Why general and administrative expenses (G&A) matter to a first-time founder
These costs consume runway even when sales or production slow down. Separating them helps founders see the base cost of operating the company and identify avoidable overhead. Classification also affects budgets and management reporting, but accounting rules and company policy determine where borderline costs belong.
Examples of general and administrative expenses (G&A)
A startup spends ¥400,000 monthly on office rent, ¥150,000 on accounting and legal administration, and ¥600,000 on management salaries. It reports ¥1.15 million as G&A for its internal monthly view. Hosting used to deliver the product is classified elsewhere under its documented accounting policy.
Common misunderstanding
G&A is not every cost that feels general, nor is it identical to all operating expenses. Sales and marketing, research and development, and production may be separate operating categories. A manager’s salary can also be allocated differently when that person directly supports production or service delivery.
When to use it
Track it when building a budget, calculating runway or reviewing whether overhead is growing faster than the business. Use consistent account rules and investigate large changes, not arbitrary cuts. Ask an accountant how costs should appear in statutory statements and tax filings for the relevant jurisdiction.