A Cost Analyst is a professional who delves deep into the financial intricacies of a company, meticulously analyzing costs to optimize efficiency and profitability. They are pivotal in ensuring that resources are utilized effectively while identifying areas for improvement in cost management strategies. In this blog post, we describe the primary responsibilities and the most in-demand hard and soft skills for Cost Analysts.

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Main Responsibilities of a Cost Analyst

The following list describes the typical responsibilities of a Cost Analyst :

Adhere to

Adhere to all corporate policies and ethics codes, i.e., Corporate Code of Conduct.

Analyze

• Analyze and recommend ways to reduce lender risks to bank loans and debt schedules.

• Analyze and report profit margins.

• Analyze cost data to identify trends and patterns.

• Analyze cost reports, present findings and provide recommendations to the appropriate groups.

• Analyze inventory levels and lead times to assist scheduling.

• Analyze inventory levels and usage to identify potentially excess or obsolete inventory parts.

• Analyze manufacturing operations, equipment availability and utilization to assist in scheduling.

• Analyze monthly financial results, including variances to forecasts (Plan and RLBE).

• Analyze monthly raw material counts & variances.

• Analyze purchasing and production variances.

• Analyze the impact of external factors on costs, such as inflation or exchange rates.

Assess

Assess cost implications of changes in production methods.

Assist in

• Assist Finance Supervisor in tasks related to capital assets and spare parts.

• Assist in month-end, quarter-end and year-end close.

• Assist in the preparation of monthly financial statements and variance analysis.

• Assist plant managers with any inquiries.

• Assist quality checks and inspections on project controls deliverables.

• Assist with preparation of monthly accruals.

• Assist with preparing, documenting, and analyzing manufacturing budget by department / account.

Attend

Attend weekly project schedule update meetings with the project team.

Balance

Balance inventory items at the end of the month and complete the associated analyzes.

Benchmark

Benchmark costs against industry standards.

Calculate

Calculate royalty payments.

Champion

Champion the ROM and cost development portion of the Design to Win methodology.

Collaborate with

• Collaborate with cross-functional teams to gather cost data.

• Collaborate with manufacturing personnel on structure and validity of BOM and routing data.

• Collaborate with procurement teams to negotiate vendor contracts.

Communicate

• Communicate at a high level with central controls team for the project.

• Communicate cost-related findings to stakeholders.

Compile

Compile estimates and compare scopes between disciplines to ensure that no overlaps or gaps exist.

Complete

Complete special projects as required.

Conduct

• Conduct audits on financial processes and transactions.

• Conduct cost-benefit analyses for investment decisions.

• Conduct critical analysis of project costs and budget.

• Conduct market research to support future business planning.

• Conduct sensitivity analysis to assess risks.

• Conduct variance analysis to explain differences between actual and budgeted costs.

Consolidate

Consolidate and report companywide material, labor, and overhead to management.

Coordinate with

• Coordinate project schedules and assist with the development of scheduling reports.

• Coordinate with construction groups and provide schedule reports to track staffing assignments.

Cost

Cost controls in project lifecycle in a proactive manner.

Create

• Create and manage budgets, and monitor spending.

• Create and or provide weekly reports.

• Create an innovative environment to ensure best practices are applied.

• Create and customize forecast templates for each project in order to track actuals and cash flow.

• Create Monthly PM Cost Reports using Power BI.

• Create and use formulas to calculate item cost based on standard rates and standard methods.

• Create various reports per prescribed reporting formatting and guidelines.

Determine

Determine and revise standard costs.

Develop

• Develop and maintain cost databases.

• Develop and maintain Program Office Estimates and Life Cycle Cost Estimates.

• Develop cost estimates for new products or services.

• Develop cost intelligence and insights and be an evangelist for cost and capacity management.

• Develop different cost estimation projects and procedures for final approval by management.

• Develop financial real estate models and forecasts.

• Develop, implement, and maintain external & internal cost reports, cash flows and forecasts.

• Develop, maintains and improves estimating methods and processes.

• Develop new VBA tools to continuously improve cost support.

• Develop product cost estimates for new product launches to assist Marketing Department.

• Develop / support Cost and Price Volumes.

• Develop, track, and update cost standards for materials and labor.

Drive

Drive process excellence and scalability through continuous process improvement.

Educate

Educate and enable engineering teams so that they can deliver cost efficient features.

Ensure

• Ensure budget tracking against Purchase Orders or Subcontracts.

• Ensure budget tracking against Purchase Orders, Subcontracts, or other plans.

• Ensure commonality, consistency and reuse across proposals.

• Ensure compliance with Abbott policies, introduce internal controls and ensure their application.

• Ensure compliance with regulatory requirements.

• Ensure ERP is aligned with current costs.

• Ensure project are set-up in EcoSys properly.

• Ensure project compliance with internal corporate requirements related to contract administration.

• Ensure proper control and policy compliance with respect to all other site assets and liabilities.

• Ensure the program delivers on defined targets.

Escalate

Escalate issues to next level of management as required.

Establish

• Establish and track project budget, along with cost to date and cost to complete.

• Establish costing system which accurately describes total cost of delivery.

• Establish, plan, track and report to KPIs and progress in weekly and monthly cost reviews.

Estimate

Estimate product costs for existing and new products.

Evaluate

Evaluate cost-saving opportunities through process improvements.

Export

Export data into Excel files.

Flag

Flag any potential risks and concerns.

Forecast

• Forecast future costs based on historical data.

• Forecast project and construction costs with detailed cost variance analysis.

Generate

Generate cost related questions to the RFP and review responses from customers to assess the impact.

Help

• Help perform budget tracking against Purchase Orders or Subcontracts . #.

• Help perform budget tracking against Purchase Orders or Subcontracts.

• Help Sales / Marketing and Capture Managers with early cost / price strategy development.

Identify

• Identify and partner on cost optimization strategies.

• Identify areas for cost reduction and efficiency improvements.

• Identify cost risks and include in the cost estimates where applicable.

Implement

• Implement cost accounting methodologies.

• Implement cost tracking systems or software.

Interface with

• Interface directly with Sales Operations & Proposals to identify and clarify the scope of work.

• Interface with inspectors to ensure they are providing accurate documentation for updating reports.

Interpret

Interpret / analyze the financial statements.

Investigate

Investigate cost variances and discrepancies.

Lead

• Lead cost estimation meetings and answer questions involving internal / external customers.

• Lead the annual financial cycle for BA Engineering.

Liaise with

Liaise with the Finance team on payment of law firm invoices relating to case funding.

Maintain

• Maintain and distribute key performance metrics.

• Maintain confidential company data.

• Maintain feedback loops and to use actual cost data to improve estimating.

• Maintain ongoing client communication and resolve issues as required.

• Maintain security of all proprietary information.

Manage

• Manage and monitor warranty projects (authorization to closure).

• Manage integrated data from one program to another.

• Manage intercompany charge back accounts as required.

• Manage terms of pay spreadsheet and project shipment report.

Mentor

Mentor junior level staff charged with similar duties.

Model

Model best practices by coordinating the budgeting and forecasting processes for Corporate Services.

Monitor

• Monitor changes in processes or methods to calculate effects on overall costs.

• Monitor engineering, procurement and construction budget, actual, commitment and forecast.

• Monitor inventory costs and recommend adjustments.

• Monitor R & D project costs.

Oversight

Oversight and review of financial activities at foreign locations.

Own

Own cost forecasts for the current year and Business Plan.

Participate in

• Participate in budgeting and forecasting processes.

• Participate in financial audits.

• Participate in month-end WIP reviews.

• Participate in plant procurement and inventory management.

• Participate in the annual physical inventory count as well as the verification.

• Participate in update meetings in the field related to cost, schedule and progress.

• Participate in year-end preparations.

Perform

• Perform cost allocations across departments or projects.

• Perform cost and price activities on multiple bids simultaneously.

• Perform earned value measurements for the managed contracts per the PMO standards.

• Perform enterprise-wide cost analysis to identify innovative cost efficiencies.

• Perform monthly reconciliations for inventory, banking, and other GL accounts.

• Perform other ad hoc requests as assigned.

• Perform research as required to ensure adequate information to support decision making.

• Perform such other duties as may be assigned by the Director, Finance and / or Executive Director.

Plan

Plan, track and report on cost saving initiatives.

Prepare

• Prepare advanced financial analysis and modeling as required for active development projects.

• Prepare and analyze of COS / COP variances.

• Prepare and analyze ocean and inbound spend report.

• Prepare and maintain historical cost data.

• Prepare budgeting reports (for the company and for each department).

• Prepare Buy America and Canadian Content analysis and audits.

• Prepare cost reports for management review.

• Prepare in setting of milestones with Program and Finance Teams concerning Engineering Budget.

• Prepare journal entries and assist in period close.

• Prepare Manufacturing Expense reports and analysis of variances.

• Prepare (monthly, quarterly and annual) cost forecasts.

• Prepare monthly reporting of KPIs to track performance.

Produce

• Produce monthly reports detailing plant costs and analysis of all processes.

• Produce yearly manufacturing budget.

Propose

Propose improvements to the accounting processes already in place.

Provide

• Provide accurate, timely costing information to support business decisions.

• Provide ad-hoc financial analysis and reports for management as requested.

• Provide analytic support for deep dive initiatives on the company roadmap.

• Provide engine cost for proposals, Financial Investment Audits and passports gates.

• Provide full Project Cost Management.

• Provide guidance and support regarding Contractual requirements.

• Provide guidance on cost control measures.

• Provide holistic high-level view of program financials.

• Provide input into the Project's monthly scorecards.

• Provide inputs to a monthly scorecard and stage gate updates along with the monthly cost reports.

• Provide job cost information for month end, quarter end and year end close.

• Provide Project Managers with CPI and production rates as required.

• Provide required support in reviewing of all material financial project documentation implications.

• Provide to input PO, orders and invoices into the cost report where applicable.

• Provide variance analysis explanations to financial reporting services.

Receive

Receive incurred costs into SAP from Contractors.

Recommend

Recommend pricing strategies based on cost analysis.

Reconcile

Reconcile monthly billed / unbilled vs.

Record

Record accurate updates to cost reports or forecasts.

Request

Request, update and maintain Buy America certificates throughout the year.

Respond to

Respond to ad hoc queries that require model analysis and extraction of data.

Review

• Review all invoices for reasonableness.

• Review and analyze cost variances (Material, Labour, Subcontract and Overhead).

• Review and monitors all the invoices for the project.

• Review and track budgets in support of Project accountabilities.

• Review and validate reports with Functional Leads for monthly cost reporting data.

• Review financial statements to ensure accuracy.

• Review monthly project charges for accuracy and make corrections as required.

• Review project invoices and coordinate payment with internal accounting department.

• Review the factors and all cost variances, including PPV, IPV, absorption and spending variances.

• Review the result and follow up on the improvement.

Run

Run and review productivity report.

Seek

Seek continuous improvement.

Setup

• Setup and maintain Change Management in Oncore and / or JDE as required.

• Setup and maintain Oncore templates for project and outage work.

• Setup / maintain Change Management in JDE.

Summarize

Summarize data using pivot tables for periodic reporting.

Support

• Support costing team and financial reporting team with tasks upon request.

• Support in gathering project cost related requests for Project Partners.

• Support in the analysis and computation of Material Costs for Priority Projects in BT.

• Support Make / Buy, Data, Parts & Equipment (DP&E) decisions.

• Support material costing and financial analysis of Key Projects in Bombardier.

• Support on conducting physical inventories and monitor the cycle count program.

• Support preparation of Independent Government Cost Estimates.

• Support Price and FAR 15 reviews by providing cost estimate justification.

• Support Program development by providing cost updates on ongoing design jobs upcoming cost impact.

• Support Project Managers and Project Controls Manager as required.

• Support the development of standard cost in newly implemented SAP ERP system.

• Support the review and approval activities for baseline and subsequent updated schedules.

• Support the review of change orders in accordance with the client's approval process.

Track

• Track and analyze overhead costs.

• Track and perform analysis on KPI's.

Train

Train staff on cost management best practices.

Understand

• Understand billing and revenue language in the contract.

• Understand Prime Contract notice requirements.

Update

• Update and maintain earned value reports for all major scopes of work daily.

• Update process and manual for Buy American and Canadian Content Tasks.

Utilize

Utilize labor management systems to accurately project labor productivity and costs.

Work

• Work proactively towards cost target objectives in collaboration with others.

• Work with Contractors to ensure quality and timeliness of Contractor Reports.

• Work with estimators to solicit, compile, and evaluate changes.

Most In-demand Hard Skills

The following list describes the most required technical skills of a Cost Analyst :

1. Proficiency in cost accounting principles.

2. Advanced Excel skills for data analysis and modeling.

3. Knowledge of financial modeling techniques.

4. Familiarity with enterprise resource planning (ERP) systems.

5. Expertise in using cost management software.

6. Understanding of activity-based costing (ABC) methodologies.

7. Ability to interpret financial statements.

8. Skill in conducting regression analysis.

9. Competence in database management.

10. Knowledge of statistical analysis software such as SAS or SPSS.

11. Proficiency in cost estimation techniques.

12. Understanding of cost-volume-profit analysis.

13. Ability to perform sensitivity analysis.

14. Knowledge of project management principles.

15. Skill in using business intelligence tools for reporting.

16. Understanding of supply chain management.

17. Familiarity with financial risk management techniques.

18. Proficiency in financial reporting standards (e.g., GAAP, IFRS).

19. Ability to develop complex financial models.

20. Skill in using cost optimization tools and techniques.

Most In-demand Soft Skills

The following list describes the most required soft skills of a Cost Analyst :

1. Strong analytical skills.

2. Attention to detail.

3. Excellent problem-solving abilities.

4. Effective communication skills, both verbal and written.

5. Ability to work collaboratively in a team environment.

6. Adaptability to changing priorities and deadlines.

7. Critical thinking skills.

8. Time management and organization.

9. Integrity and ethical conduct.

10. Proactive approach to identifying and addressing issues.

Conclusion

A Cost Analyst plays a vital role in driving financial efficiency within an organization. By mastering the essential hard and soft skills outlined in this post, professionals can excel in this dynamic field, contributing to the sustainable growth and success of their companies.