Sales, general and administrative (SG&A) expenses

SG&A expenses (Selling, General and Administrative expenses) are the operating costs a company incurs outside the direct production of goods or delivery of services. They typically include sales and marketing, corporate management, finance, human resources, legal, IT, facilities and other support functions. SG&A forms an important part of operating expenses on the income statement and directly affects operating profitability. 

SG&A is separate from the cost of goods sold (COGS), which captures expenses directly associated with producing goods or delivering services. Understanding this distinction helps leaders assess the efficiency of support functions and determine whether overhead is growing appropriately relative to revenue, organizational complexity and business needs. 

SG&A benchmarks compare spending, staffing, productivity and service levels with relevant peers or leading organizations. These comparisons help identify where costs may be high, capabilities may be underfunded, or processes may need improvement. Organizations can then use process standardization, automation, shared services and operating model changes to improve efficiency while protecting the capabilities required for growth.