Financial Glossary
Selling, General, and Administrative Expenses (SG&A)
Selling, General, and Administrative Expenses (SG&A) are the operating costs of running a business that are not part of the cost of goods sold. They include items like marketing and sales salaries, rent, office expenses, insurance, and administrative overhead. On the income statement, SG&A sits below gross profit and is subtracted to help arrive at operating income.
Problem & Application
For hospitality and STR operators, SG&A is where you see what it really costs to run the business beyond cleaning and supplies, including listing fees, software, insurance, and back-office labor. Tracking SG&A as a percentage of revenue shows whether overhead is creeping up faster than sales, a common warning sign as a small operation scales. Keeping COGS and SG&A cleanly separated in your chart of accounts is what makes that analysis trustworthy.
In Short
SG&A is the lever owner-operators control most directly, since these costs are largely discretionary. Watching it as a ratio, not just a dollar figure, keeps overhead in line with growth.