What Do Cost Accountants Do? (Roles, Workplaces & Salaries)
Cost accounting—a type of management accounting—is a specialized area of expertise concerned with analyzing the costs of products manufactured or sold by a company.
In order for a corporation to be profitable, it's critical to understand the precise costs associated with a product and use that information to set appropriate prices. Cost accountants do just that, and are therefore vital to overall financial decision-making.
There are several different ways to approach cost accounting, but the main methods include standard cost accounting, activity-based cost accounting, lean accounting and marginal cost accounting.
Where Do Cost Accountants Work?
Cost accountants might work for accounting or consulting firms, or they might work directly for corporations in the retail or manufacturing sectors. But regardless of work environment, accurate cost accounting enables a company to reduce financial waste and increase profit.
How is this accomplished? By determining the specific factors affecting the cost of a product or service. These factors may include labor costs for the production process, cost of materials used in making the product, packaging costs, waste costs, inventory costs, and overhead figures such as the cost of running a particular piece of equipment. A cost accountant understands how these factors, and many more, influence the selling price of an item or service.
Cost Accounting Career Path
Entry Level
Types of Roles
- Staff cost accountant, junior accountant, accounting assistant, accounting clerk
Getting There
- Bachelor's degree in accounting (Bachelor of Arts, Bachelor of Science, or Bachelor of Business Administration)
- Proficiency in Microsoft Office and business management software such as SAP
Description
- Work under a senior accountant or manager
- Analyze financial information and prepare reports
- Maintain and reconcile accounts
- Work with accounting-related computer technology
Mid Level
Types of Roles
- Cost accounting manager, senior cost accountant
Getting There
- All entry-level requirements
- Strong communication and analytical skills
- At least a bachelor's degree in accounting or business administration; an MBA degree can mean higher salaries and better opportunities
Description
- Collect and analyze data about operational costs
- Assist and direct junior accounting personnel
- Provide advice to managerial staff about costs and revenues
Senior Level
Types of Roles
- Financial controller, chief financial officer, vice-president of finance
Getting There
- All mid-level requirements
- Solid management and organizational skills
- Knowledge of corporate finance
- A graduate degree such as an MBA is desirable; additional certifications such as a CPA may also be helpful
Description
- Oversee all financial activities of the company
- Create high-level reports for management and stockholders
- Hire, train and oversee staff
- Implement cost accounting improvements and other financial strategies to increase a company's efficiency
Cost Accountant Salary
According to the U.S. Bureau of Labor Statistics Occupational Outlook Handbook, cost accountants should have a projected job growth rate of 5.8% through 2033. This is just above the national growth average for all jobs.
You can take a look at median annual accounting salaries nationally and by state below.