Introduction

In Quebec, many businesses are seasonal: landscapers, restaurant patios, summer camps, tourism businesses, winter stores, online vendors tied to a specific period, etc. These businesses generate a lot of revenue over a short period… then must survive during the low season. Good cash management is not only desirable, it is essential to avoid debts, tax delays, and operational problems. This guide presents the best strategies for managing the cash flow of a seasonal business, as well as the support that a CPA near you in Montreal can offer.

Legal and Regulatory Framework

The Income Tax Act and the Quebec Tax Act require that all businesses, even seasonal ones:
• File accurate annual returns
• Maintain accurate accounting records
• Make GST/QST payments by the deadlines
• Pay provisional tax installments if necessary
• Report income according to the fiscal year, even if cash flow fluctuates

Seasonal businesses must anticipate their tax obligations even when there is little or no revenue during the low season.

Important Judicial Decisions

The courts remind that:
• A lack of revenue off-season does not excuse delays in GST/QST or tax.
• Owners must plan liquidity to meet their obligations.
• Personal expenses financed by the business during the low season can lead to adjustments or taxable benefits.
• Unexplained discrepancies in sales or bank deposits increase the risk of audits.

Decisions underscore that proactive cash management is essential.

Why Seasonal Businesses Are Targeted by the CRA and Revenu Québec

Tax authorities monitor these businesses because they often show:
• Delays in GST/QST
• Unpaid balances of provisional installments
• Inconsistent deposits
• Excessive off-season spending
• Over-reliance on high season's margins
• Irregularities in seasonal inventories

CRA and Revenu Québec compare reported income, seasonal trends, bank statements, and industry ratios.

Essential Strategies for Managing the Cash Flow of a Seasonal Business

1. 12-Month Cash Forecast

A seasonal business must forecast cash flow for the entire year:
• Monthly revenues
• Fixed expenses (rent, minimum wages, insurance, software)
• Variable expenses based on the season
• Tax obligations
• Cash required to survive the low season

A rolling forecast updated monthly reduces stress and avoids surprises.

2. Setting Aside Funds During High Season

During the busy months, it is essential to set aside:
• Future sales taxes
• Funds for off-season wages
• Funds for provisional installments
• Operational cushion for unforeseen events

The lack of savings during the high season is the main cause of off-season problems.

3. Strategic Reduction of Off-Season Costs

Seasonal SMEs must analyze off-season expenses:
• Unnecessary subscriptions
• Reduced working hours
• Minimal stock
• Advertising adjusted to demand
• Renegotiation with suppliers

Discipline during off-season allows for maintaining healthy cash flow.

4. Revenue Diversification

To stabilize cash flow:
• Offer complementary services off-season
• Launch pre-season promotions
• Accept one-time contracts
• Sell gift cards
• Develop a non-seasonal service or product

Diversifying revenue reduces reliance on the seasonal cycle.

5. Strict Management of Accounts Receivable and Payable

To avoid cash flow gaps:
• Invoice promptly
• Monitor overdue payments
• Negotiate longer payment terms with suppliers
• Offer discounts for early payments
• Automate invoice reminders

Even a single unpaid invoice can create a cash flow crisis during the low season.

Mackisen Strategy

At Mackisen CPA Montreal, we help seasonal businesses to:
• Build annual cash forecasts
• Establish a seasonal dashboard
• Anticipate tax obligations (GST/QST, installments, taxes)
• Manage periods of low income
• Optimize margins during the high season
• Automate billing and reminders
• Reduce off-season costs
• Structure a sustainable working capital

We guide seasonal businesses to avoid common financial pitfalls and maximize their profitability.

Real Client Experience

A Montreal landscaper ended each winter with a deficit. We created an annual forecast, identified unnecessary off-season expenses, and restructured its high-season rates. Result: a winter without debt and improved stability.
A seasonal tourism business was losing cash flow every autumn. Our dashboard revealed a surplus of unused stock; we organized a pre-season liquidation and improved future purchases.

Frequently Asked Questions

How to survive financially during the low season?

With an annual forecast, putting aside funds, and disciplined cost reduction.

Do I have to pay GST/QST even off-season?

Yes. Deadlines remain, even in the absence of temporary revenue.

How to avoid seasonal debts?

By saving during the high season and diversifying revenues.

Is short-term financing useful?

Yes, for bridging cash flow gaps, but only integrated into a planned financial strategy.

Why Mackisen

With over 35 years of combined experience, Mackisen CPA Montreal helps seasonal businesses manage their cash flow in a strategic and sustainable way. We provide you with a clear vision, modern tools, and full compliance with Quebec tax requirements.