General and administrative (G&A) expenses are crucial for understanding a SaaS company’s financial health, covering costs like HR, legal, and utilities that don’t directly tie to product or sales functions.
For SaaS companies, especially those scaling quickly, it’s essential to accurately track and categorize general and administrative (G&A) expenses. These costs directly impact your bottom line, and monitoring them over time is key to building a financially healthy business.
G&A expenses can balloon fast—sometimes reaching up to 30 percent of operational costs—especially in high-growth environments where investments are happening across the board. Often, this is the result of either unchecked spending or a misalignment between costs and the company’s growth rate.
Ideally, as your revenue increases, your G&A as a percentage of total spend should decrease. That’s the power of economies of scale—but only if expenses are tracked properly.
The challenge? Poor expense categorization in your profit and loss (P&L) statement. Without clear categories, managing G&A is like trying to finish a puzzle without the box image: you’re making assumptions instead of following a clear plan.
To act as a strategic guide for the business, finance teams need a full, real-time view of all expense categories—G&A included. That’s where a clean, consistent approach to financial planning and analysis (FP&A) comes in.
Start by reviewing and organizing your G&A spend. Define clear categories, set benchmarks, and track trends. That clarity gives you the insight needed to drive smarter decisions—and support growth that’s both ambitious and sustainable.
What are general & administrative expenses?
General and administrative (G&A) expenses cover the back-office functions that keep your business running—but aren’t tied to specific revenue-generating activities. In SaaS, this typically includes costs from teams like finance, HR, legal, and accounting, along with overhead such as rent, utilities, business insurance, and software tools used company-wide.
G&A also includes non-department-specific payroll, professional services like legal and accounting fees, travel, and license or permit costs. As your business scales, tracking G&A carefully is essential—because these expenses can have a growing impact on your bottom line.
On the other hand, expenses tied directly to operations or customer-facing teams—like R&D, marketing, sales, or customer success—don’t fall under G&A. Properly categorizing these costs gives you a more accurate view of your financial health and helps ensure your budgeting and reporting align with your growth strategy.
G&A expense categories
G&A expenses include a mix of fixed and semi-variable costs, which gives you room to adjust as your business evolves. That flexibility makes G&A a valuable area to explore for efficiency. By reviewing these expenses closely, you can identify savings opportunities and ensure resources are being allocated where they’ll have the most impact.
Fixed expenses
Some general and administrative (G&A) costs are fixed, meaning they remain consistent regardless of new sales or customer growth. For example, even if you don’t sign any new accounts in November, you’ll still need to pay for rent, utilities, and continue supporting existing customers. These baseline costs make it important to plan carefully and ensure your operations remain sustainable.
Semi-variable expenses
Some G&A expenses are semi-variable—meaning they shift based on your company’s evolving needs, not necessarily in direct response to revenue or customer growth. These costs often fluctuate based on discretionary investments, rather than operational necessity.
For example, purchasing a high-end projector might improve internal meetings or client presentations, but it doesn’t impact your software’s core functionality.
If you’re looking to improve cash flow, start by reviewing these types of expenses. They’re often lower-stakes areas to trim without disrupting your product or customer experience.
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Key takeaways
- General and administrative (G&A) expenses are crucial for understanding a SaaS company’s financial health, covering costs like HR, legal, and utilities that don’t directly tie to product or sales functions
- Proper categorization of G&A expenses is essential for accurate financial planning and avoiding unnecessary costs. This clarity supports better decision-making and boosts profitability
- SaaS companies can optimize G&A expenses by focusing on both fixed and semi-variable costs, offering flexibility and opportunities for cost savings
- Effective tracking and management of G&A expenses can enhance operational efficiency and ensure alignment with growth strategies
- Reducing G&A costs frees up resources for strategic initiatives such as product development and customer acquisition, contributing to long-term business success
Why G&A expenses are important for SaaS businesses to deeply understand
In SaaS finance, accounting comes with its own set of challenges—especially in a subscription-based model. When G&A expenses are miscategorized, it becomes harder to identify cost-saving opportunities or protect revenue—particularly during periods of rapid growth when every dollar matters.
Accurate data is the foundation of good decision-making. If you’re unclear about where certain expenses belong—including G&A—your financial insights can quickly become misleading, making it harder to stay on course.
That’s why understanding and tracking G&A expenses is so important for CFOs and finance teams. It’s not just about reporting—it’s about gaining visibility to manage spend, control costs, and support long-term growth.
How to calculate G&A costs
To calculate general and administrative (G&A) costs, start by identifying which expenses fall into this category. Once you’ve confirmed which costs qualify, gather the data for your chosen timeframe—monthly, quarterly, or annually—and sum them up to get your total G&A spend.
Here’s a quick example. Let’s say your company earned $500,000 in total revenue in August. Your G&A expenses for the month included:
- Rent: $10,000
- Executive/admin salaries (non-departmental): $100,000
- Utilities: $2,500
- Office equipment: $1,500
- Insurance premiums: $2,000
- Non-sales-related travel: $3,000
- Total G&A costs = $119,000
To track performance over time, you can also calculate your G&A as a percentage of revenue (or operating expenses). This makes it easier to monitor trends or benchmark against industry norms.
- G&A percent = ($119,000 / $500,000) x 100 = 23.8 percent
Tracking your G&A percentage helps you assess whether expenses are scaling appropriately as your business grows—and where there may be opportunities to optimize.
4 ways to reduce G&A costs
Optimizing G&A costs is a smart move for SaaS companies. It frees up budget for growth initiatives like product development and customer acquisition—while also boosting operational efficiency and profitability.
Here are a few practical ways to reduce G&A spend and strengthen your financial foundation:
1. Track your G&A costs closely
Once you’ve categorized your G&A costs, take time to review the data closely. You might spot seasonal trends or unusual spikes that warrant a deeper dive. Calculating your G&A percentage also allows you to benchmark performance—either against other SaaS companies or your own internal targets—to track progress and identify areas for improvement over time.
2. Audit your costs over time to see where your money goes
Regularly reviewing G&A expenses can uncover inefficiencies or overlapping costs across your operations. Identifying and eliminating unnecessary spend helps streamline workflows and protect your bottom line. More importantly, having a clear, accurate view of G&A ensures your financial decisions are grounded in real data—not assumptions.
3. Use FP&A tools to spot and eliminate financial redundancies
Modern FP&A software can automate expense categorization, track trends over time, and surface key insights with visual dashboards. These tools are especially helpful for SaaS companies looking to monitor G&A costs and other core metrics in real time. By making it easier to identify outliers and patterns, you can act faster to reduce inefficiencies and improve financial visibility.
4. Implement spend controls
Before you can reduce spending, you need visibility into where your money is going. Once you’ve reviewed your G&A expenses, take steps to manage them more intentionally. This might include setting clear budgets, introducing approval workflows for high-cost items, limiting discretionary spend like travel and entertainment, and negotiating better terms with vendors. Small changes can lead to meaningful improvements in financial efficiency.
G&A expense FAQs
What does G&A stand for?
G&A stands for general and administrative expenses in financial planning and analysis (FP&A). These include the day-to-day costs of running your business—such as HR, finance, legal, accounting, rent, utilities, non-departmental payroll, and business licenses—all essential to supporting operations behind the scenes.
Are wages and salaries included in G&A costs?
Wages and salaries are included in G&A costs when they’re associated with G&A functions. For example, the accounting team would fall under the G&A umbrella, so wages and salaries for all full-time hires in the accounting department would be included.
What is the difference between G&A and operating expenses?
G&A expenses represent overhead costs that don’t tie directly to specific business functions like production, sales, or R&D. Instead, they support the company’s overall operations—helping to keep the business running behind the scenes.
In contrast, operating expenses include all costs tied to a company’s core activities. This covers the cost of goods sold (COGS) or, in SaaS, cost of services, along with broader operational costs—G&A included. In other words, G&A is a subset of total operating expenses.
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Is G&A a fixed or variable cost?
G&A includes both fixed and semi-variable costs. Examples of fixed G&A costs include office space, and utilities, whereas office equipment that is purchased based on new business needs is considered semi-variable.
What is the difference between G&A and SG&A?
Selling, general, and administrative (SG&A) expenses include G&A expenses plus any expenses related to selling the product, such as sales and marketing expenses or advertising.
