If budgeting, analyzing, and managing costs is what thrills you the most, then cost accounting could be the right career option for you!
But to become a better cost accountant, you must have the right skills, excellent domain knowledge, and the most needed cost accounting certifications.
That’s why through this detailed guide, we bring you the most in-demand cost accounting skills you need if you are planning to move up on the corporate ladder.
What you will get to know here?
- What is cost accounting?
- Typical cost accountant job duties and responsibilities
- Top cost accountant skills and recommended courses
Let’s begin!
What is cost accounting?
Cost accounting is referred to as identifying and capturing the cost of production by including variable and fixed costs.
This is a process managed by the company’s internal management team and that’s where the role of a cost accountant starts.
Most of the time, people confuse cost accounting with financial accounting.
However, both are different in terms of jobs and skills.
Let’s uncover the job roles and responsibilities of a cost accountant
As a cost accountant, your primary role is to find and analyze new ways of reducing the overall costs of any product or service your organization is offering.
Apart from this, other essential roles of a cost accountant include:
- Handle the data collection process to manage the reports for overall reporting, accounting, and cost control
- Forecast expenses cost incurred, and budgets to make a detailed analysis report
- Plan and review budgets and conduct negotiations to minimize expenses
- Work on strategy formulation for improving business profitability and reduce risks
- Analyze cost expenditures
- Review goods and services to find cost-saving opportunities
- Work on the general ledger
Most essential cost accountant skills
To out-perform in your career, you must work on the following cost accountant skills and competencies:
1. Strong accounting knowledge
As a cost accountant you are expected to handle everything right from determining fixed and variable costs to implementing different methods of cost accounting.
For this, you must upskill yourself with the fundamentals of cost accounting like:
- Matching principle
- Principle of conservatism
- Cost (direct costs, indirect costs, fixed costs, variable costs, inventoriable costs)
- Contribution margin
- Relevant range
- Break Even point formula
- Cost accounting analysis
- Activity-based costing (ABC)
- Gross margin and contribution margin
- Asset management
- Business awareness
- Accounting processes
Suggested courses:
2. Excellent analytical skills
If we talk about a day in the cost accountant’s life, majorly he/she has to spend a lot of time consolidating and analyzing the company’s reports and data.
As the objective of a cost accountant is to scrutinize innovative and unique ways of increasing profitability by cutting costs, having a strong analytical mind is much expected.
Working on analytical skills will also help in successfully executing the following tasks:
- Successful evaluation of likely business ventures, investments, contracts, etc.
- Finding and including suitable cost drivers
- Add value to the budget development process
- Improve decision making
- Ensure accuracy and avoid any possibilities mismatching
Suggested courses:
3. Tech-savviness and technical proficiencies
Computer skill-set is indispensable for cost accountants as they are expected to operate multiple accounting software and tools.
Having a grip on IT-related technologies puts you ahead of others.
Some of the common software and tools you are expected to use are:
- Quickbooks
- Enterprise 21 ERP software
- KPMG Spark
- Zoho Books
- Wave Financial
- MS. Excel
- Oracle
Suggested courses:
4. Communication collaboration and presentation skills
Depending upon the product, Cost Accountants have to work and deal with big teams, external vendor partners, stakeholders, financial accountants, risk managers, etc.
That’s why having a strong grip over your business communication skills and portrayal techniques is a must.
Nurturing your communication skills will help you in the following ways:
- Finely explain the company’s products or services to clients and stakeholders
- Build more beneficial relationships with clients, which can be helpful in molding better cost savings deals
- Write detailed reports and make professional presentations
- Helpful in negotiating
Suggested courses:
Apart from the above 4 major skill-sets, you must also work on the following essential cost accounting traits:
- Capital budgeting
- Risk management
- Statistics
- Corporate taxation
- Ethics
- Auditing
- Macroeconomics
- Costing
- Problem-solving
- Research-oriented
- International trade, mergers, and acquisitions working patterns
- Forecasting
- Strategic decisions making
- Performance management
- Management Skill
