![]() ![]() Your sales, marketing, development, and design all contribute directly to selling, so they usually wouldn’t count. When we think of salaries as a G&A expense, we’re talking mostly about corporate staff: management, finance, accounts, custodial, and IT. ![]() For now, let’s look at the types of expense. We’ll look at your expense management options later in this article. But one thing remains the same: companies need to find an easy way to pay for these and track their costs. The types of expense are of course different. While businesses will have their own typical office expenses, there are several categories that most would consider standard. So the easier it is to track these costs, the better. As PreferredCFO explains, "82% of the time, poor cash flow management or poor understanding of cash flow contributes to the failure of a small business." Per InvestingAnswers, "because often houses the salaries of the top executives, as well as many other expenses, it is often the target of cost-cutting when a company has cash flow problems."Īnd cash flow really is a significant issue. This is one of the first areas for a business to prune if it wants to increase profits. The little things - a nice colour scheme and an open feel - can be the difference between signing the person you want, and seeing them walk.Īnd as we’ll see, G&A expenses speak directly to a company’s efficiency. This sort of environment also helps you find the best talent and keep them around for longer. Your teams need a high-functioning environment in which they’re comfortable and can work without sweating the small stuff. Why are they important?Īn office doesn’t just run itself. Sales and marketing will have their own budgets and managers, and we want to look at what makes G&A a unique challenge to manage. They’re kept distinct from production (manufacturing) costs.īut for the purposes of this article, we’re choosing to focus only on general and administrative expenses. Sales, general and administrative expensesĪs you can see, selling costs are often lumped in with G&A in a company’s income statement. If it doesn’t directly bring in revenue, it’s likely to be a G&A expense.īroadly speaking, your business will have three main types of expense on its books: They include rent, some salaries, employee perks, office supplies, and much more. These are the necessities (and sometimes the luxuries) that most companies require. Very simply, general and administrative expenses are the costs associated with running a business that don’t relate to your products or sales. What are general and administrative expenses? ![]()
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