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Get to know about the duties, responsibilities, qualifications, and skills requirements of a cost accountant. Feel free to use our cost accountant job description template to produce your own. We also provide you with information about the salary you can earn as a cost accountant.

 

Who is a Cost Accountant?

A cost accountant might imply different things to different firms, but they are often in charge of budgeting, operational costs, and purchasing. These experts may have a variety of responsibilities and job titles depending on their employer. Cost accountants frequently require a wide skill set and knowledge base to excel in the field due to the flexible and varying nature of the job and its daily demands. A cost accountant is a financial expert who calculates the true costs of providing a service or producing a product. They do it by examining all of the relevant costs throughout the supply chain. The goal of cost accounting is to analyze profitability and prepare budgets. According to the Bureau of Labor Statistics, cost accountants’ financial data assists executives in determining whether items, services, procedures, or departments are the least and most profitable. While all accountants evaluate, examine, and create financial papers, the types of documents they work with and the environments in which they work might be quite different. Even in a specialist position like cost accounting, employment roles and responsibilities might change depending on the company. In most cases, cost accounting entails the management of an organization’s whole financial data.

Cost accounting is a type of managerial accounting that tries to capture a company’s entire cost of production by measuring both variable and fixed costs, such as a leasing fee. The internal management team of a corporation uses cost accounting to determine all variable and constant expenses connected with the manufacturing process. It will first measure and record these expenses individually, then compare input costs to output results to aid in financial performance measurement and future business decisions. In cost accounting, there are many different sorts of costs, which are listed below.

 

Types of Costs

Fixed Costs: Fixed costs are costs that remain constant regardless of output volume. These are typically items like a building’s mortgage or lease payment, or a piece of equipment with a fixed monthly depreciation rate. These costs would not alter if output levels increased or decreased.

Variable Costs: Variable costs are costs that are linked to a company’s output level. For example, a floral business increasing its floral arrangement inventory for Valentine’s Day will pay more when purchasing more flowers from the local nursery or garden center.

Operating costs: Operating costs are expenses related to a company’s day-to-day operations. Depending on the circumstances, these costs can be constant or variable.

Direct costs: Direct costs are expenses incurred directly in the production of a product. The direct costs of the finished product include the roaster’s labor hours and the cost of the coffee beans if a coffee roaster spends five hours roasting coffee.

Indirect Costs: Indirect expenses are those that cannot be traced back to a specific product. The energy cost of heating a coffee roaster, for example, would be indirect because it is inexact and difficult to link to particular items.

Cost accountants are well-versed in all cost accounting procedures as well as the software systems that support them. However, because there are four different types of cost accounting systems, cost accountants may specialize in one or more of them.

Standard Costing System: Standard costing system is a typical cost accounting system that allocates an average cost to each product’s direct expenses, such as labor, materials, and overhead. Because of its straightforward approach to standardization, this method of cost accounting is very popular among small enterprises.

Activity-Based Costing: The activity-based costing compares the direct expenses connected with distinct product lines to determine fixed and variable costs.

Throughput accounting: in order to increase output, throughput accounting focuses on enhancing efficiency by decreasing process and production bottlenecks.

CVP Cost Accounting: A cost-volume-profit (CVP) analysis determines the variable and total fixed costs in relation to product quantity.

 

Cost Accountant Job Description

Below are the cost accountant job description examples you can use to develop your resume or write a cost accountant job description for your employee. Employers can also use it to sieve out job seekers when choosing candidates for interviews.

The duties and responsibilities of a cost accountant include the following:

• Develops and analyzes operational budgets: Cost accountants investigate strategies to improve organizational budgets by developing and analyzing operational budgets. They may examine current expenditures and look for ways to cut costs or improve efficiency. Accountants can also create and maintain their own budgets, for which they produce reports and show how closely actual activities matched the budgets proposed.
• Analyzes financial statements: Cost accountants are frequently the financial specialists in their firms, which allows them to analyze financial figures and documentation. Employers may rely on the expertise of their accountants, asking them to review papers for accuracy and legal compliance. Orders, payments, tax information, and investment information may all be examined.
• Examines accounting books: Accounting books can be fairly complicated, and accuracy requires an expert eye. Cost accountants may be tasked with keeping track of an organization’s accounting, including payroll, benefits, and accounts payable/receivable. Accountants may be asked to evaluate the books at particular intervals to ensure that they adhere to all guidelines and regulations.
• Offers reports and solutions: A cost accountant may be required to present their solutions to management after assessing an organization’s operational costs and budgets. This can entail writing and presenting reports, both written and oral. They must communicate their solutions in a way that others can comprehend and value.
• Prepares or at least examines all financial papers: Cost accountants are frequently called upon to prepare or at least review all financial documentation for businesses. This guarantees that all regulations, procedures, and laws are followed, allowing the accountant to see any faults and find areas for cost-cutting or efficiency improvements.
• Assists with investments: Cost accountants may take up the management of investment planning for their companies if their organizations do not have separate financial managers or advisors. This could range from just communicating with an investing firm to actively selecting investments and presenting them to management.
• Collects, validates, and disseminates data for financial transparency and process improvement.
• Begins the month-end closure and reporting processes, which they then present to management.
• Sets costs for company activities such as labor, shipping, production, and administration at a consistent level.
• Works with accountants to make the most of data from ERP and CRM systems.
• Does regular reconciliations of various cost reports against software systems to ensure accuracy.
• Performs physical inventory inspections with the help of personnel and keeps an eye on inventory management systems.
• Supports financial personnel by assisting with payables, invoicing, and capital expenditures.

Qualifications of a Cost Accountant

• A bachelor’s degree in accounting or a closely related subject is required (essential).
• Accreditation by the International Accounting Standards Board (IASB) (essential).
• A license as a certified public accountant (CPA) is required (essential).
• 2 years of experience in cost accounting (essential).
• Accounting fundamentals are well-understood.
• Background in cost systems.
• Strong conceptual and problem-solving abilities. Analytical thinker.
• Exceptional organizing skills and meticulous attention to detail.
• Working under duress and meeting tight deadlines is a must.
• Ability to operate both independently and in a group.
• Excellent communication, report-writing, and IT skills.

 

Essential Skills

1. Strong accounting knowledge: As a cost accountant, you’ll be responsible for everything from calculating fixed and variable costs to implementing various cost accounting methods. You’ll need to brush up on the fundamentals of cost accounting, such as the matching principle.

• Conservatism is a principle.
• The price (direct costs, indirect costs, fixed costs, variable costs, inventoriable costs).
• Margin of contribution.
• Range that is relevant.
• The formula for calculating the breakeven point.
• Analysis of cost accounting.
• Costing based on activity (ABC).
• Gross margin and contribution margin are two different types of margins.
• Asset management is the management of one’s assets.
• Business awareness is important.
• Accounting procedures are followed.

2. Strong analytical skills: A typical day in the life of a cost accountant entails spending a significant amount of time consolidating and analyzing the company’s reports and data. Because a cost accountant’s job is to look for new and unusual ways to increase profitability by decreasing expenses, having a strong analytical mind is a must. Working on your analytical skills will also assist you in completing the following tasks:

• Successful assessment of potential commercial endeavors, investments, contracts, and so on.
• Identifying and incorporating appropriate cost drivers
• Increase the value of the budgeting process
• Improve your decision-making skills
• Ascertain correctness and avoid any potential mismatches.

3. Knowledge of technology and technical abilities

Cost accountants need to be computer savvy because they are required to use a variety of accounting software and tools. Knowing how to use IT-related technology puts you ahead of the competition. You will be expected to use the following software and tools:

• ERP software Quickbooks Enterprise 21
• KPMG Spark
• Zoho Books
• Wave Financial
• Microsoft Excel
• Oracle

4. Communication, collaboration, and presentation skills: Cost Accountants may be required to work with large groups, external vendor partners, stakeholders, financial accountants, risk managers, and others, depending on the product. As a result, mastering your business communication abilities and representation strategies is essential. The following are some of the benefits of improving your communication skills:

• Explain the company’s products or services to clients and stakeholders in a clear and concise manner.
• Develop more positive relationships with clients, which can aid in the development of better cost-cutting deals.
• Make competent presentations and write detailed reports.
• Assistive in negotiations

5. Organizational Skills: Cost accountants must be able to organize a wide range of financial documents.

Apart from the 5 aforementioned major skill-sets, you must also work on the following essential cost accounting traits:

• Capital budgeting
• Risk management
• Statistics
• Corporate taxation
• Ethics
• Auditing
• Macroeconomics
• Costing
• Problem-solving
• Research-oriented
• International trade, mergers, and acquisitions working patterns
• Forecasting
• Strategic decisions making
• Performance management
• Management Skill

 

How to Become a Cost Accountant

These are the steps typically required to pursue a career as a cost accountant:

1. Pursue an education

A bachelor’s degree in finance, accounting, business administration, or a closely related discipline is usually required for this position. Look for open cost accounting employment in your area and figure out what level of schooling you’ll need to get the job. To get that degree of education, you must first obtain a high school diploma. Focus on advanced math courses if you’re still in high school. Cost accountants are often required to have a Bachelor’s degree in accounting, business administration, or a closely related discipline. Financial analysis, business organization, economics, banking, business law, and information technology are all areas of study for students in these subjects. The following are some of the core classes that students in these programs take:

• Macroeconomics
• Financial accounting
• Accounting principles
• Auditing
• Statistics for decision-making
• Corporate taxation
• Ethics

Many organizations prefer candidates with a master’s degree in accounting or a master’s degree in business administration with a specialty in accounting.

2. Gain experience

Look for entry-level employment in an accounting or finance department, as this position often requires candidates to have a minimum of five years of experience. Look for internship possibilities where you may shadow a cost accountant if you are still earning a bachelor’s degree. Aspiring cost accountants can pursue entry-level positions in accounting firms or corporate finance departments to gain the necessary training. Internships are excellent chances for individuals earning a degree to build the skills and experience required for these positions. Internships provide students with the opportunity to network with accounting professionals who may be able to assist them in finding employment following graduation.

3. Obtain a certification

Professional credentials can help you stand out from the crowd, however, they aren’t always essential. Consider obtaining a qualification to make yourself more appealing to prospective employers. While cost accountant certification is optional, it certifies your talents and may offer you an advantage over other candidates fighting for the same positions. The following are some of the greatest certifications for cost accountants:

Certified Management Accountant

This professional certification, offered by the Institute of Management Accountants, confirms competence in financial planning and analysis, decision support, control, and professional ethics. Candidates must pass the CMA test, which is divided into two parts, in order to obtain this internationally recognized credential. Financial planning, performance, and analytics are covered in part one, while strategic financial management is covered in part two. To be eligible, you must be a current IMA member, pass both portions of the exam, and have a bachelor’s degree or professional certification. You must also have two years of experience in financial management or management accounting and adhere to the IMA’s declaration of ethical professional behavior.

Certified Public Accountant

This certification is given by the American Institute of Certified Public Accountants to persons who meet the educational and experience criteria as well as pass a test. Because CPAs have more practicing rights and privileges, many accounting companies will only recruit them. Each state’s Board of Accountancy is responsible for granting certification and licensure. Candidates must finish 150 semester hours of college education, which may include some graduate-level material, as one of the usual criteria. Candidates must pass four different tests in 18 months to receive this certification.

4. Update your resume

Update your resume once you have obtained the requisite levels of education, experience, and any related certifications. Highlight the transferrable talents that can be used in a cost accountant role for each job entry. As much as feasible, include quantifiable accomplishments you’ve achieved.

5. Fill out job applications

Look for open cost accountant employment in your area on the internet. Based on your experience and educational background, determine which positions you are best qualified for. For each job you apply for, use your most recent resume and a personalized cover letter.

 

Where to Work as a Cost Accountant

Accounting job titles can change and apply to a variety of jobs due to this professional flexibility. Payroll accountants, public accountants, and bookkeepers are all options for cost accountants. Even within the subject of cost accounting, occupational titles such as management accountants, corporate accountants, and industrial accountants can be found. Government auditors, budget analysts, management analysts, and cost estimators are all positions that cost accountants can hold. Professionals with financial competence and knowledge of the industry’s norms and regulations are needed for these jobs. Because of these differences, cost accountants should search for jobs based on roles and responsibilities rather than job titles. Some cost accountants start their own consulting firms or work for a public accounting firm.

Cost accountants’ work opportunities are as diverse as the rest of the profession. Professionals can shape their professions based on the courses they attend in school, their personal interests, and their previous work experience. Trade groups, financial organizations, government, consulting services, and accounting services are some of the most prevalent venues open to these specialists. According to the Bureau of Labor Statistics, more accountants work in accounting services and as third-party cost accountants than anyplace else. As third-party consultants, cost accountants that work with consulting firms often undertake cost analysis and management duties for corporations. Cost accountants may work for the government as auditors of policies and regulations. As in-house professionals in trade and financial organizations, cost accountants develop and analyze operations budgets for their employers.

 

Cost Accountant Salary Scale

As of February 25, 2022, the average Cost Accountant I salary in the United States is $63,925, while the range frequently ranges between $57,559 and $70,789. Salary ranges rely on a variety of things, including schooling, certifications, supplementary talents, and the number of years you’ve worked in your field. In Nigeria, a Cost Accountant earns roughly 230,000 NGN per month on average. Salaries range from 122,000 NGN (lowest) to 350,000 NGN (highest). This is the monthly average pay, which includes housing, transportation, and other benefits. Salary for a cost accountant varies greatly depending on experience, abilities, gender, and region.

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