Administrative expenses budget
In one sentenceA plan of the expected general and administrative expenses for the coming period, such as rent, management salaries, and utilities, divided by month.
Simply put
Most of these expenses are fixed and do not change with sales volume, so they are easy to estimate from current contracts and salaries.
Divide them across the months according to when they are actually paid: annual rent paid in advance affects cash differently from how it affects profit.
Worked example
A contracting company prepares its administrative expenses budget for next year.
Office rent60,000 SAR
Management salaries240,000 SAR
Electricity and telecommunications24,000 SAR
Other expenses36,000 SAR
Annual budget (30,000 SAR per month)360,000 SAR
Don't confuse it with
Selling and distribution expensesSelling expenses are tied to sales, such as commissions and shipping; administrative expenses relate to running the business in general.