What are the administrative expenses?

Administrative expenditure is the costs associated with the management and general functions of the organization and are not directly related to a specific department. These costs, sometimes considered part of general business expenditure, can be for basic needs such as rental space for business, public services or office supplies. Administrative costs may also include the salaries of people who do not deal with sale, production or other departments within a company such as executives, secretaries and receptionists.

are not bound to one department

Sometimes they are referred to as general expenditures or operating expenditures, administrative expenditures include any costs that offer the organization a wide advantage. Their advantages as such cross lines of the department and allow many functions to take place. For the most part, any expenditure that is limited to a specific division or department of the company and offering only a small or no direct advantage for other areas of the organization is not considered asadministrative costs. Some expenses that seem to be tied to one department, such as accounting or legal, can be considered as administration because they benefit the whole organization.

utilities

One of the most common types of administrative expenditure in many organizations is the cost of public services. Fees for heating, cooling, power and water are traditionally referred to as administrative expenses. They could also include Internet access costs, fixed and mobile phone services. In some organizations, however, mobile phone services are classified as expenses for the department of employees who use these services.

Rent

Another example of administrative costs is the cost of renting or renting space for the organization. This may include renting retail space, renting a set of offices in abudy or lease of production fromas a few examples. The whole organization benefits from having room for operation, so it is not possible to connect these fees with a specific department.

salaries

salaries can also be considered as administrative expenses. This is especially true for executives and managers whose duties include many areas of the organization rather than a single department. More than one area benefits from the manager's efforts, so the costs are considered a general nature.

Excluded costs

regulations used to define administrative costs differ from one place to another, but there are some types of costs that are almost never defined as administrative. This includes all costs that can be directly associated with the sale and marketing efforts or research into the development of new products or services. Production costs, whether for equipment or raw materials, are probably not used to be administrative expenses.

Charity Organization

u charity orgBy anization and other profit organizations, administrative costs are often defined differently from the way that non -profit companies define them. In many cases, as administrative costs, all the money that is brought to the charity organization and the organized organization is calculated instead of turning into charity efforts or gifts. Therefore, all costs for the operation of the organization, such as salaries, marketing, rent and public services, would be called administrative expenses.