General and Administrative Expense
Financials
Industry:
Sector Agnostic
Short Definition
General & Administrative (G&A) Expense is the overhead to run the company: finance, legal, HR/people ops, executive, facilities/office, corporate IT, insurance, audit, and other back-office costs. It excludes costs to build the product (Research and Development Expense) or acquire/serve customers (Sales and Marketing Expense /Cost Of Goods Sold).
Short Definition
General & Administrative (G&A) Expense is the overhead to run the company: finance, legal, HR/people ops, executive, facilities/office, corporate IT, insurance, audit, and other back-office costs. It excludes costs to build the product (Research and Development Expense) or acquire/serve customers (Sales and Marketing Expense /Cost Of Goods Sold).
Short Definition
General & Administrative (G&A) Expense is the overhead to run the company: finance, legal, HR/people ops, executive, facilities/office, corporate IT, insurance, audit, and other back-office costs. It excludes costs to build the product (Research and Development Expense) or acquire/serve customers (Sales and Marketing Expense /Cost Of Goods Sold).
Why it matters for Investors
Operating discipline: Shows how lean the back office is per $ of revenue.
Path to profitability: Lower G&A as % of revenue → better operating margin.
Scalability test: Healthy companies see G&A grow slower than revenue.
Why it matters for Investors
Operating discipline: Shows how lean the back office is per $ of revenue.
Path to profitability: Lower G&A as % of revenue → better operating margin.
Scalability test: Healthy companies see G&A grow slower than revenue.
Why it matters for Investors
Operating discipline: Shows how lean the back office is per $ of revenue.
Path to profitability: Lower G&A as % of revenue → better operating margin.
Scalability test: Healthy companies see G&A grow slower than revenue.
Formula
Practical considerations -
Be explicit: Publish what sits in General and Administrative Expense vs Research and Development Expense vs Sales and Marketing Expense vs COGS and stick to it.
D&A: Depreciation/Amortization may be shown separately or allocated into functions. If you include it in G&A, do it consistently and don’t double-count.
Capitalization: Capitalize qualifying items (e.g., leasehold improvements) and exclude from G&A; only the depreciation/amortization hits later.
Allocations: Shared costs (IT, office) can be allocated by headcount/usage if you want function-level margins—document the rule.
Formula
Practical considerations -
Be explicit: Publish what sits in General and Administrative Expense vs Research and Development Expense vs Sales and Marketing Expense vs COGS and stick to it.
D&A: Depreciation/Amortization may be shown separately or allocated into functions. If you include it in G&A, do it consistently and don’t double-count.
Capitalization: Capitalize qualifying items (e.g., leasehold improvements) and exclude from G&A; only the depreciation/amortization hits later.
Allocations: Shared costs (IT, office) can be allocated by headcount/usage if you want function-level margins—document the rule.
Formula
Practical considerations -
Be explicit: Publish what sits in General and Administrative Expense vs Research and Development Expense vs Sales and Marketing Expense vs COGS and stick to it.
D&A: Depreciation/Amortization may be shown separately or allocated into functions. If you include it in G&A, do it consistently and don’t double-count.
Capitalization: Capitalize qualifying items (e.g., leasehold improvements) and exclude from G&A; only the depreciation/amortization hits later.
Allocations: Shared costs (IT, office) can be allocated by headcount/usage if you want function-level margins—document the rule.
Worked Example
Line Item | Amount | Notes |
Add : People (finance, legal, HR, exec) | $780,000 | Salaries, benefits, bonuses, stock comp |
Add : Professional services | $210,000 | Audit, tax, legal, compliance, consultants |
Add : Facilities & office | $145,000 | Rent, utilities, supplies, security |
Add : Corporate IT & tools | $95,000 | Email, device management, HRIS, ERP, admin tools |
Add : Insurance & licenses | $70,000 | D&O, cyber, GL, business licenses, filings |
Add : Recruiting & employer brand | $60,000 | Agency fees, job boards, employer branding |
Add : Board & investor relations | $25,000 | Board costs, data rooms, filings |
Add : Other admin | $15,000 | Misc. bank fees, postage |
Total G&A Expense | $1,400,000 | Sum of above |
Notes:
People includes exec team comp (CEO/CFO/CHRO), finance, legal, HR/People Ops, admin.
Corporate IT is internal employee IT (helpdesk, laptops, email) — not production hosting (that’s COGS).
Recruiting lives in G&A unless you explicitly allocate to functions.
Income taxes are not G&A (they sit below operating income).
Worked Example
Line Item | Amount | Notes |
Add : People (finance, legal, HR, exec) | $780,000 | Salaries, benefits, bonuses, stock comp |
Add : Professional services | $210,000 | Audit, tax, legal, compliance, consultants |
Add : Facilities & office | $145,000 | Rent, utilities, supplies, security |
Add : Corporate IT & tools | $95,000 | Email, device management, HRIS, ERP, admin tools |
Add : Insurance & licenses | $70,000 | D&O, cyber, GL, business licenses, filings |
Add : Recruiting & employer brand | $60,000 | Agency fees, job boards, employer branding |
Add : Board & investor relations | $25,000 | Board costs, data rooms, filings |
Add : Other admin | $15,000 | Misc. bank fees, postage |
Total G&A Expense | $1,400,000 | Sum of above |
Notes:
People includes exec team comp (CEO/CFO/CHRO), finance, legal, HR/People Ops, admin.
Corporate IT is internal employee IT (helpdesk, laptops, email) — not production hosting (that’s COGS).
Recruiting lives in G&A unless you explicitly allocate to functions.
Income taxes are not G&A (they sit below operating income).
Worked Example
Line Item | Amount | Notes |
Add : People (finance, legal, HR, exec) | $780,000 | Salaries, benefits, bonuses, stock comp |
Add : Professional services | $210,000 | Audit, tax, legal, compliance, consultants |
Add : Facilities & office | $145,000 | Rent, utilities, supplies, security |
Add : Corporate IT & tools | $95,000 | Email, device management, HRIS, ERP, admin tools |
Add : Insurance & licenses | $70,000 | D&O, cyber, GL, business licenses, filings |
Add : Recruiting & employer brand | $60,000 | Agency fees, job boards, employer branding |
Add : Board & investor relations | $25,000 | Board costs, data rooms, filings |
Add : Other admin | $15,000 | Misc. bank fees, postage |
Total G&A Expense | $1,400,000 | Sum of above |
Notes:
People includes exec team comp (CEO/CFO/CHRO), finance, legal, HR/People Ops, admin.
Corporate IT is internal employee IT (helpdesk, laptops, email) — not production hosting (that’s COGS).
Recruiting lives in G&A unless you explicitly allocate to functions.
Income taxes are not G&A (they sit below operating income).
Best Practices
Track % of revenue: Aim for G&A % to decline over time as you scale.
Centralize tools: Consolidate back-office software; remove idle seats.
Set approval limits: Tighten vendor/contract thresholds to avoid creep.
Quarterly vendor sweep: Re-bid audit, insurance, and major contracts annually.
Allocate smartly: If you report function margins, allocate shared costs with a simple, documented driver (headcount).
Best Practices
Track % of revenue: Aim for G&A % to decline over time as you scale.
Centralize tools: Consolidate back-office software; remove idle seats.
Set approval limits: Tighten vendor/contract thresholds to avoid creep.
Quarterly vendor sweep: Re-bid audit, insurance, and major contracts annually.
Allocate smartly: If you report function margins, allocate shared costs with a simple, documented driver (headcount).
Best Practices
Track % of revenue: Aim for G&A % to decline over time as you scale.
Centralize tools: Consolidate back-office software; remove idle seats.
Set approval limits: Tighten vendor/contract thresholds to avoid creep.
Quarterly vendor sweep: Re-bid audit, insurance, and major contracts annually.
Allocate smartly: If you report function margins, allocate shared costs with a simple, documented driver (headcount).
FAQs
Does General and Administrative Expense include stock-based compensation?
Yes—wherever the employee sits. Exec/finance/legal/HR stock comp is in G&A.Is executive travel General and Administrative Expense or Sales and Marketing Expense?
Exec travel for customer selling → Sales and Marketing Expense. Corporate/board travel → General and Administrative Expense.Are production cloud and payment fees in General and Administrative Expense?
No. They’re delivery costs → Cost of Goods Sold.Where do recruiting costs go?
Usually General and Administrative Expenses. If you allocate, you can split to Research and Development Expense /Sales and Marketing Expense /General and Administrative Expense by hires.Do we put income taxes in General and Administrative Expense?
No. Income taxes are below operating income (not operating expense).
FAQs
Does General and Administrative Expense include stock-based compensation?
Yes—wherever the employee sits. Exec/finance/legal/HR stock comp is in G&A.Is executive travel General and Administrative Expense or Sales and Marketing Expense?
Exec travel for customer selling → Sales and Marketing Expense. Corporate/board travel → General and Administrative Expense.Are production cloud and payment fees in General and Administrative Expense?
No. They’re delivery costs → Cost of Goods Sold.Where do recruiting costs go?
Usually General and Administrative Expenses. If you allocate, you can split to Research and Development Expense /Sales and Marketing Expense /General and Administrative Expense by hires.Do we put income taxes in General and Administrative Expense?
No. Income taxes are below operating income (not operating expense).
FAQs
Does General and Administrative Expense include stock-based compensation?
Yes—wherever the employee sits. Exec/finance/legal/HR stock comp is in G&A.Is executive travel General and Administrative Expense or Sales and Marketing Expense?
Exec travel for customer selling → Sales and Marketing Expense. Corporate/board travel → General and Administrative Expense.Are production cloud and payment fees in General and Administrative Expense?
No. They’re delivery costs → Cost of Goods Sold.Where do recruiting costs go?
Usually General and Administrative Expenses. If you allocate, you can split to Research and Development Expense /Sales and Marketing Expense /General and Administrative Expense by hires.Do we put income taxes in General and Administrative Expense?
No. Income taxes are below operating income (not operating expense).
Related Metrics
Commonly mistaken for:
Cost of Sales (Delivery Costs)
R&D Expense (Engineering, product, design building the product_
S&M Expense (Sales/marketing people, paid media, agencies, partner fees, commissions (amortized))
CapEx (Office buildouts, equipment purchases recorded on balance sheet (only depreciation later hits P&L))
Related Metrics
Commonly mistaken for:
Cost of Sales (Delivery Costs)
R&D Expense (Engineering, product, design building the product_
S&M Expense (Sales/marketing people, paid media, agencies, partner fees, commissions (amortized))
CapEx (Office buildouts, equipment purchases recorded on balance sheet (only depreciation later hits P&L))
Related Metrics
Commonly mistaken for:
Cost of Sales (Delivery Costs)
R&D Expense (Engineering, product, design building the product_
S&M Expense (Sales/marketing people, paid media, agencies, partner fees, commissions (amortized))
CapEx (Office buildouts, equipment purchases recorded on balance sheet (only depreciation later hits P&L))
Source of:
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