What Is a Cost Analyst?
When you own and operate a business, you must keep track of your expenses. A cost analyst will tell you if your costs are too high, it does not matter how much revenue you generate – you still will not turn a profit.
That is one of the benefits of hiring a cost analyst for your business’ expense reduction.
Startmyconsultingpractice.com aims to give your business expert advice on controlling your expenses and maximizing profits. Our dedicated team has several years of experience helping businesses get back on track through in-depth articles, consultations, and more.
So, what is a cost analyst? Let us take a deeper look at the position.
Cost Analyst Job Description
There are many responsibilities for a business cost analyst especially within a financial services franchise.
Analyze Expense and Cost Transactions
What does a cost analyst do? The first thing that a cost analyst can do for your company is act as an expense reduction consultant and analyze all of your expenses and transactions.
Many businesses tend to overspend on inventory, overhead, and other costs. A cost analyst, using expense reduction consulting, will examine these expenses and determine if there are ways you can be saving money.
Cost analysts will also look at your payroll to determine if you pay your employees a fair amount. While every business owner wants to pay their employees as much as possible, it may not make sense for your bottom line. A cost analyst can determine if you must cut your worker’s wages.
Provide Detailed Financial Analysis
After a cost analyst looks over all your expense reports, they will provide a detailed financial analysis of your business as the next step in merchant cost consulting. This analysis includes recommendations of which areas of your business you can save more money. It also proposes a long-term plan to cut overhead costs and standard costs to regain financial stability.
Cost analysts use many industry techniques such as horizontal, vertical, and ratio analysis to calculate the best way for your business to turn a profit.
Conduct Market Research
Cost analysis professionals conduct market research to see how your competitors handle their expenses. As a business owner, you must know what tactics your competitors use to gain an edge. They may be doing things that you have not thought of, which can help you grow your business.
Cost analysts also examine customer data to predict buying habits, loyalty levels, and more. The more you know about potential customers, the stronger your marketing material will be.
Prepare Cost Reconciliation Reports
You must be aware of all of your expenses during each fiscal period. One way to accomplish this task is to prepare a cost reconciliation report.
Cost reconciliation refers to the accounting procedures for each cost. You may also refer to cost reconciliation as cost closing.
Expenses change throughout a fiscal period. For example, you may order more inventory from a vendor than expected. Therefore, you must continually update your expense report throughout the year for tax purposes. A cost analyst analyzes your expenses and knows how to report them.
What To Look for in a Cost Analyst
When you are hiring a cost analyst, there are many things you should look for to determine if they are a qualified candidate. Are they a freelancer or do they work within a cost reduction services group?
Bachelor’s Degree in Accounting or Business
A high-quality cost analyst should hold a Bachelor’s Degree from a prestigious university in either accounting or business. Your cost analyst must have business accounting experience, as a sizable part of a cost analyst’s job is to prepare reports and provide expert financial analysis.
It is always wise to hire a cost analyst with several years of experience working with businesses in your industry. If a cost analyst makes an error with your financial statements, you could face tax penalties and fail to grow your business.
Attention to Detail
Cost accounting requires extraordinary attention to detail. These finance professionals work with a lot of numbers that can cause confusion. Your business needs someone focused and fully committed to helping your business cut costs.
One method to help you determine if a candidate is focused is to thoroughly examine their resume and CV for spelling or grammatical issues. If they have typos in these critical documents, then it shows that they may not have the best attention to detail.
Also, let the candidate speak about your particular business. Their response will inform you of whether or not they researched your company before applying for your job.
Expert Analytical Skills
Perhaps the most vital characteristic of a successful cost analyst is their analytical ability. Look for candidates who have experience turning businesses around with their financial and business prowess.
During the interview, ask them about their experience with similar companies to yours. If they can run through the details of how they helped another business cut costs, then they are a quality candidate.
Another method you can use to observe their analytical ability is to provide them with a snapshot or overview of your company’s financial status. Then, ask them to offer suggestions for how they would help eliminate costs if given the position. If they provide detailed answers that are eye-opening, you can feel safe hiring them.
More Cost Analyst Info
On average, a cost analyst makes about $70,000 annually. Experienced and proven cost analysts can generate up to $350,000 each year.
There are a couple of different ways in which cost analysts work. Your company can hire a full-time analyst to work with your business each day. Alternatively, you can hire an analyst for a short period at a pre-negotiated hourly rate.
Many businesses select the latter to help them when things are going awry. Depending on the financial success of your business, you may not need a cost analyst, particularly if you have a competent accounting team.
Hire a Cost Analyst
Now that you have the answer to “What is a cost analyst?” you can move forward with your search.
Startmyconsultingpractice.com consistently puts out articles that will help you improve your business. Our mission is to lend our expertise and knowledge to make your business more sustainable. One of the ways you can accomplish this is by having an expert run a cost analysis of your business.
To inquire about our services, send us an email, and one of our trusted customer service experts will be in touch.