Photo by Doran Erickson on Unsplash

Customer Success Story: Optimizely

Automating the Review of Contracts for ASC 606 RevRec

We’re a lean finance department, so our revenue team needs to be super efficient at what they do. We’re fortunate to have brought on Klarity to help streamline our revenue processes.

Sean Deorsey, Chief Financial Officer

Executive Summary

Optimizely built the leading progressive delivery and experimentation platform enabling thousands of companies around the world to optimize their customer experience through a/b testing, feature flagging, and personalization tools. Optimizely is using Klarity to streamline the ASC 606 sales contract review process and automate the population of a custom non-standard terms checklist for 300+ contracts each quarter.

The Challenge

For a mid-size company with significant growth potential, ASC 606 compliance could be costly and challenging. For Optimizely, this meant an ever-increasing number of sales contracts and order forms that needed to be appropriately reviewed to recognize revenue under ASC 606 guidelines. They struggled with a lengthy, manual contract review process resulting in organizational inefficiencies as they lacked a centralized workflow that could help ensure completeness in the review process and compliance with accounting standards.

Optimizely built the leading progressive delivery and experimentation platform enabling thousands of companies around the world to optimize their customer experience through a/b testing, feature flagging, and personalization tools.

The Solution

Optimizely integrated Klarity’s contract review software into their workflow. Klarity automatically pulls contracts from Optimizely’s contract management system, removing the need for manual data transfer. Through automatically identifying contracts with non- standard terms, Klarity better identifies the population of contracts for Optimizely to review. Klarity automatically populates Optimizely’s custom non-standard terms checklist for each contract by automatically extracting all information and metadata. Ultimately, this streamlines the review process for Optimizely’s revenue accountants, ensures that each contract goes through the requisite review steps, and helps to ensure compliance with ASC 606 revenue recognition guidelines. With Klarity, Optimizely is now able to review revenue contracts 3x as fast as before and hold greater confidence in their internal controls.

Photo by Olav Ahrens Røtne on Unsplash

Introduction

Optimizely is a global software company with over 400 employees and provides the leading progressive delivery and experimentation platform to thousands of companies around the world. Its technology allows teams to optimize their customer experience through a/b testing, feature flagging, and personalization tools.

The Challenge

Optimizely is a mid-size high-growth company, which inevitably leads to a significant number of sales contracts that its small revenue accounting team needs to review post-signature in order to recognize revenue.

At the end of each month, Optimizely reviews all newly signed contracts, including Master Service Agreements, Order Forms, Statements of Work, and Service Level Agreements, to identify non-standard terms under Optimizely’s ASC 606 non-standard terms checklist and determine whether these terms have an accounting impact.

300+ contracts reviewed in each quarter

Their previous contract review workflow consisted of the following steps:

  1. The Revenue Recognition Manager pulled the list of all contracts with their non- standard terms from salesforce which had been populated by Optimizely’s deal desk team.
  2. He read through all contracts and filled in a non-standard terms checklist in a spreadsheet for each contract in order to confirm the accuracy of the non-standard terms identified.
  3. After reviewing all of the contracts, he made manual adjustments to revenue schedules in the company’s enterprise resource planning (ERP) system where necessary.

This workflow process had significant shortcomings.

  • The review process was inefficient. The review process itself was an entirely manual process in which the Revenue Recognition Manager read through every contract in entirety. A revenue accountant was able to review only ~30 contracts on a given day.
  • Review was prone to human error. Because the process was incredibly manual and repetitive, there was the risk that a contract would not be reviewed appropriately and according to accounting standards. Any attempts to accelerate the review process would always run the risk of revenue misstatement under ASC 606 standards.
  • The workflow was frustrating and ill-designed. Communication between team members in the review process was difficult, as the contracts, non-standard terms checklist, and email all existed on separate platforms.

With Klarity, Optimizely is now able to review revenue contracts 3x as fast as before and hold greater confidence in their internal controls.

Photo by Perry Grone on Unsplash

The Solution

Optimizely engaged Klarity to integrate its workflow management software and artificial intelligence capabilities into their sales contract review process.

3x faster than manual contract review

With Klarity, their contract review process is significantly more efficient.

  • Klarity’s software automatically pulls sales contracts from their contract management system before closing the books each month.
  • Klarity’s artificial intelligence automatically extracts all metadata and clauses from the contract and uses this information to pre-populate Optimizely’s non-standard terms checklist.
  • Klarity’s workflow management tools ensure completeness in the review process as it tracks and securely stores all documentation and comments corresponding to each item on the non-standard terms checklist for each contract.
  • Klarity’s workflow management tools ensure completeness in the review process as it tracks and securely stores all documentation and comments corresponding to each item on the non-standard terms checklist for each contract.

Klarity automates one of the most time-consuming parts of my job — reviewing contracts with customers under ASC 606 and our non-standard terms checklist. I have more time to deliver value to my team in more meaningful ways.

Barrett Wilkowski, Revenue Recognition Manager

Klarity’s platform facilitated the review of 342 contracts during a quarter, allowing the revenue recognition manager to review contracts 3x as fast as before.

Contact us!

Visit as at tryklarity.com to learn more about the present and future of document review automation!

Our mission is to empower teams by automating the review of contracts and other documents.

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Klarity

Klarity

Our mission is to empower teams by automating the review of contracts and other documents.

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