Distribution and Administrative Expenses

Distribution Costs
As the name suggest, this is the cost of transporting your product to your customers

Administrative Expenses
This includes expenditure on head office premises, administrative staff and overheads.

It is frequently impossible to categorise an item of expenditure as purely distribution or purely administrative.  When this is the case (for any item, not just distribution or admin expenditure), an apportionment of the expense across headings is allowed.  This is a very common occurence.  The basis for the apportionment calculation will vary depending on what the expenditure is and can be very straight forward or incredibly long-winded.  Indeed, for some accountants, in bigger companies, deciding on and making these apportionments can be the bulk of their full time job.


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