Advanced English Dialogue for Business – And administrative expenses

Listen to a Business English Dialogue about And administrative expenses

Austin: Hi Layla, do you know what administrative expenses are in business and finance?

Layla: Not really. What do they include?

Austin: Administrative expenses are the costs associated with running a business’s day-to-day operations, such as salaries for administrative staff, office rent, utilities, and office supplies.

Layla: Ah, I see. So, they’re the expenses needed to keep the business running smoothly?

Austin: Exactly. They’re essential for maintaining the infrastructure and support functions of the business.

Layla: Are administrative expenses different from operating expenses?

Austin: Operating expenses typically include both administrative expenses and other costs directly related to the production of goods or services, like raw materials or manufacturing costs.

Layla: I understand. So, administrative expenses are a subset of operating expenses.

Austin: Yes, that’s correct. Administrative expenses focus specifically on the costs of managing and running the business, rather than the costs of producing goods or services.

Layla: Are there any strategies businesses use to reduce administrative expenses?

Austin: Yes, businesses often look for ways to streamline operations, automate tasks, and negotiate better terms with suppliers to reduce administrative costs.

Layla: That makes sense. So, it’s about finding efficiencies and optimizing resources.

Austin: Exactly. By managing administrative expenses effectively, businesses can improve their overall profitability and competitiveness.

Layla: Are administrative expenses fixed or variable?

Austin: They can be both. Some administrative expenses, like rent, may be relatively fixed, while others, like office supplies, may vary depending on business activity.

Layla: I see. So, it’s important for businesses to carefully manage both fixed and variable administrative expenses.

Austin: Absolutely. Effective cost management is essential for the long-term success of any business.