Startup Achieves 100% GST/QST Compliance – A Success Story

A Montreal tech startup was expanding rapidly, but behind the scenes, its GST/QST compliance was falling apart. Monthly bookkeeping delays, missing invoices, incorrect tax coding, and chaotic bank reconciliations created a high risk of audit. The founders knew their administrative processes couldn’t keep up with their growth and Revenu Québec had already begun issuing verification letters.

Within a short period, Mackisen helped the startup achieve perfect compliance, pass all verification checks, and establish an audit-ready structure for long-term success.

Here’s how the transformation happened.

The Situation: Fast Growth, Slow Bookkeeping

The startup faced:
• multiple unfiled GST/QST periods
• missing SaaS and digital subscription invoices
• personal expenses mixed with business transactions
• inconsistent tax treatment (GST-only vs GST+QST)
• incorrect coding for foreign and zero-rated services
• deposits that didn’t match declared sales
• refund delays due to incomplete documentation

Revenu Québec flagged the account for:
• irregular refund patterns
• mismatched sales totals
• late filings
• inconsistent tax coding

An audit was increasingly likely.

Step 1 — Complete Reconstruction of Accounting Records

Mackisen went into full cleanup mode:
• reconciled all bank and credit card accounts
• retrieved missing supplier invoices
• downloaded online subscription receipts
• categorized every transaction correctly
• removed duplicates
• separated personal vs business expenses

Within weeks, the financials were accurate and ready for compliance review.

Step 2 — Fixing GST/QST Coding Across All Systems

The team corrected:
• GST/QST rates in accounting software
• tax rules for domestic vs. foreign sales
• zero-rated vs. exempt categories
• tax codes tied to each supplier and product
• recurring billing tools (Stripe, PayPal, etc.)

The startup’s entire taxation structure was rebuilt to industry standards.

Step 3 — Preparing Accurate GST/QST Filings

Mackisen prepared:
• corrected FPZ-500-V returns
• detailed ITC/ITR support schedules
• tax reconciliation for each filing period
• explanations for previous discrepancies

The filings were pristine and fully supported.

Step 4 — Communicating With Revenu Québec

The CPA team:
• responded to all verification letters
• provided organized documentation
• clarified the nature of zero-rated international sales
• demonstrated corrective actions already implemented

This reassured the auditor and avoided escalation.

Step 5 — Establishing Long-Term Compliance Controls

Mackisen implemented:
• monthly bookkeeping cycles
• automated receipt tracking
• consistent tax coding rules
• software integrations for sales platforms
• a reconciliation checklist
• a GST/QST filing calendar

The startup became “audit-ready” every month.

The Outcome

The startup:
• achieved 100% GST/QST compliance
• had all refunds approved with no delays
• avoided penalties and interest
• restored trust with Revenu Québec
• gained accurate, stress-free monthly financials
• eliminated audit risk

Founders could now focus on scaling not scrambling.

Key Lessons

• Rapid growth exposes GST/QST weaknesses quickly
• Clean books and correct coding eliminate refund delays
• Strong documentation prevents audits
• Startups need monthly processes, not yearly cleanups
• CPA guidance creates long-term stability

Client Quote

“We went from panic to perfect compliance. Mackisen built us a bulletproof system. Now we’re confident and audit-proof.”

Common Questions

Are startups more vulnerable to audits?
Often yes inconsistent books trigger review.

Can GST/QST issues be fixed retroactively?
Absolutely reconstruction is common.

How fast can compliance be restored?
Often within weeks with the right CPA team.

Can foreign sales affect compliance?
Yes zero-rated services must be documented properly.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps startups build clean, audit-ready GST/QST systems that scale with growth eliminating risk and empowering expansion.