think those two things go hand in hand
Brian Glick 25:39
that just speaks so much to getting at the customer's problem, right and getting customer value. I mean, that's just fantastic to hear.
Tom Durrenberger 25:48
So you got to understand that all the way down. And we've talked about this before. But like, that's another advantage of being a point solution. Our sales guys have one thing in their back, right? 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 VoIP solution.
Brian Glick 26:12
Awesome. Well, why don't you tell everybody a little bit about where they can find Bravo train and how to get in touch if they're interested?
Tom Durrenberger 26:17
Sure, bravo. train.com. We've got some great videos up there and testimonial. 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 Bravo tran.com. That's b, r a b, oh, tra n.com.
Brian Glick 26:32
I will make sure those links are in the show notes as well. Yeah
Tom Durrenberger 26:35
great, perfect. And we hope to hear from you. If you're a freight forwarder. And you don't like dealing with payables, which haven't met one does, we can help you.
Brian Glick 26:42
So that's an awesome place to wrap up. Again. Thank you so much for making the time today. All right. Thanks, Brian. Thanks again to Tom for all of that insight. Again, I'm always amazed when I go into these interviews with how deep every individual topic can be in this industry, and how complex whether it's, you know, the recent episodes talking about trade compliance, where 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. 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 Bravo Tran, 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.