What is a cost analyst and what do they do?

Cost analysts examine and manage the expenses of a company. One of their key goals is to determine ways to reduce inefficiencies and lower costs. They must also keep an eye on the ‘bigger picture’ to understand how markets are performing in their industry.

Depending on the size of the organisation, Cost analysts can be in charge of all expense monitoring or conduct analysis for a single project or department. They prepare and track budgets, audit financial transactions, monitor actual costs against standard (expected) costs, conduct pricing market research and prepare statements and reports for management.

Key responsibilities

Responsibilities will vary, but examples include:

  • Performing tests on company data, analysing the result to offer specific answers to problems (e.g. cost-effectiveness of current operations).
  • Recommend changes in operating procedures to increase efficiencies in payment and procurement processes.
  • Performing research on competitor costs and showing awareness of latest industry developments.
  • Analysing the market for potential growth opportunities as well as risks.
  • Producing reports to senior management on money-saving strategies.
  • Leading cost management policies.
  • Contributing to yearly operation plans, budgets and estimating new product costs.
  • Overseeing daily expenses, keeping them in line with the original budget.

Why are they important?

Cost analysts play an essential role lowering expenditure and reducing inefficiencies in an organisation. The information provided by professionals in this field allows businesses to maximise profitability, increase working capital and improve financial performance and efficiency

Skills needed for this role

Cost analysts must have strong analytical and problem-solving abilities. They should be strong communicators, with good presentation skills. Employers prefer cost professionals to have at least a bachelors’ degree with a strong business or financial training focus, or ideally some form of relevant professional qualification.

Strategic Professional Options examinations linked to this role

Advanced Financial Management

Advanced Performance Management

Career opportunities presented by this role

Cost analysts work in a variety of industries and organizations. Small companies, nonprofits, government departments, and large multi-billion dollar organisations all employ professionals in this field and there are a variety of career options to choose from.

Competencies

High level competencies required include:

  • Financial management

    A. Links developments in global trade, markets, business practices and the economic environment to required improvements in the financial and risk management of an organisation.

    B. Advises on business asset valuations, capital projects and investments using appropriate analytical qualitative and quantitative techniques.

    C. Identifies, evaluates and advises on alternative sources of business finance and different ways of raising finance.

    D. Communicates and advises on the impact on financial decision making on current developments in regulation, governance and ethics.

    E. Assesses and advises on appropriate strategies to manage business and organisational performance regarding business and finance risk and effectively communicates the impact.

  • Management accounting

    A. Applies development and performance management, in the wider business and technological environment, within the context of strategic planning and implementation.

    B. Directs organisational performance through the selection and measurement of financial and non-financial performance indicators.

    C. Collaborates on the key tactical and organisational areas of budgeting and control, capital investments, people and resource management.

    D. Consults on the design and use of current and emerging technology and information systems to improve strategic decision-making and organisational performance.

     

  • Strategy and innovation

    A. Applies business acumen and commercial awareness to deliver business objectives.

    B. Recommends a range of suitable strategic options from which to develop sustainable plans and objectives.

    C. Evaluates, justifies and implements suitable strategic options.

    D. Adopts and applies innovative methods to implement strategy and manages change.