Reviewers have to manually access these same spreadsheets, filter for their assigned tasks and complete each review one by one. This requires opening Salesforce, navigating to the opportunity, and downloading order forms, purchase orders and the master agreement, which often live within entirely different repositories. Out comes the spreadsheet again, with a 50 column review checklist for every document. Then the reviewer has to open the company’s internal accounting system to ensure all of the information matches up. They’ll also have to identify signature dates and make note of when revenue will be recognized, all the while checking the accounting system for matching dates and invoices. Once the review process is done and any necessary corrections are made, all of those supporting documents get saved into a shared folder where a second level reviewer opens them back up and conducts the entire process all over again.

Three to six months later, it’s interim audit time. The revenue accounting team sends its deferred revenue schedule and rev rec waterfall to the auditors, who filter that data and come back with 50 contracts they want to look at in more detail. Back we go to the folders again to open all of the supporting documents to validate that everything is accurate for all 50 contracts. The audit team comes back with questions on 25 of those contracts, and another round of in-depth review begins. Throughout all of these review processes, collaboration is conducted via email, Slack, text, by phone, in person – there is no efficient way to track the reasoning or context behind the accounting conclusions drawn.

If that sounds like a mind-numbing operational nightmare, that’s because it is. Before I joined Klarity, in fact, it’s what I did for a living for 15 years. We’re a company built by people who have suffered through this reality, understand its nuances and are intimately familiar with how profoundly it needs to be improved. It’s a ubiquitous problem across every enterprise in the world, and one practically begging to be solved by technology. That’s what we set out to do, and we have.

How we help

Klarity automatically identifies which contracts exceed your organization’s materiality threshold and require human review, and automatically conducts a standard review for contracts under the threshold. The system allocates those contracts to team members and notifies them when a contract enters their queue. The reviewer then simply accesses the Klarity system, where all of the relevant documents are already stored. Klarity reads and understands those documents the same way a human reviewer would, and automatically pre-populates your review checklist. This frees up the reviewer to simply sift through the relevant information and any flagged items, then record their accounting conclusions. That information is all still there for the second review cycle or any future audit that may be conducted. When level one review is marked done, the level two reviewer is automatically notified.

Klarity also becomes the system of record for contract review by including a history of notes, questions and clarifications conducted between reviewers. It’s a one stop shop for second level and audit review.

Just like that, a process of literally dozens of repeated steps is condensed down to a manageable few.