Cost accountants analyze the costs of a product or service offered by a corporation. The purpose of any business entity is to turn a profit on its efforts. Without a firm understanding of costs, one cannot make informed decisions regarding apt pricing. One could undercut their efforts by going too low or too high. Both would only be detrimental to the bottom line. Cost accountants are a strong component to avoiding such situations.
- Might require a Bachelor’s degree and up to two years of practical experience in the field or related area.
- Determine and employ cost accounting methods and procedures.
- Must comprehend commonly used practices, concepts and procedures.
- Prepare and analyze costing audits and cost reports.
- Check and review atypical cost records and ensure cost data is allocated appropriately
Like most other types of accountants, a cost accountant could find a position at a number of organizations. What would distinguish the position is the cost accounting services would be required where some kind of product or service was being distributed to and paid for by a third party. So they may work directly for a corporation in the retail or manufacturing industries. They could perform the same service as an independent agent or through a consulting firm.
Accounting jobs tend to operate on three levels. There are entry, mid and senior levels.
Entry levels could hold one of the following positions: accounting assistant, junior accountant, staff cost accountant or accounting clerk. A degree in the arts, science or business would be helpful, as well as proficiency in business management software like SAP. The candidate would function under the supervision of a manager or senior accountant. Duties might include monitoring financial data and preparing reports, and maintaining and reconciling accounts with related computer tech.
Graduating to mid-level, the candidate’s title could change to senior cost accountant or cost accounting manager. While they would have the skill set of entry, a higher degree, like an MBA, could mean larger paychecks and greater opportunities. Duties might include supervising entry level/junior accounting personnel, collecting and analyzing data about operating costs and providing cost and revenue advice to managerial staff.
Senior level candidates are vice presidents of finance, financial controllers and chief financial officers. They need strong organizational and management skills as well as knowledge of corporate finance. An MBA would definitely put the candidate in a better position. A certification would also be beneficial. Candidates monitor financial activities, develop reports for stockholders and management, and have a hand in hiring, training and overseeing staff. They may have the authority to directly deploy cost improvements and strategies to increase efficiency.
Cost accountants enable corporations to increase profit and minimize financial waste. They determine which factors are affecting the cost of a product or service. This criteria could include the production’s labor costs, budget for materials used to produce, waste and packaging costs, inventory costs and overhead figures like running a specific piece of equipment. Understanding, compiling and finding solutions with this information are what a cost accountant does, impacting the final decision in the selling price on an item or service.