What Is a Cost Accountant? (With Duties, Salary and Skills)
By Indeed Editorial Team
Published 23 August 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Cost accountants perform helpful financial services for businesses. They analyse the costs of production to help a company plan budgets and increase profits. If you are good with mathematics and skilled in problem-solving, a job as a cost accountant might be perfect for you. In this article, we discuss the details of this position, including duties, salary, requirements and skills, and provide five steps for how to join this career field.
Related: How To Find Your Desired Career Path
What is a cost accountant?
A cost accountant is a financial professional who investigates a company's cost of production, or the money it takes to manufacture products or provide services. They analyse the expenses of all factors of production, such as:
Along with assessing supply chains, those in this role perform profitability analysis to help management understand the profitability of their products, services, processes or departments. Comparing input costs to output results can help companies measure their financial performance and make business decisions. These decisions may involve setting prices, allocating resources, sourcing capital and managing risk. Cost accountants also use their assessments to develop budgets and cost-control initiatives, which can increase profits for the business in the future.
What does a cost accountant do?
A cost accountant's specific duties can vary based on their company. However, here are some of their typical responsibilities:
Preparing monthly and quarterly accounting reports for submission to management
Generating quarterly reports for senior management based on an inventory reserve analysis
Suggesting changes to procedures and policies to increase the organisation's cash flow
Analysing organisational data and reviewing rates of labour, overhead and depreciation to recommend policy changes that may improve numbers
Establishing the standard costs of products and services and updating them based on the associated expenses
Maintaining and reviewing the general ledger and balance sheets
Cost accountant vs. financial accountant
Financial accountants develop financial reports and file tax documents for a business, along with other services. This involves conveying business information to external authorities to ensure it adheres to legal regulations. In contrast, cost accountants analyse information for internal use and company benefit only. By assessing the expenses of production, cost accountants can help companies customise their production processes, reducing costs and improving performance.
Average salary for cost accountants
The average salary of a cost accountant is ₹28,804 per month. However, their salaries may vary based on their geographical location, company, years of experience, certifications and other factors. In general, cost accountants who complete more education and earn special credentials can negotiate for a higher salary. They also may pursue supervisory positions, which can come with increased earnings.
Cost accountant requirements
There are many factors that qualify a person to become a cost accountant, including:
Employers hiring for a cost accountant position typically require candidates to have at least a bachelor's degree in accounting, business administration or another closely related field. Students who study in these fields gain an in-depth understanding of financial analysis, business organisation, economics, banking, business law and information technology. Some of the core classes students take in these programmes include:
Statistics for decision-making
In addition, many employers prefer candidates to have a master's degree in accounting or business administration. Completing postgraduate education can expand your job prospects and increase your earning potential.
Candidates usually need at least five years of accounting experience to qualify for open cost accountant positions. To obtain the required training, aspiring cost accountants can seek entry-level jobs in accounting firms or businesses' finance departments. For students pursuing a degree, internships also present great opportunities to develop the skills and experience needed for these roles. Internships allow students to network with accounting professionals who may be able to help them find jobs after graduation.
While certification is usually optional for cost accountants, it verifies your abilities and may give you a competitive edge over other candidates seeking the same roles. Some of the best certifications for cost accountants include:
Certified Management Accountant: Offered by the Institute of Management Accountants (IMA), this professional certification verifies skills in financial planning and analysis, decision support, control and professional ethics. To acquire this globally recognised certification, candidates have to be an IMA member, have a bachelor's degree, have two years of experience in financial management and pass a two-part exam.
Certified Public Accountant: Offered by the Institute of Certified Public Accountants and the Management Entrepreneurship and Professional Skill Council, this designation gives you recognition from global professional accounting bodies. It shows that a candidate has passed the CPA exam and gained expertise in financial reporting, auditing, taxation laws, business laws and financial management.
Data Analytics for Finance Professionals: Offered by the Institute of Cost Accountants of India, this certification recognises a candidate's proficiency in the practical application of data analysis. By taking this online certificate course, students can learn how to use advanced tools and techniques of data analytics to make effective business and financial decisions.
Cost accountants work in a dynamic field, and there are several abilities that can help them succeed in their roles. Here are some important skills of a cost accountant:
Mathematical skills: As accountants document, calculate and work with numbers, it is important they have strong mathematical skills. Calculating costs correctly is important to ensure the accuracy of their assessments.
Computer skills: Accountants use computers to check their mathematical calculations, record their work and complete other tasks. It is important for them to be able to navigate computers quickly and effectively and troubleshoot issues that may arise.
Problem-solving: Cost accountants often use the data they compile to develop cost-reduction suggestions for management. They can benefit from being able to review a problem and find an effective solution for it.
Communication: Cost accountants may need to gather information from various professionals, like their managers and colleagues. Excellent communication skills can help them both listen to others well and present information in a clear, concise way.
Cost accountant work environment
Cost accountants generally work in offices, although some work from home offices, as much of their work is on the computer. They may spend long periods of time sitting at a desk and using computers, printers, fax machines and other office equipment. They may travel to their clients' places of business to gather or present information.
Cost accountants can work in a variety of industries. Many work in accounting firms, while others work in financial departments for individual companies or the government. They may also have their own companies. Most work full-time, although some may work long hours during certain times of the year, such as tax season or at the end of the fourth quarter.
How to become a cost accountant
If you want to become a cost accountant, consider following these steps:
1. Complete education
Attend a college or university and pursue a bachelor's degree in finance, accounting, business administration or a related field. As much of accountant work is on the computer, there are many online schooling options available. You might want to search for open cost accounting positions in your geographic area and determine the level of education required to qualify for the job.
2. Gain entry-level experience
Because this role generally requires candidates to have a minimum of five years of experience, look for entry-level positions in an accounting or finance department. If you are still pursuing a bachelor's degree, look for internship opportunities where you can shadow a cost accountant. You can start in an entry-level role and apply for more advanced positions as you gain skills and experience.
3. Obtain a certification
Though not generally required, professional certifications can help give you a competitive edge over other candidates. Consider earning a certification to look more desirable to potential employers. You can choose a certification area you are interested in to gain expertise in it.
4. Update your resume
When you have achieved the required levels of education, experience and any accompanying certifications, update your resume. For each work entry, highlight the transferrable skills that can apply in a cost accountant role. Include quantifiable results you have achieved as much as possible.
5. Apply for jobs
Perform a search for open cost accountant positions near you or ones that are remote. Identify the positions you are most qualified for based on your experience and educational background. Apply using your updated resume and a customised cover letter for each job you apply to.
Please note that none of the companies mentioned in this article are affiliated with Indeed.
Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.
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