A career as a cost analyst could be a great fit for you if you’re interested in helping a company become or stay profitable by digging into their expenditure information to sniff out inefficiencies.
This profession can offer very good pay, a chance to put your skills in accounting, financial data analysis and market research into practice, as well plenty of room for career advancement.
So, if you'd like to know more about the ins and outs of a career as a cost analyst, then read on; we’ll fill you in on the details, including an overview of what you would be doing for a living, how much you could earn, and what you’ll need to get into this profession!
What is a Cost Analyst?
Cost analysts research and evaluate costs for a company’s various departments and projects. They must provide senior management with recommendations concerning expenditure management.
Educational Requirements
There isn’t one set degree path for becoming a cost analyst; it is up to the discretion of the employer. Most employers however, prefer that you have a degree with strong financial and business components to it, such as a degree in accounting, finance or business administration.
There are exceptions to this however, as many employers will consider you if you have a degree that is relevant to their field of operation. Some may even prefer it.
For example, construction companies might be interested in you if you have an undergraduate degree in construction management or building science, while manufacturing companies may prefer that you have a degree in mathematics, statistics or engineering.
Experience Needed
Many employers seek candidates for cost analyst jobs that have a background in their specific industry, or in the specific job function, even if it’s in a role of lesser responsibility.
Some employers will only hire you if you have the experience they are looking for, whereas others may just list it as an asset, or a preference.
Certification Requirements
Some employers may require that you have a specific designation, or have completed certain specialized professional coursework in order for them to hire you on as a cost analyst.
For example, you will see many 'Cost Analyst' job postings that ask you to apply only if you have achieved, or are working towards, the CPA or the CMA accounting credential.
General Job Description
Basically, you would have to dig into your organization’s financial information and figure out where money is being allocated, and try to find inefficiencies. You take into account not only how your company is doing, but also how the entire market for that particular product or service is doing.
You might also be responsible for digging into competitors’ cost information, and weighing it against market research, as well as your company’s own cost information, in order to gain a competitive advantage over them.
You would then communicate all of this information to other departmental managers, project managers, or executive management, so they can use that information to drive down costs, without making sacrifices to quality.
Typical Job Responsibilities
Although your duties could vary as a cost analyst, you would generally be responsible for the following:
• Using specialized software to research, analyze and monitor the expenditures of a company
• Researching the costs of competitors
• Determining whether or not a company is properly allocating its resources
• Assisting the company with developing more cost-efficient procedures
• Evaluating the profitability of customer accounts
• Estimating future costs and expenditures
• Providing senior management with recommendations concerning spending policies and expenditure management
Skills and Traits Needed to Succeed
To break into this field, and succeed when you get there, you need to be able to demonstrate a certain set of skills and traits, including:
Technical Skills:
• Able to work with cost data mining and analysis software
• Advanced skills in financial data analysis
• Advanced Excel skills (Building excel models, Pivot tables, V-look up, and Macros)
• Knowledge of SAP or an ERP environment is an asset
Personal Traits:
• Display commercial acumen and have a customer centric attitude
• An interest in data analysis
• Enjoy working with numbers and statistics
• An interest in lifelong learning and career development
Soft Skills:
• Excellent written and verbal communication skills
• Detail oriented, diplomatic team player with a proactive results orientation
• Able to work with minimal supervision
• Previous work experience in same industry
• Demonstrable high-end analytical and numeric skills
Who Employs Cost Analysts?
As a cost analyst, you could be employed on a full-time basis by any organization that needs a dedicated specialist to research and evaluate costs for their various departments and projects.
Organizations that have such needs can be found in virtually every sector of private industry, as well as in government and the non-profit sector. These organizations may range in size from small companies, to federal government agencies, to multi-billion dollar corporations.
Cost Analyst Average Salary Level
The salary level you could earn as a cost analyst can vary, depending on the following factors:
• Your level of education
• Your level of experience
• The size and type of your employer
• The industry in which you work
• The region in which you work
• The scope of your job duties
Unfortunately there is no salary information available from reliable sources for the specific occupation of Cost Analyst. We can however, get a good idea of what you could earn by looking at the salary levels of workers in closely related fields.
Cost Analyst Salary - Canada: According to Service Canada, the average salary level of Canadians working in the Financial Auditors & Accountants occupational group is $67,000 per year, while those working in the Construction Estimators group earn an average of $55,300 per year.
Cost Analyst Salary - United States: According to the United States Bureau of Labor Statistics, the median salary level of Americans working in the Accountants and Auditors occupational group is $65,940 per year, while that of workers in the Cost Estimators group is $60,050 per year.
Cost Analyst Jobs - Current Opportunities
Our job board below has "Cost Analyst" postings in Canada, the United States, the United Kingdom and Australia.
Working Conditions as a Cost Analyst
Work Setting: As a cost analyst, you would primarily work in an office, although they you may be required to travel outside of the office to meet clients, or visit construction or production facilities.
Work Hours: You would most likely work normal weekday working hours, of approximately 35-45 hours per week. You may be required to work overtime in order to meet deadlines, prepare reports, or perform other duties as required.
Work Environment: You may face a great deal of pressure in your work from time to time, as you must meet deadlines and ensure your employer remains profitable. Your work would have a large impact on the current and future success of your employer. You would spend the majority of your time split between analyzing data, preparing and presenting reports, and attending meetings.
Career Advancement Possibilities
Displaying competence and a good work ethic can afford you plenty of career advancement options, including:
• Moving into business unit supervisory or management positions, such as Assistant Controller, or Controller
• Moving into specialized areas, such as accounting, purchasing, or project management
• Eventually moving into executive management
• Taking on a similar role in another company, or moving to a smaller company that has better opportunities for advancement or ownership
Similar Occupational Profiles in Our System
Listed below are occupations in our database that have similar responsibilities, and/or require similar skills, or be in the same sector of industry as 'cost analyst':
• CPA
References
Please consult the following resources to learn more about the various aspects of this profession
Occupations in Alberta: “Financial Analyst.” (March 30, 2017). ALIS website - Alberta Learning Information Service. Retrieved November 8, 2019.
Business & Financial: “Accountants and Auditors.” (September 4, 2019). Occupational Outlook Handbook - United States Bureau of Labor Statistics website. Retrieved November 8, 2019.
Please Note: Much of the information for this career guide was gathered from actual job postings, which due to the brief nature of their online presence, are not listed here as sources.
Scholarships for Becoming a Cost Analyst
The Relevant Fields of Study section below shows fields of study relevant to this occupation. You can search for scholarships matched to those fields of study on our Accounting Scholarships and Economics Scholarships pages.
Success Tip: Be sure to apply for any scholarships that you even barely qualify for, as there are millions of dollars of scholarships that go unused every year due to a lack of applicants!
Relevant Fields of Study
Studying one of the college/university majors listed below can be helpful (or are necessary) for becoming a cost analyst. Click on the links to find out what else you can do with these majors!
