A Compliance Success Case

A Montreal consulting firm received a verification notice from Revenu Québec requesting documentation for three consecutive GST/QST filing periods. The firm had recently scaled quickly, hired new team members, and onboarded multiple clients but its bookkeeping had not kept pace. Missing receipts, inconsistent tax coding, and unreconciled bank accounts put the business at serious risk of a full audit.

With only 30 days to respond, the firm turned to Mackisen.
What happened next transformed a potential compliance crisis into a clean, audit-ready victory.

The Situation: Growth Without Bookkeeping Structure

The consulting firm faced:
• incomplete bookkeeping for several months
• missing supplier invoices
• GST/QST tax codes applied inconsistently
• deposits that didn’t match sales invoices
• reimbursable expenses mixed with business expenses
• digital subscription receipts not properly saved
• GST/QST refunds frozen pending review

The verification notice demanded:
• detailed ITC/ITR schedules
• proof of payment for each expense
• bank reconciliations
• sales summaries and contracts
• supplier tax registration numbers
• explanations for all discrepancies

Step 1 — Rapid Cleanup and Reconstruction

Mackisen immediately deployed a cleanup plan:
• categorized and reconciled hundreds of transactions
• downloaded and organized missing invoices
• rebuilt sales and revenue schedules
• clarified reimbursable vs. firm expenses
• corrected duplicated entries
• matched deposits to invoices line by line

Within two weeks, the books were fully rebuilt and accurate.

Step 2 — Fixing GST/QST Coding Errors

The firm’s accounting system had:
• GST-only applied to QST-required expenses
• tax-inclusive entries that distorted reporting
• inconsistent coding for digital services
• personal expenses classified as business items

Mackisen standardized all tax codes and recalculated GST/QST for each period.

Step 3 — Preparing an Audit-Ready Documentation Package

The CPA team assembled:
• complete ITC and ITR support binders
• indexed invoice folders
• proof-of-payment documents
• contract files for major clients
• reconciled bank statements
• spreadsheets demonstrating correct GST/QST calculations

Every piece of documentation matched the corrected filings perfectly.

Step 4 — Taking Over Communication With Revenu Québec

Mackisen handled all interaction with the auditor:
• answered questions clearly and professionally
• justified every ITC/ITR with documentation
• provided reconciliations for all deposits
• explained growth-related bookkeeping delays
• demonstrated corrective measures already in place

The auditor quickly gained confidence in the corrected records.

The Outcome

The verification closed with:
• zero adjustments
• no penalties
• frozen refunds immediately released
• no escalation to audit
• tax accounts fully restored to good standing

The firm’s compliance risk dropped dramatically.

Key Lessons

• Rapid growth often leads to bookkeeping gaps, but they can be fixed
• Documentation must match filings to avoid refund delays
• Professional cleanup transforms messy books into audit-ready records
• A CPA-led response reduces stress and prevents escalation
• Proactive corrections make an excellent impression on auditors

Client Quote

“We were overwhelmed. Mackisen rebuilt everything in a few weeks and made the verification disappear. We are now completely audit ready.”

Common Questions

Can a consulting firm be audited even with little expenses?
Yes service firms get audited for documentation consistency, not just expense volume.

Are digital services taxable?
Generally yes and must be coded correctly.

Can frozen refunds be recovered?
Yes once support documentation is complete and accurate.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps consulting firms stay compliant, audit-ready, and confident even during periods of rapid growth.