Cost Analyst Job Description, Skills, and Salary
Get to know about the duties, responsibilities, qualifications, and skills requirements of a cost analyst. Feel free to use our cost analyst job description template to produce your own. We also provide you with information about the salary you can earn as a cost analyst.
Who is a Cost Analyst?
Cost analysts are in charge of managing a business’s resources, analyzing costs, reporting to management, and assisting executives in making the best decisions possible. Cost Analyst resumes usually contain the following duties: balancing costs and benefits, implementing process improvement solutions, evaluating performance, and determining unit costs. The most effective resume samples highlight skills such as accounting expertise, analytic thinking, superior math abilities, communication abilities, and research and presentation abilities. The majority of candidates for this position hold a bachelor’s degree in accounting, finance, or statistics.
A cost analyst analyzes a business’s spending habits and creates graphs depicting the costs of projects. A cost analyst will also use this information to determine the cost of future projects and ways to reduce costs to increase the company’s profit. He or she may also determine the costs of the competition for the analyst’s company to gain an advantage. A bachelor’s degree in business, finance, or accounting is the typical educational requirement for this position, which also requires the employee to be proficient with cost-analysis software, spreadsheets, and databases.
A cost analyst’s job is to sift through a company’s financial records and determine how much money is being spent. Typically, this is divided into quarterly costs, annual costs, project costs, and other similar categories. Additionally, the analyst must ensure that all costs are accurate. Otherwise, subsequent calculations and projections will be incorrect.
Apart from determining past and present costs, a cost analyst also determines future costs. By comparing historical and current costs and estimating future supply costs, the analyst should be able to accurately estimate future project costs for the company. This enables the company to set aside funds for the project and to plan for it accurately.
Cost reduction is another aspect of the cost analyst’s job. After determining how money is allocated, he or she may discover more efficient ways to spend it. If this is discovered, the cost analyst will inform his or her supervisors, who will be able to reduce costs without compromising the quality of the product. This means that the analyst maximizes profit by reducing unnecessary or inefficient costs.
A cost analyst may be required to ascertain the costs of the competition. He or she may want to learn where the competitor’s money is going and how much is spent on marketing, supplies, and other similar expenses. Management uses this data to determine how to respond to competition, particularly during price wars or when attempting to develop a better or more affordable product.
Analysts are typically required to have at least a bachelor’s degree to be hired. There is no degree in cost analysis. Typically, this job requires a degree in accounting, finance, or business. While in college, prospective cost analysts will typically gravitate toward courses on cost analysis and budgeting.
A cost analyst’s software may be extremely complex or simple enough for home users to use. On the more complicated end of the spectrum, there are programs designed specifically for financing and budgeting that mine cost data and generate financial forecasts. A spreadsheet and database are examples of simpler software that an analyst may use, but this is uncommon.
Cost Analyst Job Description
Below are the cost analyst job description examples you can use to develop your resume or write a cost analyst 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 analyst include the following:
- Making recommendations and implementing changes to operating procedures to increase the efficiency of payment and procurement processes.
- Providing analytical support for departmental projects as needed.
- Coordinating the management to ensure that cost forecasting reports are checked and applied consistently.
- Surveilling and documenting actual and estimated reports.
- Keeping track of project budgets and expenditures.
- Analyzing data to assist in cost reduction efforts across all operations.
- Analyzing the market to determine growth opportunities and potential risks.
- Contributing to the development of annual operating plans and budgets, as well as the cost estimation of new products, including economic analysis.
- Making suggestions for cost-cutting measures.
- Analyzing expenditures and cost transactions; ensures that transactions are accurately recorded and appropriately assigned to projects and departments.
- Providing detailed financial analysis and expense reports, which include cost breakdowns for individual projects, forecasts for remaining expenses, and opportunities for efficiency improvement.
- Conducting market research as necessary to make recommendations regarding pricing or business models changes.
- Producing periodic cost reconciliation reports that include information about changing labor and supply costs.
- Calculating new and proposed manufacturing costs
- Collecting and analyzing data to ascertain the costs of business activities such as raw material purchases and manufacturing processes.
- Analyzing gathered data and maintaining records of their findings and conclusions
- Analyzing changes in manufacturing processes, goods and services provided, and even raw materials to determine their impact on cost.
- Analyzing and preparing reports on the difference between actual and standard production costs periodically
- Maintaining records of all data and statistical arrangements used in cost analysis.
- Identifying potential opportunities to increase production efficiency with the primary objective of profit
- Assisting in the development of the annual budget, ensuring that the standard costs for all productions are calculated following budget constraints.
- Analyzing the company’s preference scale to determine the opportunity costs associated with specific operations.
- Preparing reports for the management board that detail the factors that affect the cost or profit of goods and services.
- Maintaining up-to-date job aids for all assigned duties.
Other important tasks include the following:
- Cost Analysis & Validation
Cost analysts are accountable for performing numerous tests on company data. They analyze these tests to provide specific solutions to issues such as the most profitable plan for a construction project or the cost-effectiveness of current operational activities. They conduct extensive data analysis to complete a wide variety of math problems. Their cost analysis takes into account potential changes to pricing models, new business models, and more.
- Market Research and Analysis
Cost analysts conduct market research, keeping an eye on the entire market and thoroughly studying it. They analyze and track organizational expenses using financial software. They conduct research into the costs of their competitors. Cost analysts are expected to stay current on industry developments to provide their company with a competitive edge.
- Developing Cost-Cutting Plans and Reports
Every day, cost analysts crunch numbers, write reports and make recommendations for cost-cutting measures, all of which are documented in written plans. Their reports are critical for businesses to implement more cost-effective processes. Their data can help determine whether a business’s new venture is financially viable or not.
- Lead Cost Management
Cost analysts serve as a liaison between the accounting department, customers, project engineers, and managers, as well as anyone else involved in an endeavor’s financial operations. They create various charts and graphs to assist others in comprehending the financial status of the business. They review and comment on expense-related documents to ensure their accuracy. Additionally, cost analysts contribute to a business’s success by making recommendations to senior management regarding financial policy and expense management.
- Daily Expenses Supervision
Numerous cost analysts are also responsible for daily accounting or bookkeeping duties. They may approve and administer payment of invoices to third-party vendors and suppliers. Costs analysts compile daily performance reports, frequently reviewing them with project stakeholders to ensure costs remain within budget. Depending on the size of the organization, a single analyst may be responsible for monitoring all expenses or may focus on a single project or department.
Qualifications
- A bachelor’s degree in finance, business, or a related field is required.
- Three to five years of demonstrated experience as a supply chain or financial analyst.
- Analytical, mathematical, and problem-solving abilities are exceptional.
- Outstanding communication and presentation abilities.
- Aptitude for success in a high-stress, deadline-driven environment.
- Solid knowledge of information systems and Microsoft Excel.
Essential Skills
- Accounting skills
Accounting skills enable cost analysts to read and comprehend financial statements and reports. These individuals are tasked with the responsibility of interpreting a variety of financial documents, including income statements, balance sheets, and statements of cash flows. As a result, cost analysts must be familiar with accounting techniques and terminology.
- Organization skills
Because a cost analyst may be working with multiple financial documents concurrently, it is frequently advantageous for them to possess superior organizational skills. This enables them to maintain an audit trail of the data they collect. Additionally, organizational skills assist these professionals in maintaining track of various records, numbers, and information pertinent to their work.
- Financial modeling
These professionals’ financial modeling skills enable them to create digital representations of a business’s financial performance. This frequently entails examining the financial records of a business to make recommendations for future endeavors. Financial modeling skills are required for a cost analyst to make investment decisions based on the performance of a company.
- Technical skills
A common cost analyst skill is technical analysis, which entails forecasting future prices using historical data. This enables cost analysts to forecast how prices will fluctuate over time. Technical analysis skills are critical for these professionals to make investment recommendations.
- Research skills
A cost analyst’s research abilities are critical for identifying and locating pertinent data. Cost analysts must be able to comprehend problems, prioritize areas of investigation, and determine the answers to their questions. Accurate research enables these professionals to determine alternative solutions to a financial problem.
- Communication skills
Cost analysts must possess exceptional communication skills to relay critical information to businesses. These professionals simplify complex data to assist businesses in making financial decisions. Cost analysts frequently require communication skills to discuss their recommendations with other professionals.
- Mathematical skills
Cost analysts typically possess an understanding of mathematical concepts and techniques. They may employ their mathematical abilities to determine a company’s value and to evaluate the performance of stocks and bonds. Typically, a cost analyst is familiar with algebra and statistics.
- Writing skills
Cost analysts must have strong writing skills to create accurate reports and presentations. These abilities enable them to proofread and edit their writing for format, spelling, and grammar errors. Cost analyst frequently relies on their writing abilities to craft well-written documents outlining their approach and recommendations.
- Financial reporting
Financial reporting is a critical capability that cost analysts must possess. It entails the tracking, analysis, and reporting of a business’s revenue to ascertain its financial health. This ability enables cost analysts to make sound judgments about how to advise a business on its expenses and investments.
- Mergers and acquisitions analysis
Cost analysts typically possess expertise in mergers and acquisitions analysis, which enables them to comprehend the ramifications of a business merger or acquisition. This ability enables them to develop models for analyzing the two organizations’ financial health. They can then advise a business on the potential advantages and disadvantages of a merger or acquisition.
- Business valuation
Cost analysts apply their expertise in corporate valuation to determine a business’s financial worth reasonably and fairly. These professionals may employ a variety of valuation techniques. Corporate valuation frequently requires the application of techniques such as comparable company analysis, cash flow analysis, and leveraged buyout analysis.
- Problem-solving abilities
Cost analysts frequently possess advanced problem-solving abilities. This enables them to deal with many complex issues that may arise and find appropriate solutions. For instance, a cost analyst may be tasked with resolving a client’s tax issue or analyzing the financial implications of a complex business structure.
- Cooperative effort
Cost analysts may collaborate with other members of a finance team to analyze financial data and forecasts. As a result, these professionals typically possess collaboration and teamwork abilities. This enables them to benefit from their colleagues’ experiences and experiment with novel approaches to financial evaluation.
- Strategic thinking
Cost analysts frequently possess the ability to think strategically. This enables them to identify and prioritize an organization’s financial problems. Cost analysts may use their strategic thinking to analyze financial resources and assist businesses in making sound business decisions.
How to Become a Cost Analyst
- Acquire a Degree
A Bachelor’s Degree in Business or a related field is typically required to begin your Cost Analyst career path and remain a competitive option for employers. Concentrate on developing industry-specific skills throughout your education to ensure that you are adequately prepared when applying for entry-level positions and entering the workforce. Before entering the workforce, a Cost Analyst internship may be required to earn your Bachelor’s degree and acquire the necessary on-the-job skills.
- Select a Field of Specialization
As a Cost Analyst, you may be required to specialize in a particular area of your field. Determine which area of the Cost Analyst field you are most comfortable with and continue to take proactive steps toward growing in that area.
- Acquire an Entry-Level Cost Analyst Position
After earning a Bachelor’s degree in business or a closely related field, you’ll typically start your career as an entry-level Cost Analyst. In general, you can pursue a career as a Cost Analyst after earning a four-year Bachelor’s degree in a related field. Depending on the type of Cost Analyst position you seek, you may wish to consider obtaining certification as a certified management accountant.
- Advance Your Career as a Cost Analyst
Following entry-level, there are several different Cost Analyst career paths to pursue. As an entry-level Cost Analyst, it may take two years to advance to the next senior-level position. To advance in your Cost Analyst career path, each advanced Cost Analyst position requires approximately two years of experience at each level. Additional education, such as a Master’s Degree in a related field, or special certifications may be required to advance your Cost Analyst career path.
- Continuing Education to Advance Your Cost Analyst Career
Not all industries or employers require ongoing education to advance your Cost Analyst career. Earning this degree, on the other hand, may help you advance to higher-paying positions more quickly. A Master’s degree in business can take up to four years to complete. Graduates earn an average of $100,825 compared to $45,201 for those without that type of degree.
Where to Work as a Cost Analyst
Cost analysts work in a variety of industries, including banks, pension funds, insurance companies, and others.
Cost Analyst Salary Scale
In the United States, the national average salary for a Cost Analyst is $69,552.