![]() This is specific to the project in question, making it part of that project's budget rather than a G&A cost. This is different from, for example, concrete for a construction project. Even minor items, like team snacks, can count as supply costs. For instance, a company's expenses for stationery, office equipment, and machine components for a factory, regardless of whether it's producing a specific item, are all G&A costs. Supply costs that are general to the company, rather than relating directly to a project, qualify as general and administrative costs. G&A for organizations like these are important because they establish a company's credibility and expose it to new customers. Specific industries also have membership-based organizations. Fees are a broad category and include professional memberships like a local chamber of commerce. Cosmetologists have state licenses to perform their services.Īpplying for and renewing these licenses count as general and administrative costs. Restaurants, for example, have food and beverage licenses to serve customers. Related: How Does Workers' Comp Work? (And How To Create a Claim) Licenses and feesīusinesses of all kinds require licensure to operate. Workers' compensation insurance, which ensures teams receive a payment if injured on the job Other types of insurance include:īusiness income insurance, which protects a company if production stops For instance, medical facilities and law offices often carry malpractice insurance to cover their teams. In addition to insurance that protects business property, many organizations require insurance on team members or the company itself. Related: What Is Labor Cost? (Definition, Formula and Examples) Insurance Some other expenses that relate to salaries of team members include relocating a new hire and compensating team members for travel or job trainings. In addition to a team member's actual pay rate, the following costs may also qualify in this category: Team member salaries and wages are also major components of G&A expenses. Related: How To Use Construction in Progress Accounts Salaries and wages Minor operating expenses like lawn service and cleaning can be part of this category. ![]() Utilities, including electricity and water Property insurance, such as fire or flood insurance While the types of G&A expenses a company has can vary widely depending on its size and industry, most are in these categories: Building expensesīuilding expenses include any costs relating to operating the facility that houses a company. Read more: What Are Operating Expenses? (With Examples) Examples of G&A expenses Overhead could consist of the cost of the glass, polish, metal framing and other materials. For instance, if an individual owns a stained-glass workshop, G&A expenses could include renting the studio. G&A expenses include rent, insurance, utilities and other day-to-day business costs. Overhead specifically pertains to the costs of producing a good or service or completing a task. G&A costs accrue regardless of whether a company is working on a project. While G&A is similar to overhead, the terms differ: Also called indirect costs or G&A expenses, are fixed, which means they remain the same regardless of how much or little a company makes in sales or other production metrics. General and administrative expenses comprise a portion of a company's operating costs and typically apply to the entire company rather than one facility or department. What are general and administrative expenses? Reducing a company's G&A expenses by moving an office to a less expensive facility or making the workforce remote can help increase its profitability. Types of G&A expenses include building expenses, salaries and wages, insurance, licenses and fees and supplies. General and administrative expenses are accounting terms that refer to a company's operating expenses that stay the same regardless of sales or production levels. In this article, we define general and administrative (G&A) expenses and share examples, along we review tips for reducing these expenses, how to calculate them and why they're important, plus we go over SG&-or selling, general and administrative-expenses. If you want to work in accounting, finance or a related field, you may benefit from learning about this topic. Business expenses often include costs that relate to selling products, such as marketing costs, and costs that remain fixed over time. ![]() When tracking or managing a company's expenses, it's crucial to understand the major categories of costs.
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