![]() Here’s how to make sure your SG&A expenses don’t get out of control: Go through all of them, line by line When left unchecked, it can have a negative impact on your company’s profitability. ![]() Why? Because it’s usually one of the first places where businesses get sloppy with their spending. When an external business advisor looks at a small business’ books, one of the first places they’ll look for cost-cutting opportunities is SG&A. With a handle on the SG&A meaning, let’s dig into how you can use this information for your business. Legal fees (for incorporating a business, settling a lawsuit, etc.).Non-operating expenses are anything you spend money on that isn’t related to the day-to-day operations of your business, including: These are usually listed separately from SG&A, but income statements will sometimes bundle them together with SG&A. Fees paid to on-staff accountants, IT personnel, lawyers, etc.Salaries of company executives, administrative staff, and human resources.Small businesses typically don’t spend very much money administering their business, but if they do, their administrative expenses might include things like: These are anything your business spends money on that has nothing to do with COGS, selling, or administration. brochures, business cards, promotional videos, landing pages, etc.) Any costs associated with promotional materials (i.e.Google and social media ads, newspaper advertisements, billboards, etc.) Travel and entertainment costs for business trips.Payroll taxes associated with sales or marketing staff.Any wages you pay to a salesperson or marketer.Indirect selling expenses are incurred when the product is manufactured or the service is conducted, and after. Any sales commissions you pay to a salesperson. ![]() They can be broken down into direct and indirect selling expenses:ĭirect selling expenses are incurred when a product or service is sold. These are any sales or marketing expenses your business incurs. In some cases, certain non-operating expenses might appear under SG&A as well. Three types of expenses are typically listed as line items under the SG&A category: selling expenses, general expenses, and administrative expenses. ![]()
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