How to Find Selling and Administrative Expenses

Companies incur various costs to operate, and understanding these expenses is fundamental to grasping a company’s financial health. Selling and administrative (S&A) expenses are two significant categories of operational costs on a company’s income statement. These expenses provide insight into the efficiency with which a business markets, sells, and manages its daily activities, helping stakeholders understand how resources are allocated to support overall business functions and generate revenue.

What Are Selling Expenses?

Selling expenses are costs directly associated with marketing, selling, and distributing a company’s products or services. These expenses are incurred to generate sales and deliver goods.

Common examples include sales commissions, advertising costs, and marketing expenses. Shipping and delivery costs, salaries and benefits for sales department staff, and travel expenses for sales personnel are also considered selling expenses.

What Are Administrative Expenses?

Administrative expenses, often referred to as general and administrative (G&A) expenses, are the costs for the overall management and support of a business. These expenses are not directly tied to production or sales, but to the general operations required to run the company.

Examples include salaries for executive, human resources, finance, and other administrative staff. Other common costs are office rent, utilities, legal and accounting fees, office supplies, and depreciation on administrative assets such as office furniture and equipment.

Finding These Expenses on the Income Statement

Selling and administrative expenses are typically found on a company’s income statement, a key financial document that reports a company’s financial performance over a specific period. These expenses are generally listed below the “Gross Profit” line, as they are part of a company’s operating expenses.

Companies may present these expenses in different ways on their income statements. Often, selling and administrative expenses are combined into a single line item labeled “Selling, General, and Administrative Expenses” (SG&A). Alternatively, some companies may choose to separate them, listing “Selling Expenses” and “General & Administrative Expenses” as distinct line items. In other cases, they might be grouped under a broader category such as “Operating Expenses,” with further subcategories for clarity.

The general public can access the income statements of publicly traded companies through several resources. Annual reports, specifically the Form 10-K, and quarterly reports (Form 10-Q) filed with the U.S. Securities and Exchange Commission (SEC) are primary sources. These filings are readily available through the SEC’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval) database, which can be searched by company name or ticker symbol. Additionally, many companies provide their financial statements, including income statements, in the investor relations section of their corporate websites.

Understanding the Details of These Expenses

While the income statement provides an aggregated view of selling and administrative expenses, companies maintain more detailed internal records to manage and analyze these costs effectively. This internal granularity allows management to track spending, identify efficiencies, and make informed financial decisions beyond what is publicly reported. The overall SG&A figure on an income statement is a summary of many individual cost components.

Within the broad category of selling expenses, internal accounting systems often track specific sub-accounts. These might include distinct categories for direct advertising costs, sales force salaries and commissions, and expenses related to trade shows or promotional events. Other detailed selling expense categories could encompass travel expenses specifically for sales-generating activities, and costs associated with maintaining sales technology and tools.

Similarly, administrative expenses are broken down into numerous sub-categories for internal tracking. These detailed accounts can include human resources costs such as recruitment fees and employee benefits, information technology expenses for software licenses and hardware maintenance, and executive compensation. Other specific administrative costs might involve office supplies, utilities for general office space, and professional fees for legal, auditing, or consulting services. This granular internal reporting helps businesses understand the composition of their overhead and operational support functions.