🎙️ Hey there, SaaSpreneurs!🎙️

Hey SaaS Metrics School community! 🌟 Ben Murray here, and I'm thrilled to bring you the latest insights from our newest episode.

Ever wondered what's lurking in your General and Administrative (G&A) expenses? 🕵️‍♂️ Whether it's finance, accounting, internal IT, human resources, or legal—G&A can often become a dumping ground for miscellaneous costs.

But don’t worry, we’ve got you covered! This episode is all about understanding and managing these expenses effectively. 📊

Did you miss my Ultimate SaaS KPI Checklist training? For a limited time, watch the replay and download the slides here (plus some other goodies).

You can also listen to this episode here.

PS. Some changes are coming to this newsletter. I’m going to make this newsletter private for my SaaS Metrics Foundation students. If you are currently subscribed, you are still in! If you unsub, you’ll have to join SMF to get back in.

📓Key Concepts to Learn💡

1. What is G&A and Where Does it Fit?

   • General and Administrative expenses (G&A) are the overarching costs that support the everyday operations of your SaaS business. These include finance, accounting, internal IT, HR, legal, and even the CEO's expenses. Typically, G&A is listed last in the OpEx area of your P&L statement.

2. Efficiency is Key: G&A as a Percent of Revenue

   • One crucial metric we focus on is G&A as a percent of revenue. This figure might be in the 30s for early-stage SaaS companies, but as the business scales, the target is to reduce it to around 20% or less. This efficiency gain signifies that the G&A expenses are well-managed and focused on supporting business growth.

3. The Perils of a G&A Dumping Ground

   • It's essential to avoid the temptation of coding miscellaneous or unrelated expenses to G&A, as this inflates G&A figures and obscures the actual cost structure of your business. Expenses should be directly attributed to their respective cost centers to maintain clarity and accuracy. Every month during close, I reviewed the expenses posted to G&A. It’s easy for staff to code their expense report to G&A.

4. Investment and Technology in G&A

   • It's not just about cutting costs; investing in technology for areas like accounting, invoicing, revenue recognition, cash collections, and contract management can enhance the efficiency of your G&A department. The goal is to support your business robustly while maintaining lean operations.

5. To Allocate or Not to Allocate Shared Services?

   • Should shared services like accounting, corporate real estate, or internal IT administration be allocated across other departments? While this is less common in private SaaS companies under $30 million ARR, it has become standard practice in larger organizations. Fully burdened P&Ls can provide a clearer financial picture by allocating these shared service costs.

Ready to supercharge your SaaS business? Join Ben’s SaaS community with over 6,000 members for exclusive content. Don't miss out — maximize your SaaS knowledge today!

If you found this episode helpful, make sure to tune in to future episodes of SaaS Metric School to broaden your knowledge of essential SaaS metrics and finance topics.

Got any burning questions or specific metrics you'd like us to cover?

Drop us a line, and we'll do our best to address them in upcoming episodes.

Until next time, keep hustling and measuring those metrics!

Best regards,

Ben Murray
Host of SaaS Metric School

P.S. Don't forget to subscribe to our podcast and share it with your SaaS business buddies. Together, let's conquer the world of SaaS metrics!

Apple Podcasts
Spotify
YouTube