Cost Manager Job Description, Skills, and Salary
Get to know about the duties, responsibilities, qualifications, and skills requirements of a cost manager. You can use our job description template in this article to produce your own. We also provide you with information about the salary you can earn as a cost manager.
Who is a Cost Manager?
A Cost Manager must be familiar with every facet of construction throughout the lifespan of a building or institution. Starting with the capital expenditure phase of a structure or facility, which encompasses the feasibility, design, and construction phases and the expansion, refurbishment, maintenance, and destruction of a facility. Utilizing this information, they efficiently control costs by balancing quality and value with specific customer requirements.
A particular area of the larger field of business administration is cost management. Cost managers supervise all areas of cost-related decision-making inside a business. In addition to ensuring that quality standards are met or surpassed, they endeavor to guarantee that expenses are efficiently controlled and managed.
Depending on the demands of their firm, cost managers may be involved in a wide range of operations. They might guide how to get resources, how much they should cost, and which components should be utilized to build a product. They could also keep an eye on the actual production process to make sure it moves along as quickly as feasible.
The demand for cost managers with technical expertise rises as firms grow more complicated. Cost managers must understand resource management to control costs and ensure that projects stay within budgets.
Since they frequently have the best knowledge about where the company’s money is going, cost managers are required to play a more significant role in risk management. By being knowledgeable about the most recent risk management methods and technologies, cost managers may take advantage of this. They may assist their business in reducing avoidable risks and saving money by doing this.
Cost Manager Job Description
Below are the cost manager job description examples you can use to develop your resume or write a 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 the Cost Manager include the following:
- Participate in cost meetings with the contractors and engineering teams to assess procurement status and change order status.
- Examine the earned value of the project periodically.
- Prepare monthly reports comparing standard costs to real production costs while analyzing actual manufacturing costs.
- Support the plan to increase internal manufacturing production by creating a scenario analysis for management’s consideration.
- Keep a permanent inventory for each category, and reconcile it daily with receiving, shipping, production, and returns.
- Prepare, record, and assist in creating monthly financial reports for management review.
- Analyze and compare the balances of the general ledger accounts.
- Make and uphold internal manufacturing cost standards.
- Create and keep track of KPIs for the primary cost drivers.
- Ensure the correctness of all inventory categories and the integrity of inventory controls.
- Analyze differences proactively, then inform manufacturing and operations management of problems and possibilities.
- Create and maintain criteria for landed costs, and make sure that differences from actuals are frequently assessed, reassessed, and corrected.
- Bachelor’s degree in accounting, finance, or a similar role
- Practical expertise in developing and analyzing cost standards with engineering and production staff
- Excel proficiency, including knowledge of pivot tables, macros, and other sophisticated features
- Experience in accounting and finance with a focus on monthly close, budgeting, financial analysis, and predictions
Here are the skills you require to excel in your career as a Cost Manager:
- Change Management
- Financial Analysis
- Cost Monitoring
- Project Management
- Risk Management
- Time Management
- Contractual Negotiation
Because they sometimes handle several projects at once, cost managers must be adept at managing change. This entails recognizing when a project has to be modified and informing all pertinent stakeholders of the changes. It also involves adjusting to unforeseen conditions that can occur throughout a project.
Cost managers track and keep an eye on the company’s financial resources using their expertise in budgeting. They analyze data, forecast upcoming costs, and develop budgets for each company department. Cost managers must possess good budgeting abilities to guarantee the business is profitable and spends wisely.
The ability to present knowledge in a way that others can understand is known as communication. The ability to adequately convey their requirements is crucial for cost managers since they frequently interact with various departments, including sales and manufacturing. They must also be able to listen to staff and consumer suggestions for ways to enhance procedures or goods.
The ability to foresee upcoming patterns and occurrences is known as forecasting. As a cost manager, you might have to estimate the cost of producing a good or service based on existing production levels. You may use forecasting expertise to decide whether your business needs to buy new machinery or hire more personnel to satisfy demand. This can assist you in making decisions that will cut expenses and boost profitability.
Cost managers evaluate budgets, monitor spending, and analyze data using financial analysis. This skill requires you to understand how businesses generate revenue and the variables that affect their profitability. It also entails assessing a company’s expenditure patterns and figuring out whether they are running effectively. Financial analysis is a common task for cost managers to do when writing reports for top management or clients.
The ability to manage various projects and deadlines is organization. Budgets for many departments or projects may be in your charge as a cost manager. You can keep on top of your duties and make sure that the relevant information is available when needed by having excellent organizing abilities. Maintaining records of previous initiatives will allow you to contrast them with current ones.
The ability to track and record project-related expenditures is known as cost monitoring. When creating project budgets, cost managers employ cost monitoring techniques because it enables them to track how much money has been spent on each component of the project and identify any areas that are over or under budget. Additionally, it aids cost managers in determining any modifications that may be necessary to keep the project’s whole scope under the allocated spending limit.
The ability to monitor projects and guarantee that all project-related elements, including budgets, timetables, and resources, stay on track is crucial for cost managers. Cost managers plan and carry out cost-reduction projects, evaluate data, and provide suggestions based on their findings using their project management abilities.
The capacity to recognize possible hazards and create mitigation methods is known as risk management. As a cost manager, you can determine the financial risk associated with new projects or initiatives. You may assess the chance that an investment will generate a profit with risk management skills. This entails examining the project’s expenses and advantages to see if any elements could impact the result.
Cost managers must be detail-oriented since they often evaluate and approve project budgets. They carefully assess expenses at various manufacturing stages to ensure their predictions are realistic. When examining invoices, cost managers use their attention to detail to check that suppliers are paid accurately.
Cost managers examine data and apply their findings to make wise judgments. They assess sales records, manufacturing costs, budgets, and other financial data to decide how much a business should charge for its goods or services. Comparing actual spending to anticipated expenses allows cost managers to assess the effectiveness of their cost-cutting strategies.
Time management is the ability to schedule and carry out work in a way that guarantees you meet deadlines. To succeed in this position, you may need to oversee several projects as a cost manager, so time management skills are crucial. It is vital to arrive on time for meetings with other team members or business associates, as you probably have them frequently.
Cost managers frequently have to develop timetables for jobs and projects. They could also be in charge of planning company events like conferences and meetings. Scheduling is crucial for cost managers since it ensures they do all essential tasks on time. It is also beneficial when making budgets so that the business may achieve its financial objectives.
Contract negotiations with clients and suppliers are common among cost managers. They might need to grasp how to read contracts, comprehend the terms of agreements, and recognize dangers or difficulties that could influence the result of talks. Cost managers skilled at negotiating may ensure their business fulfills contractual requirements while also receiving an attractive price for goods and services.
How to Become a Cost Manager
Below are the steps to take to become a Cost Manager:
Step One: Earn a Bachelor’s Degree
A general aptitude for mathematics and statistics, and the ability to swiftly comprehend, compare, and analyze data from facts and figures, are typically requirements for those interested in a career in accounting. A bachelor’s degree is the minimum educational need to gain an entry-level career in accounting or finance, and obtaining one typically entails a degree in accounting or another business-related discipline. The most popular accounting degrees offered in colleges and universities are related programs like the Bachelor of Science (BS) in Accounting and Bachelor of Science in Business Administration (BSBA) with a major in accounting.
Step Two: Gain Professional Experience
Most people start as entry-level cost accountants, internal auditors, or public accountants. An aspirant cost accounting manager will grow in the accounting sector with work experience, which some states demand to sit for the Certified Public Accountant (CPA) test.
Step Three: Obtain a License
Accountants must hold a CPA license to submit reports to the Securities and Exchange Commission (SEC). Although a master’s degree is not necessary, several colleges provide a unique 5-year curriculum to satisfy the CPA requirement.
It is important to note that some employers favor candidates with graduate degrees, such as an accounting master’s degree. These programs contain management-strengthening classes that also cover complex operational, financial, and ethical issues.
Step Four: Get a Cost Managing Role
Cost accounting is a specialist discipline frequently used to supply information so a business may decide how to serve its investors. The gathering and delivery of financial data to firm leaders for use in planning and decision-making is the responsibility of a cost accounting manager. Many different sectors have open opportunities in places like administrative offices or payroll services divisions.
It is crucial to maintain the validity of your CPA license if you have one. In most states, CPAs must do continuing education (CE). Depending on the state, different CE credits may be required.
Step Five: Obtain a Professional Certification
A worker’s job prospects and development can be improved by earning certification in specific accounting subjects. Several national organizations, like the Institute of Management Accountants, provide certification for accountants (IMA). A bachelor’s degree and work experience are required for the Certified Management Accountant (CMA) designation, which is offered by the IMA.
Where to Work as a Cost Manager
Cost managers can work across the board in the global construction business. This includes residential, commercial, industrial, recreational, agricultural, and retail properties in real estate. They also work in process engineering fields like chemical engineering facilities or oil rigs.
Working for a developer or in the development division of a large corporation (such as a shop, manufacturing, utility company, or airport), for a public-sector agency, or as a loss adjuster are just a few of the many jobs that cost managers might engage in. On the contracting side, you could be employed by a significant local, national, or worldwide contractor, a general contractor operating locally or regionally, a subcontractor or specialty contractor, or a management-style contractor.
Cost Manager Salary Scale
The salary range for a cost manager is typically between $81,483 and $102,699 in the United States. The average cost manager’s salary is $90,541.
In the United Kingdom, the average gross pay for a cost manager is £58,479, or £28 per hour. Additionally, they receive a £2,702 bonus on average. The average salary for a cost manager at entry level is £40,990. A senior-level cost manager makes an average income of £72,580.
In Canada, the average gross pay for a cost manager is CA$113,442, which equates to a CA$55 hourly wage. Additionally, they receive a CA$ 5,241 bonus on average. The average salary for a cost manager at the entry-level is CA$79,515. A senior-level cost manager, on the other hand, makes an average income of CA$ 140,797.
In Germany, an estimated cost manager makes an average gross salary of €88,850 or €43 per hour. Additionally, they receive a bonus that is typically €6.65.
Australia’s national average wage for cost managers is AU$ 145,999 per year or AU$ 74.87 per hour. Most experienced professionals earn up to AU$195,000 a year, while entry-level occupations start at AU$117,305.
The average gross pay for an estimated cost manager in Ireland is €88,445; this translates to an hourly wage of €43. Additionally, they receive bonuses on average of €6,625. The typical compensation for an entry-level estimating cost manager is €61,922. A senior-level estimating cost manager makes an average income of €109,893.
In Nigeria, the average salary for a cost manager is about ₦463,000 per month. A salary might be between ₦245,000 and ₦703,000.