Cash Flow Management

Many profitable businesses go bankrupt because they run out of cash. Profit on paper doesn’t mean liquidity in practice. Cash flow management is the discipline that keeps your business alive, ensuring money moves when it’s needed most. Mackisen CPA Auditors Montreal helps Canadian businesses understand, forecast, and control their cash flow with CPA-verified systems that prevent financial surprises and strengthen CRA compliance.

Legal and Regulatory Framework
Income Tax Act (Canada) Section 230(1): Requires complete financial records to verify solvency and liquidity.
CRA Policy IC78-10R5: Recognizes cash flow statements as key documentation for financial audits.
Taxation Act (Quebec) Section 34: Requires records of inflows and outflows for QST compliance.
CPA Canada Handbook Section 1540: Defines standards for preparing cash flow statements.
Financial Administration Act (Quebec): Mandates that all businesses maintain accessible liquidity records.

Key Court Decisions
Beaudoin v. The Queen (2020): Upheld reassessment where cash records did not support reported profits.
Lincora Group v. Quebec (2019): Confirmed penalties for mismatched inflow and expense documentation.
Tremblay Holdings v. The Queen (2021): Recognized the importance of accurate cash flow forecasting.
Simard Beaudry Construction v. Canada (2019): Accepted CPA-prepared liquidity statements as audit evidence.
Royal Bank v. Canada (2019): Denied financing due to poor cash flow documentation.

Why CRA Targets / Issues / Enforces
CRA uses cash flow analysis to detect undeclared income and tax discrepancies. If your bank balances, sales, and expense records don’t align, it signals possible misreporting. Mackisen CPA Auditors Montreal implements monitoring systems that reconcile cash inflows, GST/QST filings, and vendor payments, ensuring transparent and consistent records.

Mackisen Strategy
Cash Flow Forecasting — Project cash needs monthly or quarterly.
Expense Scheduling — Time vendor and payroll payments efficiently.
Receivable Optimization — Shorten collection periods through better invoicing control.
Liquidity Analysis — Identify potential shortfalls before they occur.
Profit-to-Cash Reconciliation — Ensure your profits match your actual bank performance.
CPA Oversight — Validate and monitor all data for CRA and Revenu Québec compliance.

Powering Client Needs and Stability
A Montreal manufacturer avoided bankruptcy after Mackisen restructured its payment cycles and cash flow forecasts. A Quebec service firm improved liquidity by automating receivable tracking. A Toronto retailer secured bank financing after Mackisen CPAs created reliable cash flow projections.
How Mackisen Clients Benefit

• Predictable liquidity and solvency

• Accurate CRA-aligned records

• Fewer cash shortages and overdraft penalties

• Investor and lender-ready cash flow reports

• CPA-managed automation tools

Common Questions
Can I be profitable but still lose cash? Yes, if receivables or inventory are mismanaged.
Does CRA review cash flow reports? Yes, during audit reconciliations.
How often should I forecast? Monthly, or whenever sales fluctuate.
Can Mackisen automate forecasting? Absolutely—with integrated cloud tools.
Does strong cash flow improve credit? Yes, it enhances financing eligibility.

Why Mackisen
Mackisen CPA Auditors Montreal makes cash flow control simple, scientific, and strategic. We help you convert profits into liquidity, stability, and growth through proactive CPA management.