Understanding General and Administrative Expenses (G&A)

From a certain point of view, things like buying fresh equipment and launching marketing campaigns are your “sexy” expenses, directly contributing to moving the needle on your company’s momentum. Your “unsexy” expenses include the rent, insurance, maintenance, and fees that need to be paid every month to keep the lights on, metaphorically and literally.

Those are your general and administrative (G&A) expenses. While they can be easy to overlook as you build your budgets and balance your books, they’re just as important as your bigger investments. Tracking your G&A expenses and keeping them under control can be a challenge, however, especially if you don’t use modern banking tools and accounting software.

We put this guide together to explain what G&A expenses are, how to record them, and the strategies you should employ to monitor and minimize them. If you’re looking for an easier way to manage your G&A expenses alongside the rest of your incoming and outgoing payments, you might want to hear about Slash.¹ Slash is a business banking platform that records and auto-categorizes transactions in real time, meaning your G&A expenses are distinctly labeled and ready for reconciliation and analysis.

What are General and Administrative Expenses?

General and administrative (G&A) expenses are the indirect costs required to run a business that aren’t tied to producing goods or delivering services. These expenditures are largely fixed, meaning you’ll pay them whether you have a huge quarter or a slow one. Expenses that fall outside of this umbrella include cost of goods sold (COGS), which fluctuates with production volume, as well as sales commissions and product development.

On the income statement, G&A appears as part of operating expenses, right below gross profit. If you don’t know which expenses fall under what category, you could end up with distorted profit numbers and budgets built on incorrect data. If your income statement says you’ve been spending too much on G&A, but a lot of that has actually gone to research & development, you might put your money in the wrong place next quarter.

Examples of General and Administrative Expenses

Office rent and utilities: Rent for headquarters/offices, electricity, water, internet, and facility maintenance.
Salaries for certain staff: Payroll for leadership, human resources, accounting, legal, and other employees who support the business rather than produce goods or serve customers. Salaries for sales and manufacturing staff aren’t G&A expenses, on the other hand, since they’re directly connected to revenue.
Professional services: Fees paid to outside legal counsel, accounting firms, auditors, tax consultants, and business advisors.
Office supplies and equipment: Everyday supplies, furniture, computers, and other equipment used by administrative staff.
Insurance and licenses: General liability insurance, worker’s compensation, and other sorts of regulatory compliance fees.
Depreciation and amortization of assets: The gradual costs of non-production fixed assets, such as office furniture and equipment, over their useful lives. This is especially common within manufacturing companies and teams that drive fleets, since machinery and trucks lose value as time passes.

Importance of G&A Expenses in Financial Management

Tracking G&A can tell you what it actually costs to run your business. If your G&A grows faster than your revenue, you’ll have a tough time maintaining profit margins even when sales are strong. Investors and lenders tend to scrutinize G&A line items carefully for this exact reason. Companies that keep their G&A under control while steadily increasing their revenue and liquidity are often the healthiest ones.

Knowing your G&A totals can also help you project your cash flow. Because these costs are fixed, accurately predicting the total each month lets you build a more consistent budget. After all, payroll runs on a schedule, rent is due on the first, and insurance premiums (ideally) stay the same. All you have to do is add them up to get a fairly accurate estimate.

That said, perhaps your finance team is stretched too thin to be able to identify and calculate the costs of each G&A expense. If you need a helping hand, try asking Twin. Twin is Slash’s agentic AI assistant that’s built to dive into your data and break it down for you. With a couple simple prompts, Twin can pull every transaction with relevant categorizations, add up the totals, and build cash flow projections around your monthly G&A expenses.

G&A vs. SG&A: What's the Difference?

As you learn more about income statements and accounting, you might also see the term “SG&A”, which is slightly different. G&A covers the general administrative overhead of running the company, including executive salaries, office rent, utilities, insurance, and professional services. Importantly, these costs don’t connect to sales activity.

SG&A (selling, general, and administrative expenses) adds selling expenses on top of G&A. Selling expenses are the costs that come from generating revenue through sales: commissions, advertising spend, trade show costs, and marketing materials. When a company reports SG&A as a single line item, the selling costs and G&A costs are combined.

Generally speaking, it’s a little better to be specific on your income statement by keeping these two categories separate. A company with high SG&A might be saving money on office upkeep while investing heavily in sales & marketing, or they might be spending way too much on insurance with a small sales crew. Keeping these items distinct can help you and your investors identify your spending more clearly.

How to Record General and Administrative Expenses

You’ll have a pretty tough time measuring and adjusting your G&A expenses if they aren’t documented correctly. Here are some steps you can take to record them consistently and accurately:

Identify and Classify the Expense

First, you’ll want to confirm what the charge is for. Rent, insurance, salaries, professional fees, and software subscriptions all count as G&A. If you’re not totally sure, check last month’s bank statements – if you were charged the same amount 30 days ago, there’s a good chance it’s considered G&A. After identifying the expense, make sure documentation exists to back it up, then record it.

Enter into the Accounting System Under the Proper Category

Record each expense under the correct account in your chart of accounts (CoA). Here, you can get more granular, since your CoA serves as a "table of contents" for each of your business transactions. Salaries for administrative staff, office supplies, and rent each belong on separate line items, even though all three are G&A. Once you break it all apart, you’ll be able to analyze spending by type and identify where costs are growing.

Include in the Income Statement as Part of Operating Expenses

G&A expenses are recorded as operating expenses on the income statement, below gross profit and separate from COGS. Just like other expenses, they reduce operating income and affect net income for the period. Investors and lenders can take a quick glance at your gross profit, net income, and operating expenses to get an immediate impression of your company’s health.

Reconcile Monthly to Ensure Records Match Bank Transactions

At the end of the month, it’s a good idea to compare your G&A expenses against your bank and card transactions to catch discrepancies and duplicate charges. Here, you might also catch “zombie spend”, which are subscriptions and recurring fees you’re still paying for services you no longer use. Since G&A expenses are more subtle than others, it’s easy to let these types of problems go unchecked. That’s why careful reconciliation is so important.

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Strategies for Managing and Reducing Administrative Expenses

You might think G&A is basically unavoidable, but there's actually more room to save money on these expenses than you’d expect. While you can’t toss every recurring payment out, you can usually trim some fat and adjust some priorities. Here are some tips that can help:

Audit Recurring Costs

First, identify your software subscriptions and service contracts and compare them with the programs you use on a consistent basis. This allows you to spot zombie spending, as we mentioned a moment ago, but it can also help you decide whether to cancel a certain subscription. For example, if you only use Adobe once or twice a month to whip up a graphic, it’s probably not worth the investment.

Automate Manual Processes

Administrative salaries might be the single biggest piece of your G&A expenses. By automating manual payroll, expense approval, and monthly reporting processes, you can save your team time and make sure you don’t have to hire extra talent to manage tedious work. For example, a banking platform like Slash can automatically sync two-ways with accounting solutions like QuickBooks Online, NetSuite, Sage Intacct, and Xero. That means no one has to manually transcribe data from one piece of software to the other.

Negotiate Contracts

If you’ve been a loyal customer to a vendor for some time, and market rates and industry contexts have changed, there may be room to renegotiate your contract. This is only reasonable on a case-by-case basis, of course, but you may be surprised by the amount of flexibility they have. If you explain that you’re making budget cuts, some vendors may lower their rates in order to keep you on as a client.

Outsource Selectively

Functions like HR administration, IT support, and bookkeeping can often be handled by external providers at lower total cost than maintaining in-house staff. Again, this is only a good idea on a case-by-case basis, as it’s often not worth disrupting your entire workforce to save a small amount on salaries. However, if you’re a business owner deciding where to invest your money, outsourcing instead of hiring full-time staff can be a cost-efficient idea.

Centralize Multi-Entity Management

If you run a bunch of different subsidiaries, you know how hard it can be to track them all and compare their finances. With a solution like Slash, you can access each of those subsidiaries and their incoming/outgoing payments under a single login. Not only does this give you a more accurate picture of your overall G&A, but it also saves your finance team the time they’d spend manually cobbling all that data together.

Monitor Budgets Regularly

Lastly, make sure you’re closely tracking your budgets overall. Since G&A tends to rise slowly, you might not naturally notice a big change if you do a sweeping budget check every quarter. Instead, compare your expected G&A spend directly against your actual spend. Because most of these expenses are the same each month, it can be easy to see what stands out when you actually take a close look.

Smarter G&A Management With Slash

You can’t get rid of G&A expenses, but you can stop them from being an anchor to your company’s profitability. The more accurately you can watch and measure your spending, the easier it can be to minimize unnecessary expenses. That starts with Slash.

Slash is a business banking platform built to give finance teams a level of insight to expense tracking that they never had before. Every time your company spends money, whether on a corporate card or via another rail, Slash automatically categorizes it and reflects it on an integrated financial dashboard. That means you won’t have to wait until the end of the month to figure out how your G&A expenses are measuring up to your budget.

Our platform also allows users to create dedicated subaccounts for specific types of spending. Utility payments can come from one virtual account, while office equipment purchases can come from another. Each of these subaccounts can be configured with custom ceilings, meaning spending can’t grow out of control unchecked.

Along with expense management features, finance teams can take advantage of a wide array of other money movement and banking tools, including:

Business banking: FDIC-insured business checking, protected up to $150M through Column N.A.'s insured cash sweep network.²
Native cryptocurrency support: Send and receive USD-pegged stablecoins USDC and USDT across eight supported blockchains for faster, lower-cost global payments.⁴
Working capital financing: Access short-term financing with flexible 30-, 60-, or 90-day repayment terms that can be allocated to help bridge cash flow gaps.⁵
Diverse payment methods: Slash supports a wide range of payments, including card spend, global ACH, international wire transfers to over 180 countries via SWIFT, and real-time domestic payments through RTP and FedNow.
The Slash Visa® Platinum Card: The Slash Card is a corporate charge card that allows you to set customizable spending controls and issue unlimited virtual cards for handling team expenses, vendor payments, subscriptions, and more. Users can also earn up to 2% cash back on business purchases.

Learn more about how Slash can help you streamline your G&A management by reaching out today.

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Frequently Asked Questions

What is the difference between G&A expenses and SG&A expenses?

G&A (General and Administrative) expenses are the overhead costs required to run your business operations, such as rent, salaries, insurance, and utilities. SG&A (Selling, General, and Administrative) adds selling expenses on top of that, including sales commissions, marketing, and advertising. G&A is a subset of the broader SG&A category that appears on income statements. It's also helpful to remember that SG&A-specific costs are often variable expenses, while G&A costs are usually fixed expenses.

Where do G&A expenses appear on financial statements?

G&A expenses are reported under operating expenses on the income statement, typically below Cost of Goods Sold (COGS) and gross profit. They’re classified as indirect costs because they aren’t directly tied to producing a specific product or service, but they’re necessary for day-to-day business operations.

What are common examples of G&A expenses?

Common G&A expenses include: office rent and utilities, administrative salaries and wages, professional fees (legal, accounting), office supplies, business insurance and licenses, software subscriptions, and depreciation on administrative assets like office equipment and furniture.

Are all G&A expenses tax-deductible?

For the most part, yes. G&A expenses usually qualify as ordinary and necessary operating costs and are fully tax-deductible. To get these deductions, each expense must be documented and directly connected to the business's operation during the tax year. As long as you can demonstrate that these types of expenses are connected to your operations, you can likely deduct them.

What's the difference between G&A expenses and overhead?

G&A is a subset of overhead. "Overhead" broadly covers any indirect cost of running a business, while G&A specifically refers to administrative overhead. If you run a service business without any manufacturing, these two categories will have some overlap. If your company produces physical goods, overhead also includes indirect manufacturing costs, such as machine depreciation. These are often separate from G&A and classified differently on your income statement.