What are general and administrative expenses?

General and Administrative (G&A) expenses are the day-to-day costs a business must pay to operate, whether or not it manufactures products or generates revenue. Typical G&A expenses include rent, utilities, insurance payments, and wages and salaries for administrative and management staff other than salespeople.

Are consulting fees G&A?

Examples of general and administrative (G&A) expenses include building rent, consultant fees, depreciation on office furniture and equipment, insurance, supplies, subscriptions, and utilities.

What is covered under G&A?

G&A expenses typically include facilities, information technology (for employees, not for deliverables to a customer), telephony, accounting, legal, insurances (except fringe benefits), allowable taxes/licenses/fees, and professional training (not solely required for a particular contract).

What are general expenses?

General expenses are the costs a business incurs as part of its daily operations, separate from selling and administration expenses. Together, general, selling and administration (SG&A) expenses make up a company’s operating expenses.

What are examples of administrative expenses?

Typical items listed as general and administrative expenses include:

  • Rent.
  • Utilities.
  • Insurance.
  • Executives wages and benefits.
  • The depreciation on office fixtures and equipment.
  • Legal counsel and accounting staff salaries.
  • Office supplies.

What of revenue should G&A be?

G&A overhead salaries range from 8 percent to 12 percent of sales. They normally comprise half of all G&A costs. In other words, the biggest G&A expense that a company has is office staff.

What percentage should G&A be?

Key Takeaways Benchmark G&A expenses are around 20% of the total company revenue. For top performing companies, the benchmark is around 3% to 5%.

Why is it important to have G&A in the early days of biotech?

G&A expenses are not related to manufacturing, production, or sales. Instead, they involve every (often necessary) overhead incurred by a company. G&A expenses are important since they directly affect cash flow. And yet, 64% of small businesses refer to cash flow problems as one of the primary obstacles for growth.

What are administrative expenses examples?

Administrative Expenses Examples Executive salaries and bonuses. Professional fees, such as legal, consulting, and audit fees. Office supplies. Subscriptions. Salaries and wages of personnel performing staff functions, like the accounting department, human resources, etc.

How do you find general and administrative expenses?

How to calculate G&A expenses. General and administrative expenses typically appear on a company’s income statement for a given period directly below the cost of goods sold (COGS). The organization then subtracts the COGS from net revenue to find the gross margin.

What are the examples of selling general and administrative expenses?

These costs don’t relate directly to selling products or services but rather to the general ongoing operation of the business. The most common examples are rent, insurance, utilities, supplies, and expenses related to company management, such as salaries of executives, admin staff, and non-salespeople.