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What is Cost Accounting?

what-is-cost-accountingA desire to drive decisions of an organization based on careful evaluation and analysis of all types of resources might lead a future accountant to consider a position in cost accounting.

With a number of different paths to follow in the accounting field and opportunities in diverse positions, a career as a cost accountant can be particularly rewarding and satisfying for financial professionals who are looking to make a difference in the success of an organization.

Overview of Tasks

A cost accountant completes a variety of functions in an organization in order to make recommendations and determinations to influence the reduction of expenditures and implementation of new processes or purchases to limit financial loss. This requires the collection and analysis of different types of data, including results from evaluation of time, labor, material, equipment, other resources, and pricing.

Cost accountants are often tasked with handling inventory, from daily or weekly counts to reconciling cyclical inventory assessments. Professionals in this area of accounting also evaluate the costs of all production, collecting and recording those results in order to resolve any differences and discrepancies. Reporting on the margins and determining costs of products, services, projects, equipment, and other expenditures ultimately aids an organization in making decisions on finances.

Skills, Education, and Certifications

Most cost accountant positions require for professionals to have earned a minimum of a bachelor’s degree in an accounting or finance field. In some cases, particularly for managerial or supervisory roles, candidates will be required to have a master’s degree.

In addition to courses that range from statistics to advanced financial management, graduates with an undergraduate or graduate degree also develop the additional skills required for becoming a cost accountant. These include critical thinking, interpersonal skills, problem solving, attention to detail and accuracy, analytical skills, research abilities, and communication skills. Graduates have also gained experience working with a number of computer programs such as business management software including SAP and productivity software, particularly spreadsheet programs.

To further prepare for a cost accountant role in any type of organization, future professionals might also consider completing a number of different certifications that can be helpful for securing a position as well as for advancing in a career. Helpful certifications include the Certified Public Accountant (CPA) and the Certified Management Accountant (CMA) designations. Additional information on professional certifications can be found at the website for the National Society of Accountants at www.nsacct.org.

Career Opportunities

Cost accountants are valuable in all types of organizations throughout various industries, from automotive manufacturing to publishing to education. A cost accounting professional might work for a government agency, educational institution, medical facility, or private corporation. Often, cost accountants specialize in one particular industry or product in order to most effectively make recommendations for financial decisions.

A degree in the accounting field combined with the right skill set help in the preparation to enter into a position as a cost accountant. Professionals who are able to effectively apply this knowledge and expertise to cost accounting become integral parts of the overall success of an organization.

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