Building Trust in B2B Trade Agreements with Nick Rose of Enable
Welcome to an insightful episode of PayPod, the hub of insights into the world of payments and fintech. In this episode, we unravel the complexities of B2B trading agreements and rebates, exploring how technological innovation is reshaping the landscape. Join us for an in-depth conversation with Nick Rose, the CFO at Enable, a SaaS platform revolutionizing B2B rebate management.
Lessons You’ll Learn:
Listeners can gain insights into the significance the pivotal role of technology in reshaping B2B transactions as Nick Rose provides key insights. Learn about the challenges companies face in managing intricate rebate agreements and why traditional tools like Excel fall short. Uncover how Enable’s SaaS platform is transforming the landscape, fostering collaboration, and enhancing efficiency between trading partners.
About Our Guest:
Nick Rose, the Chief Financial Officer at Enable, brings a wealth of experience in the finance sector. As a former customer turned executive, he shares firsthand insights into the challenges faced by businesses in managing rebate agreements and the transformative impact of Enable’s platform. With a focus on strategic business advising, Nick reflects on the changing role of CFOs in navigating the complexities of finance, technology, and global expansion.
The episode covers a range of topics, including the fundamental concepts of rebates and trade agreements in B2B relationships, the historical challenges of managing complex deals, and the pivotal role played by Enable in revolutionizing rebate management. Nick Rose elaborates on the changing nature of CFO roles, emphasizing the shift towards strategic business advising. The discussion also touches on the recent Series D funding round, valuing Enable at 1.2 billion, and the company’s growth trajectory, aiming to become a market leader in a unique fintech category.
Nick Rose- A Visionary Leader in B2B Trade
Nick Rose, the esteemed Chief Financial Officer at Enable, has recently taken the helm to spearhead the company’s rapid expansion in the realm of cloud-based B2B deal management software. With a distinguished 16-year tenure at Travis Perkins plc, a leading U.K.-based building materials wholesaler, Rose brings a wealth of experience garnered through various finance director and transformation programme director roles. Notably, Travis Perkins was among the earliest adopters of Enable’s deal management software platform, and Rose actively contributed to its development.
His firsthand experience in implementing Enable’s solution across the Travis Perkins Group underscores his deep appreciation for the platform’s capability to navigate complex trading agreements. Rose expressed his excitement about joining Enable, citing the genuine need for such software in the B2B sector. His role as CFO includes a pivotal responsibility in scaling Enable’s business in North America, a testament to his strategic vision and leadership.
In his dynamic career, Rose has proven his mettle in finance and business transformation, corporate finance, business development, and strategic and financial planning. His multifaceted expertise positions him as a valuable asset to Enable, steering the company toward global success. Rose’s unique perspective as someone who has chosen, bought, and implemented Enable’s solutions provides an invaluable customer-centric approach to the company’s high-growth trajectory.
As Enable continues to attract prominent clients like Affiliated Distributors and Wolseley Canada, Rose’s experience, drive, and commercial acumen will undoubtedly play a pivotal role in bringing Enable’s cutting-edge software to a broader global market. Join us as we delve deeper into Nick Rose’s insights and contributions to the transformative journey of Enable in this episode.Join us for a thought-provoking discussion on the challenges faced by companies in managing trading agreements, the limitations of traditional tools, and the revolutionary impact of Enable’s platform on streamlining and optimizing B2B transactions.
Nick Rose: As trade gets bigger, more complex, you have hundreds of suppliers. Understanding those trading agreements, actually making sense of them and making them work, and getting real insight into how they’re performing suddenly becomes a job that Excel can’t handle. And what we find is most companies out there are using Excel to handle their most complex rebate agreements, simply because ERP solutions are not set up to achieve that. So, we implemented a label, and the sales and purchasing teams started spending more of their time negotiating a mutually beneficial deal with their trading partner. Rather than arguing over disputes and discrepancies in the data.
Jacob Hollabaugh: Welcome to PayPod, the payments industry podcast. Each week, we’ll bring you in-depth conversations with leaders who are shaping the payments and fintech world. From payment processing to risk management, and from new technology to entirely new payment types. If you want to know what’s happening in the world of fintech and payments, you’re in the right place. Hello everyone, and welcome to PayPod. I’m your host, Jacob Hollabaugh, and today on the show, we’re going to be discussing rebates and trade agreements in the B2B world, how better financial data can drive these agreements and the supply chain they are a part of, to more success and a bunch more topics related to those. As always, I’ve got an expert in these areas here with me. I’m pleased to be joined today by Nick Rose, CFO at Enable, the Saas platform for B2B rebate Management. Nick, welcome to the show. Thank you so much for joining me today.
Nick Rose: Thank you Jacob, it’s great to be here.
Jacob Hollabaugh: Yes, the pleasure is mine. Before we dive into Enable itself and some specific industry topics, let’s make sure we’re all on the same page and have a lay of the land of the industry that we’re talking about. So, as an overview, can you just lay out what are rebates or trade agreements, what industries are using these the most? And then can you give an example of maybe how they traditionally worked before folks like yourself had Enable came around to hopefully improve the process?
Nick Rose: Of course. So, trading agreements exist in pretty well every business-to-business relationship in the world. So, there’s always a seller, always a customer. They’re selling products to customers. We’re two businesses do that, there’s a trading agreement. If you’re making widgets as a manufacturer and you’re selling them to your distributor, or customer, there’s going to be a set price, there’s going to be a way that you have to order them, there’s going to be minimum quantities, there’s going to be quality control and lots of attributes in that trading agreement. What there is in most trading agreements as well is some kind of financial incentive to drive the purchases or sales, depending on which side of the coin you sit. So, if you’re the manufacturer, you’re making your sales, you’re going to want to incentivize your customers to buy more from you. If you’re the customer, then you’re looking at those incentives saying, well, I probably should direct more of my share of wallet for that particular widget to manufacture ‘A’ because I’m getting a better deal vs manufacturer ‘B’. And where those deals happen, the phenomenon of rebates comes about. The way we look at rebates at Enable is normally in a purchasing situation, the customer is paying money to the supplier, that’s pretty obvious. We define a rebate as any transaction where the money flows back the other way. The manufacturer or supplier will pay money back to the customer, based on the customer achieving certain. And those targets could be volume-based, could be taking on new product lines, could be opening new outlets, whatever it might be. So, there are lots of different ways that money can flow and the money may be called a rebate, it may be called commissions, it may be called claims, could be called contracting support. But whatever happens, it boils down to the money flows back the other way. So, we call that a rebate just for simplicity and to make terminology standard across the whole piece. Those rebate deals, the rebate element in deals have got hideously complicated over the years. You can imagine the kind of start point of them is really simple. I will sell you ten of these computer mice and you’ll pay me $2 for each one. But if you buy 100 of them, I’m going to give you $0.10 back on each one. That’s in the form of a rebate, you get it after you hit your target. So, incentivizes your behavior to send your purchasing my way. And you distinguish them from a discount because discounts don’t have to be earned, you didn’t have to hit a target to hit to gain a discount. You get it and you’re on an upfront price and what we see there is.
Jacob Hollabaugh: There’s no money coming back then.
Nick Rose: There’s no money coming back. So discounts are easy to give and quickly forgotten. Don’t drive the behavior that rebates are designed to drive. As obviously, trade gets bigger, more complex. You have hundreds of suppliers, tens and tens of thousands of different products you might have in your range. Understanding those trading agreements and actually making sense of them and making them work and getting real insight into how they’re performing suddenly becomes a job that Excel can’t handle. What we find is most companies out there are using Excel to handle their most complex rebate agreements, simply because ERP solutions are not set up to achieve that. And an average ERP solution will do a simple rebate transaction, with no problem. But as soon as you start layering on complexity and adding different targets and product inclusions, exclusions that you might have location, inclusions, exclusions, lots of different levels and layers. The ERP simply can’t do that. That’s where Enable really started is think that as a particular problem. And I was actually one of the first customers of Enable at my previous employer, which is a building materials distributor in the UK. We had over £1 billion worth of rebate income from our suppliers, and we were struggling to make that really clear insight happen across the businesses. My team was responsible for calculating it, accruing it, and putting all the accounting together. When we got asked questions about why is that number, and what it is, it’s very difficult to answer them with any kind of convincing data or facts. Because it was all lost in the realms of Excel and you couldn’t understand it properly. So, we implemented Enable and the almost the rest is kind of history. So it started getting great insights. The sales and purchasing teams started spending more of their time negotiating a better deal and a mutually beneficial deal with their trading partner. Rather than arguing over disputes and and discrepancies in the data. It cleaned it all up really well, that’s the pain point that we we solved with Enable all the way from the original deal negotiation. So instead of being a Word document and the whole deal being negotiated offline on Word, PDFs, signed, that’s all fine. But then some financial analyst usually has to pick up that document, decipher it, understand what its intent really is, and program that into an Excel spreadsheet and hope that it all works. Actually, what we do now is negotiate the whole agreement within the solution. Then everything lines up perfectly because the solution can see all the details.
Jacob Hollabaugh: Yeah, it’s a fascinating story. I always love hearing someone that’s made the jump you did of I was working somewhere and came across this company that made the job. I was doing so easy, and I was so blown away that eventually I found my way over to this company that I found so amazing. And I also the me ten years ago or can’t imagine the day where Excel finally, the potential of Excel finally taps out a little bit, but we have. I think you’re not the only one and this isn’t the only industry that is finally reached the edges of Excel’s abilities. Absolutely amazing product for a very long time. It still is, but the limitations have finally been reached. So you did mention, though, there are a lot of new complexities. What are some of the complexities that were added in over the last decade or so? There’s lots in the digital age that across pretty much everyone we talk to talks about the complexity of everything in the financial world and the data world expanding in the last decade or so. What have been some of those new complexities that came in that made those pain points even bigger and more of an opportunity for a company like Enable?
Nick Rose: Yeah, I think the key ones probably are the pace of change. The way companies want to work now is being nimble, being very proactive, and setting their trading agreements and their targets. And Excel just can’t keep up with that, because you have to go back all the way to basics to to put something new in and calculate it from the ground up again. So there’s that side of it. I think the volume of data, as well as just many times, increased over the last few years. Again, you need a different solution to handle big volumes of data, even if you’re a small business. And I think the part is just the opportunity to work out on what tweaks you can do to different elements of a deal to drive the behavior that you want and to win more of your customers’ spending power. Those things, I think, lend itself to a solution that’s a lot more flexible and a lot more real-time and able to user interface and everything around that is so much better than using a spreadsheet. And the other advantage now is that suppliers and customers can actually collaborate inside a platform. They both have a login, and they’re both looking same set of data. And that takes some of that complexity.
Jacob Hollabaugh: Yeah. Data we’ve used that word a lot already. And it’s not the first episode of the paper. That data is used a lot. It’s the name of the game pretty much across commerce at this point. Certainly, with a company like Enable and many others that we’ve spoken to on paper, better data collection, management, analysis, and implementation, are what drive progress. And with Enable, you just mentioned getting both sides of the agreement to work off the same data sets where previously, if they’re not unified in one platform, they’re passing things back and forth. There maybe Polling data from different sources, so getting them to look at the same one is very important for what you do. Is that as simple as just connecting them on the one platform together? Or are you then also having to ask them to collect from new areas, capture data from new areas? How does getting them together in that unified set of data work?
Nick Rose: Well, everyone’s aiming, I guess, for one version of the truth, if you can, get that kind of both sides of the same data set, that’s critically important. And If you can’t achieve that, you’re always going to be mired down in disputes and discrepancies. But they connecting the two sides in one platform is a step on the way. Getting them then to view the details in the same direction. There’s a confidentiality piece as well, where one side may not want to share some data with the other side, no matter which way round your relationship is, you might want to hide from your suppliers what true margin you make when you sell their product. That’s a bit where if that data got out into a market, then it could damage a business. So that’s that’s fair enough. But getting that data captured, there’s nothing special about that. We want to try and make sure the data is as clean as possible. But also it’s, we do file transfer on a batch basis, usually overnight with ERP systems picking up purchases, and sales stock data. We’ll look at pricing data as well, you know that just comes in. The machine then calculates what the trading agreement should give you. So I think people get very worried about “How do I get hold of the data?” Really my view is just to make sure the data has got the right attributes and it’s as clean as possible, and actually then extracting data from a solution, in a clean way can be less complicated. It should be easier to achieve.
Jacob Hollabaugh: Yeah, love that. This is the core focus of this podcast with the name PayPod, obviously, is the payments world really in particular. So I’ve got to ask one kind of payments-related question, which is your platform dealing with as we described, rebates, the big difference between discounts and rebates? The rebates are where money is actually coming back. So we’re transferring funds multiple times. Here, is your platform changing the way payments are made or how or when money is routed in any way to improve or create more efficiencies for within these agreements and for these companies?
Nick Rose: The actual act of payment is not something we’ve got a capability for just yet. We have talked about it, it’s on the what I call longer-term roadmap is something we’d like to do because as soon as you can settle the deal, you can bring that in as a bit more of a one-stop shop for our customers, and it is something some of them have asked for. It’s not the loudest request by a long way at the moment. That tends to be around extra functionality that might help them do a particular type of trading or whatever. So I think there’s intent to do that when we get there, we might do it through a partner. We might rather than build it ourselves because it’s a very different tech to the tech out. So I think there’s an opportunity there for sure. We don’t want to necessarily do something that we’re not experts at in-house.
Jacob Hollabaugh: Well, thankfully there are quite a few people I can think of former guests and whatnot that would be happy to work with you on that if you do get there, but that makes total sense. That would be a list of ancillary. Once we get the core thing down, how can we continue to build out? One of the other things I wanted to ask you about is the word trust. Trust is a word used a lot across your website, and your offerings is definitely a word that comes up on the show a lot when we talk to a lot of as service companies that are working with so many partners, integrations, etc. How do you build and maintain trust among partners in this ever-expanding supply chain in the financial industry, etc.? How do you build that trust and then maintain that trust with so many partners and so many companies that you’re working with?
Nick Rose: So I suppose there are two ways, two answers to that. There’s trust between our customers and their trading partners. And the historic, traditional way of doing a deal is you’re almost like the deck of cards, and you’re holding it back like this and go, oh, I don’t think I can negotiate that turn, but I’ll give you this instead. It’s not an open book way of trading, and open book has become a bit of a thing where there’s absolute trust in terms of let’s deliver that, let’s agree what returns we’re going to make between us, and let’s lock that in. You can do that through an open-book method. So in reality where I see businesses is where they should be is somewhere in between. The further you get towards that open book, the more trust you’re demonstrating, but what does that give you? It gives you more consistency, more predictability thats the impact your decisions might make on your trading partners’ business. And you can understand why they might not want you to do. Things. All I want is to go down a certain route. So, I think the more open you can be, the better. By far the better. How is that actually happening through our software? Well, we actually have a search. We’ve got a customer who says their suppliers are trading with them. Their suppliers will have a free-of-charge login to the enabled platform. They’ll be able to see the deal, see the data that our customer chooses to show them. It’s all configurable. And they’ll also sign off the trading agreement inside the platform so they’ll get a login, do your kind of DocuSign-esque T’s and C’s, and they’ll then be away at trading. So we actually expose some of the trading details to both sides of the equation, not just our customer, but their trading partner as well. I think the other bit we’ve trust is as a software company, our all of our products are in the cloud. We’re fully off-platform and everything our customers trust us with really important data as they’re trading agreements are sometimes referred to them as a Brit, as the crown jewels in terms of the secret source that makes their business special and different to other businesses. So we have to have absolute clear security in place we’ve got credentials that show that we take it seriously, and we keep reviewing it, and we have the right processes to protect our customers’ data. Without that element of trust, we wouldn’t have a business. And so really important to bring that one out as well.
Jacob Hollabaugh: Yeah, I love that. It makes sense. Now that word would be used a lot across your site and marketing and everything because in the end you more or less that’s what you’re doing for the each side of those agreements is building trust between the two sides to actually be able to work together in a better manner. Another high-level question that I was really interested in. I saw you had a LinkedIn post about, I think it was maybe a month or so ago that piqued my interest, because it’s a topic that’s come up a few times with some recent guests on this show, but never for the CFO role, which your post was about the changing nature of the role of a CFO in a company. And we’ve had CTOs explain this similar thing, recently, we’ve had CMOs explain this, but I hadn’t ever approached it from the CFO’s point of view. So referring back to that post you had made, could you give an example or two of how you think the role of a CFO has changed in recent years, or what the new key skill set would be for a modern CFO in 2023, working in a Saas environment or a financial environment? Tech environment?
Nick Rose: Yeah, I suppose I’d probably start by approaching that from a whole finance function point of view. So the traditional old-school role of finance was basically keeping score and telling a company how they’ve done in the past and maybe doing a little bit of budgeting. That’s table stakes. Now. I think for finance it’s expected we have to do the set of accounts. We have to say what we did, and what our balances were, make it all auditable, and stack up where I think everything is going now and the CFO is obviously the figurehead for this is being a strategic business advisor. They’re almost a right hand to the CEO and the board in terms of the plans you’re putting together. This is the financial position, we can afford it or we can’t afford it. We’ve got sources of funds so we can afford to spend that. And that whole insight into what the business, what direction the business should be taking has a big financial angle on it. And that’s the role that the CFO now makes. I think there’s an awful lot in my role now. I cover a lot of legal stuff, a lot of property stuff, a lot of people-related things, and you have to be much more of a generalist, I think, than a pure play kind of accountant anymore. I wouldn’t hold myself out to be a full-time accountant. I do lots of other things as well.
Jacob Hollabaugh: For sure. I think that rings similar to some of the conversations we had before about the different C-suite levels that it’s become much more of a kind of egalitarian as far as decision-making, and who can actually turn the knobs to build efficiencies, and find success. It’s not just I’m relaying my little part of the company, and the CEO is driving all the things that maybe 20 years ago, was all the decision-making coming from a CEO or the board. Now, it’s much more spread out, it’s being able to say, here’s where we not just reporting from my area, but here’s how we can change some things to drive business drive success in the lot. So, my final question for you then is what’s next for Enable? I did see recently you raised your series D funding round that valued the company at 1.2 billion. So, congrats on that. That’s a big achievement to continue to get the funding and increase those valuations. What are the next steps to put that funding to use? What are the short-term goals next 3 to 5 years, the next big objectives for the company?
Nick Rose: So, the point of raising funding for us is so we can invest in the country and in terms of our products, building our teams out and making sure our functionality is holistic and hitting all the pain points. So we’re trying to solve, but we can do that much faster than we could do otherwise from our own cash generation. We are deliberately a loss-making business as we scale. And the challenge, I suppose that’s ahead is showing a pathway to switch that to profitability. Once we’ve hit certain scale, size, sales number, whatever measure we choose to use. What’s next? We’ll continue to aim to grow very fast. We’ve just in terms of number of people, we had about 55 people when I joined four and a bit years ago, and we’re going to go through 600 people probably next month. It’s growing fast and we’ve grown globally. So I joined it was just the UK. We’ve got a big presence in the US now, Canada, Australia and we’re growing back from that perspective as well. So that’s the other source of spending is getting building a category for our product because one doesn’t really exist at the moment. It’s a fairly unloved fintech area, but one that can create great value for our customers. So the next steps, ultimately, we want to have that, be the market leader in a category that drives value through the supply chain to do that, that’s our absolute goal and help trades, relationships between buyers and sellers be more trusted, be smoother, and take the friction out. And that’s our kind of reason for being here. At some point, we will raise more money and keep growing from that perspective, at some point, we may become a public company and use that as a source of funds instead. That’s that’ll be a nice stepping stone on the way to achieving a new category.
Jacob Hollabaugh: Yeah, I love it. And it’s definitely a challenging place to be obviously if you’re creating a brand new category, but once you show proof of concept, it’s an incredible place to be, an incredible opportunity to have done that. And I think so far you’ve definitely proven to that the category should have existed and now does exist thanks to you. And I have no doubts you’ll continue to be the leaders of it, whether a bunch more follow or not. Nick, this has been a real pleasure for those listening who may want to learn more about Enable, learn more about you, and follow you. Keep up with everything you or the company have going on. Where would be the best place for them to go to do so?
Nick Rose: Our website first off enable.com, you can find out lots about us there, including what we do, some customer stories, short videos of our products, that sort of thing. You can also find me on LinkedIn and if you’ve got specific questions, I can point you in the right direction of course.
Jacob Hollabaugh: Lovely. We will link to those and more in the show notes below. Nick, thank you so much for your time and knowledge today. I’ve greatly enjoyed it and hope to speak again sometime soon.
Nick Rose: Thank you Jacob, been a pleasure.
Jacob Hollabaugh: If you enjoyed this episode and want to hear more, head on over to soarpay.com/podcast to subscribe on your podcast listening platform of choice. That’s soarpay.com/podcast.