What Is the Accounting Term G&A?

In accounting, the term G&A generally refers to the indirect overhead costs that are considered to be "general" and "administrative" expenses, hence the "G" and "A." G&A is money that is spent in starting and managing a business, including phone bills, building rental and employee salaries. G&A expenses are not directly connected to the production of either services or goods.

Many Costs

There are many possible general and administrative expenses involved in starting and running a business. These include accounting expenses, management salaries, employee salaries and investor advisement expenses. These are some of the main types of G&A costs that people have to consider before starting a business.

Operating Expenses

In income tax statements, G&A expenses are considered "operating expenses." Other types of operating expenses include utilities, hazard insurance and property taxes.

Cutting Costs

Many companies try to reduce their G&A by improving employee productivity, reducing operating expenses and designing effective operational structures. All of these things help to create a support structure that is cost-effective while still putting a company on a path toward profitability.

Other Options

Less common ways that can be considered in reducing general and administrative expenses include creating joint venture relationships with other businesses, outsourcing functions that are not strategic, using innovative and unique practices to lower costs and combining non-merchandise demands throughout the organization.

Other G&A Costs

Other possible G&A costs include legal fees, insurance, bid and proposal, interest expenses and development and independent research. These are lesser costs that many businesses might not consider upfront, but they will definitely be necessary down the line. All of these expenses should be thought out thoroughly if you're considering starting a business.

Resources

• General and Administrative Expenses (G&A)