When most Australians think about business costs, marketing blitzes or product launches might come to mind. But behind every successful operation are the general and administrative expenses (G&A) quietly powering the engine room. These costs—often overlooked in the headlines—can make or break a business’s profitability, particularly in an era of rising compliance requirements and economic uncertainty.
What Falls Under General and Administrative Expenses?
General and administrative expenses cover the costs that keep your business ticking, regardless of how many widgets you sell or clients you serve. They’re the backbone—necessary but not directly tied to sales or production.
- Salaries and wages for executive and admin staff (think HR, finance, office managers)
- Office rent and utilities
- Insurance (public liability, professional indemnity, etc.)
- Professional services like legal and accounting fees
- IT and software subscriptions (from cloud accounting to cyber-security platforms)
- Stationery, postage, and general office supplies
- Corporate travel and training
In 2025, the average Australian SME faces increasing G&A costs, driven by higher cyber insurance premiums, rising commercial rents in major cities, and the ongoing need for digital transformation.
2025 Updates: New Pressures and Opportunities
This year, Australian businesses are feeling the squeeze as government regulations tighten and inflation nudges up operational costs. Several trends are shaping the G&A landscape:
- Mandatory ESG reporting: From July 2025, companies with annual turnover above $50 million must comply with enhanced environmental, social, and governance (ESG) disclosure rules. This means more investment in compliance staff and software.
- AI and automation adoption: Businesses are increasingly automating routine admin functions—think accounts payable or HR onboarding—to curb wage growth and free up resources.
- Remote work infrastructure: With hybrid work here to stay, firms are investing more in secure cloud-based platforms, which show up as G&A rather than direct operating costs.
- Cybersecurity escalation: Following a spate of high-profile breaches in 2024, cyber insurance costs have jumped, and businesses must now budget for regular security audits as part of their G&A.
For example, a Sydney-based professional services firm recently shifted to a paperless office, reducing stationery and storage expenses by 30%. However, their cloud subscription and IT security costs doubled, reflecting the new normal for G&A allocation.
Managing G&A for a Healthier Bottom Line
While you can’t eliminate general and administrative expenses, you can manage them smarter. Here are practical strategies for 2025:
- Benchmark regularly: Compare your G&A ratio (G&A as a percentage of revenue) to industry peers. The Australian Bureau of Statistics and business chambers often publish sectoral benchmarks.
- Embrace tech—but track ROI: Don’t just add new software; measure its impact on admin efficiency and cost reduction.
- Negotiate supplier contracts: With office leases and insurance, review terms annually and shop around for better deals—especially as the commercial property market softens in some cities.
- Outsource non-core functions: Consider external payroll, legal, or IT support where it’s cost-effective and allows you to focus on your core business.
- Foster a cost-aware culture: Engage employees in spotting waste and improving processes—small changes add up quickly.
Remember, G&A isn’t just a ‘necessary evil’. It’s an investment in your business’s stability, reputation, and growth potential. Well-managed G&A can free up capital for innovation, expansion, or simply weathering the next economic storm.
Conclusion
General and administrative expenses are the unsung heroes of every Australian business. While they rarely make the news, staying on top of G&A is more important than ever in 2025’s fast-changing business landscape. Review your expenses regularly, adopt smart tech, and keep your finger on the regulatory pulse to ensure your business remains resilient and competitive.
