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ASC 606 Compliance on Autopilot: The Serverless Ledger Playbook

Drowning in spreadsheets to manage deferred revenue for your D2C subscription business? Manual tracking isn't just time-consuming—it's a recipe for costly errors. Incorrectly recognizing revenue violates accounting standards like ASC 606, skews your MRR, and leads to non-compliant financial reports. As you scale, managing promotions, refunds, and plan changes makes this manual process completely unmanageable.

The Serverless Ledger is an ultra-lean, cost-effective solution that automates your entire revenue recognition workflow. Built on a serverless architecture, you pay only for what you use, eliminating expensive, idle servers. When a new payment occurs in Shopify, a cloud function instantly calculates the correct revenue schedules and stores them in a high-performance NoSQL database. A scheduled job then automatically posts accurate monthly summaries to Xero, ensuring your books are always compliant and up-to-date without manual intervention.

Expected Outcomes

  • Achieve full compliance with ASC 606 and other accrual accounting standards.
  • Eliminate tedious hours of manual spreadsheet reconciliation and reduce human error.
  • Gain accurate, real-time visibility into key metrics like MRR and deferred revenue.
  • Drastically reduce infrastructure costs by adopting a pay-per-use serverless model.

Core Tools in This Stack

AWS Lambda

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AWS Lambda is a serverless, event-driven compute service that lets you run code for virtually any type of application or backend service without provisioning or managing servers.

Key Features
  • Event-driven code execution
  • Automatic scaling
  • Pay-per-use pricing model
  • Support for multiple programming languages (Node.js, Python, Java, Go, etc.)
  • Deep integration with other AWS services
  • Support for deploying functions as container images
  • Provisioned Concurrency for low-latency applications
  • Lambda Extensions for integrating with monitoring and security tools
Ideal For

Company Size: Micro, Small, Medium, Large

Industries: Technology & Software, Business & Professional Services, Retail & E-commerce, Creative & Media, Education & Non-Profit, Health & Wellness, Other

Pricing

Model: Free Tier, Pay-per-use

Tier: Pay-as-you-go

Ease of Use

Moderate

Amazon DynamoDB

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A fully managed, serverless, key-value and document NoSQL database designed to run high-performance applications at any scale, offering single-digit millisecond performance.

Key Features
  • Single-digit millisecond performance at any scale
  • Serverless architecture with no servers to manage
  • Global tables for building multi-region, multi-active applications
  • Built-in security with encryption at rest and identity and access management
  • On-demand and provisioned capacity modes for cost optimization
  • Support for both key-value and document data models
  • ACID transactions support across multiple tables
  • Automated backup and restore capabilities
Ideal For

Company Size: Micro, Small, Medium, Large

Industries: Technology & Software, Business & Professional Services, Retail & E-commerce, Creative & Media, Health & Wellness, Other

Pricing

Model: Free Tier, Pay-as-you-go

Tier: Pay-as-you-go

Ease of Use

Medium

Xero

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Xero is an online accounting software platform for small and growing businesses. It allows users to manage invoicing, bank reconciliation, bookkeeping, payroll, and more from any device.

Key Features
  • Invoicing & Quoting
  • Bank Reconciliation
  • Expense Management
  • Payroll Integration (with Gusto)
  • Project Cost & Time Tracking
  • Financial Reporting
  • Inventory Management
  • Purchase Orders
Ideal For

Company Size: Micro, Small, Medium

Industries: Technology & Software, Business & Professional Services, Retail & E-commerce, Creative & Media, Education & Non-Profit, Health & Wellness, Other

Pricing

Model: Subscription

Tier: Mid-Range

Ease of Use

User-Friendly

The Workflow

graph TD subgraph "The Serverless Ledger" direction LR N0["AWS Lambda"] N1["Amazon DynamoDB"] N2["Xero"] N0 -- "Checks for duplicate order" --> N1 N0 -- "Creates sales invoice" --> N2 N0 -- "Records new Invoice ID" --> N1 end classDef blue fill:#3498db,stroke:#2980b9,stroke-width:2px,color:#fff; classDef green fill:#2ecc71,stroke:#27ae60,stroke-width:2px,color:#fff; classDef orange fill:#f39c12,stroke:#d35400,stroke-width:2px,color:#fff; class N0 blue; class N1 blue; class N2 blue;

Integration Logic

  • LedgerFlow for Shopify

    This integration is triggered by a Shopify 'Order Creation' webhook. The webhook sends the order payload to an AWS API Gateway endpoint, which invokes an AWS Lambda function. The Lambda function first checks an Amazon DynamoDB table to ensure the order hasn't been processed before, preventing duplicates. It then parses the order data, including customer details, line items, taxes, and shipping. Using the Xero API, the function creates a corresponding sales invoice in Xero, mapping Shopify products to the correct Xero accounts. Upon successful creation, the Lambda function records the Shopify Order ID and the new Xero Invoice ID in the DynamoDB table for logging, tracking, and future reference.

Automate Your ASC 606 Compliance

Ditch error-prone spreadsheets and learn to automatically manage deferred revenue for a clear, compliant view of your MRR.