These are costs crucial to your company's day-to-day running, like supplies for your office and accounting fees.
So what exactly is the full meaning of G&A, and why is it important for you to track G&A expenses? We'll cover all that and more, so let's dive in!
What is G&A in a Company?
General and administrative expenses are costs that aren't related to sales or production that you take on when running your business—like internet and power bills, executive salaries, and rent. These exist whether you generate revenue or make profits or losses.
When you look at a company's income statement, you'll find these costs in Operating Expenses or SG&A expenses (selling, general, and administrative)—both of which are listed below cost of goods sold (COGS). COGS, however, are the direct costs of making the products a business sells.
Although selling and G&A expenses are grouped together, they aren't the same. Selling expenses are related to marketing, distributing, and selling a product.
What Are Some Examples of G&A?
Some examples of G&A expenses include executive salaries, rent, and utilities. As the name implies, we break G&A expenses into two groups: general and administrative costs.
Your business takes on general expenses as part of its day-to-day operations. Examples include rent, utilities, insurance, and general supplies. Administrative costs relate to the management of your company. They include executive salaries and accounting, legal, and professional fees.
Here's a quick breakdown of both types of expenses: