Oakes Accounting Ltd

Oakes Accounting Ltd A small and personal accountancy and bookkeeping business based on the Wirral, which offers a tailor

It's not the nicest question to ask. But it's an extremely useful one.Take the cash your business has available and comp...
07/10/2026

It's not the nicest question to ask. But it's an extremely useful one.

Take the cash your business has available and compare it with the essential cash commitments it needs to meet each month.

That gives you an indication of your cash runway.

For example:
£30,000 available cash.
£10,000 essential monthly cash requirements.

Roughly 3 months of runway, before considering other cash movements and available facilities.

Why is this useful? Because two businesses with £30,000 in the bank can be in completely different positions.

One might need £5,000 a month to operate. Another might need £25,000.

The bank balance alone doesn't tell you how financially resilient the business is. Knowing your runway can help you decide when you can safely invest, when costs need attention and how urgently you need to respond to a fall in sales.

Don't just ask how much cash you have. Ask how long it would last.
📞 0151 342 7669
🌐 oakesaccounting.co.uk

This is particularly worth knowing if your income or business profits vary significantly from year to year.The standard ...
05/10/2026

This is particularly worth knowing if your income or business profits vary significantly from year to year.

The standard pension annual allowance for 2026/27 is £60,000, although some people have a lower allowance depending on their circumstances.

But here's the part that's easily missed:

You may be able to carry forward unused annual allowance from the previous three tax years.

That can become relevant if, for example, you've had an unusually profitable year and want to make a larger pension contribution.

It isn't simply a case of looking at this year's £60,000 figure, though.

Your previous pension contributions, earnings, pension membership and whether restrictions such as the tapered or money purchase annual allowance apply all need considering.

So if you're planning a significant pension contribution, don't automatically assume this year's headline allowance is the end of the calculation.

There may be unused allowance sitting behind you.

This is one of those areas where planning before 5 April can make a significant difference.

📞 0151 342 7669
🌐 oakesaccounting.co.uk

You're busy enough to hire.Great.But before advertising the role, there's a calculation worth doing.The cost of employin...
02/10/2026

You're busy enough to hire.

Great.

But before advertising the role, there's a calculation worth doing.

The cost of employing someone isn't simply their headline salary.

Depending on the circumstances, you may also need to budget for things such as:

• employer National Insurance
• employer pension contributions
• equipment and software
• training
• recruitment costs
• other employment-related overheads

Then comes the question businesses often miss:

How much additional gross profit does this person need to help generate for the hire to make commercial sense?

Suppose the total annual cost of adding someone to the business was £40,000.

If your average gross margin were 40%, you wouldn't simply need £40,000 of additional sales to cover that cost.

At that margin, you'd need £100,000 of additional revenue to generate £40,000 of gross profit.

That's a much more useful calculation before hiring.

Growth decisions should be based on the economics of the business — not simply how busy everyone feels.

📞 0151 342 7669
🌐 oakesaccounting.co.uk

Let's say your business has £8,000 of fixed costs each month. And after the direct costs of delivering your work, you re...
02/10/2026

Let's say your business has £8,000 of fixed costs each month. And after the direct costs of delivering your work, you retain an average 40% gross margin.

How much revenue do you need before you've covered those £8,000 of fixed costs?

Not £8,000. It's £20,000.

Because: £20,000 revenue × 40% = £8,000 gross profit.

Only after that point do you begin generating operating profit, assuming those figures capture the relevant costs.

That's your break-even point. And it's a far more useful monthly target than: “Let's try to beat last month.”

Once you understand break-even, you can start answering better questions:

What happens if costs increase?
How much more do we need to sell before hiring?
What happens if our margin falls?
How much revenue do we actually need to hit our desired profit?

Your sales target shouldn't be a number picked because it sounds ambitious. It should have maths behind it.
📞 0151 342 7669
🌐 oakesaccounting.co.uk

Most businesses know who their biggest customers are.Far fewer know who their most profitable customers are.Imagine:Cust...
30/09/2026

Most businesses know who their biggest customers are.

Far fewer know who their most profitable customers are.

Imagine:

Customer A generates £50,000 of revenue. But servicing them requires significant staff time, travel, materials, revisions and support.

Customer B generates £20,000. But the cost and time required to deliver their work is comparatively small.

Customer A brings in considerably more revenue. Customer B could still contribute more profit.

This is why looking at turnover alone can lead to some very expensive decisions.

If possible, start looking at profitability by:

• customer
• project
• product
• service

You may discover that the part of the business you're trying hardest to grow isn't actually the part you should be growing.

That's when accounts stop being something produced for HMRC and start becoming information you can actually run the business with.

📞 0151 342 7669
🌐 oakesaccounting.co.uk

Imagine your company pays £2,400 for 12 months of insurance shortly before its financial year end.£2,400 has left the ba...
28/09/2026

Imagine your company pays £2,400 for 12 months of insurance shortly before its financial year end.

£2,400 has left the bank. But does the entire £2,400 necessarily belong in that year's Profit & Loss account? Not always.

Accountants use something called a prepayment when a business has paid for a cost that relates partly to a future accounting period.

The part relating to the future is carried forward and recognised when it actually relates to the business.

You can see this with costs such as:

• Insurance
• Software subscriptions
• Licences
• Rent
• Service contracts

It's another reason your bank transactions and your accounts don't always match pound-for-pound.

When you paid for something and when the cost belongs in your accounts can be two different dates.

📞 0151 342 7669
🌐 oakesaccounting.co.uk

Pay £1,000 for a course related to your work and it's automatically an allowable expense...Right?This area is more nuanc...
25/09/2026

Pay £1,000 for a course related to your work and it's automatically an allowable expense...

Right?

This area is more nuanced than many people realise.

For a self-employed person, training that updates or improves skills used in their existing business can potentially be allowable.

But the position can be different where training gives you the skills to start an entirely new trade or business.

For example:

A photographer taking advanced photography training?

Very different from a photographer paying to retrain as an electrician.

The key question isn't simply:

"Will this course help me earn money?"

It's what the training relates to and the nature of your existing business.

Before spending thousands on professional development because you've been told you can "put it through the business", check how the rules apply to your circumstances.

📞 0151 342 7669
🌐 oakesaccounting.co.uk

Limited company directors often ask whether their company can pay for their mobile phone.There is a useful exemption whe...
23/09/2026

Limited company directors often ask whether their company can pay for their mobile phone.

There is a useful exemption where an employer provides one mobile phone or SIM card to an employee, including a director, subject to the relevant conditions.

Private use doesn't necessarily create a taxable benefit.

But there's an important distinction:

Ideally, the contract should be between the company and the mobile provider.

If the contract is personally yours and the company simply pays your bill, the tax treatment can be different.

It's a good example of why:

"The company paid for it"

doesn't tell you enough to know how something should be treated for tax.

Who actually entered into the contract can matter too.

📞 0151 342 7669
🌐 oakesaccounting.co.uk

You've taken a 30% deposit for a project that won't be completed for another three months.When does the VAT become relev...
21/09/2026

You've taken a 30% deposit for a project that won't be completed for another three months.

When does the VAT become relevant?

For VAT-registered businesses, receiving a deposit can create a tax point.

That means VAT can potentially need to be accounted for on the amount received before you've completed the full job or received the remaining balance.

This matters for businesses that regularly take advance payments — builders, event suppliers, consultants, manufacturers and many others.

It's easy to look at a deposit as simply money towards a future job.

From a VAT perspective, the timing of payments and invoices can matter.

So if your business takes deposits, make sure your bookkeeping process handles them correctly rather than waiting until the entire job is finished.

📞 0151 342 7669
🌐 oakesaccounting.co.uk

You've stopped trading through your limited company.No customers.No sales.No real activity.So you can just leave it alon...
18/09/2026

You've stopped trading through your limited company.

No customers.

No sales.

No real activity.

So you can just leave it alone?

Not quite.

A company can be dormant, but while it remains registered at Companies House there can still be filing responsibilities.

Depending on the circumstances, these can include dormant company accounts and a confirmation statement.

There can also be steps required with HMRC when a company stops trading.

This is where people sometimes get caught out:

Dormant doesn't mean dissolved.

A dormant company still exists as a legal entity.

If you genuinely don't need the company anymore, that's a different conversation from simply making it dormant.

Ignoring it isn't the same as closing it.

📞 0151 342 7669
🌐 oakesaccounting.co.uk

Address

37 Meadowcroft
Heswall
CH601UT

Opening Hours

Monday 9am - 5:30pm
Tuesday 9am - 5:30pm
Wednesday 9am - 5:30pm
Thursday 9am - 5:30pm
Friday 9am - 5:30pm

Website

Alerts

Be the first to know and let us send you an email when Oakes Accounting Ltd posts news and promotions. Your email address will not be used for any other purpose, and you can unsubscribe at any time.

Contact The Business

Send a message to Oakes Accounting Ltd:

Shortcuts

Share

Category