How to Become a
Cost Accountant
If you’d like to learn how to become a cost accountant, this guide will walk you through the education, job duties and skills needed. In addition to salary estimates and veteran insights, you’ll also find resume samples to help you learn how to describe your qualifications.
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What Does a Cost Accountant Do?
A cost accountant will use processes to determine the costs of products and processes to report in financial statements and to advise management on the best course of action for an organization to maximize its costs and capabilities.
For example, a bank will use cost accounting to determine the cost of processing a customer's deposit, which may provide management with guidance on how to price these services. Cost accounting started in the manufacturing sector but now includes the service industry.
Some expected duties and responsibilities include:
Prepare financial reports for various audiences, such as tax authorities and regulatory agencies.
Work with corporate executives to strategically plan for a company.
Construct systems and controls to review data accumulation and reporting systems.
Coordinate and investigate cycle counting variances and resolve issues.
Accumulate and apply overhead costs as required.
Analyze and report on breakeven points and margins.
Report on periodic variances and their causes.
Analyze capital budgeting requests.
How Do You Become a Cost Accountant?
Statistics from the U.S. Bureau of Labor Statistics show that all accountants and auditors, including cost accountants, can look forward to an estimated 212,100 job openings annually until 2031. Although this estimate does reflect a slight decline of 2%, there are ample job opportunities for a well-trained accountant.
This growth is driven mainly by the globalization of businesses related to international trade, mergers and acquisitions. After recent corporate financial difficulties, businesses face stricter regulations. As tighter measures are implemented, accounting services will increase to help businesses comply with new laws and regulations. These measures make a career in cost accounting a highly attractive specialized field for financial professionals.
Earn an accounting or finance bachelor’s degree.
To become a cost accountant, a bachelor's degree in accounting is standard for an entry-level position. This degree places a strong emphasis on developing deep theoretical and conceptual knowledge related to financial principles such as business organization, financial analysis, principles of economics, money and banking, business law and information technology.
Develop skills with internships or volunteer opportunities.
While in school, build your practical experience by applying for college-credit internships or offering pro-bono cost analysis and accounting to help finesse your accounting skills.
Study and prepare for a certified public accountant (CPA) certification.
Many cost accountants voluntarily choose to become CPAs and Certified Management Accountants (CMA) to help boost their resumes and confirm their accounting qualifications. Registering for this certification normally requires hours of training and at least two years of professional experience.
Although these certifications aren’t mandatory, career opportunities are increased with these designations. You can learn more about these certifications and their related exams through the American Institute of CPAs (AICPA) and the Institute of Certified Cost & Management Accountants (ICCA).
Consider a master’s degree for senior-level job opportunities.
A master's degree in accounting or business administration (MBA) focused on accounting is required for advanced positions. These higher-level cost accounting roles include accounting manager, budget director, chief cost accountant or internal auditing manager.
Apply for full-time jobs.
A successful cost accounting job search begins with a high-quality resume highlighting your relevant skills and experience. If you’re unsure what qualifications to showcase on your resume, study our robust library of cost accountant resume samples or consider using an online Resume Builder to draft an application-ready resume quickly.
Once you complete your resume, you must start your online search for cost accountant job opportunities. As you look for job opportunities, leverage your professional network, including people you may have met through school, exams, internships or volunteer work.
Cost Accountant Skills
A cost accountant generally works in an office environment. They’re expected to know all production processes and visit all organization departments regularly.
Handling sensitive information confidentially and responsibly would make a candidate more attractive to any potential employer.
Hard skills:
Soft skills:
Insights from a Cost Accountant
To get an inside look at how to become a Cost Accountant, we spoke to Kathy Downs, who is Vice President of Robert Half Finance & Accounting. You can read more about her profile on her LinkedIn bio or find out more information about accounting from her blog site. Here’s what she had to tell us.
What is the common career path for Cost Accountant?
A bachelor’s degree is typically required to become a Cost Accountant, as well as strong math skills. Many Cost Accountants need to have experience in the employer’s industry or sector. The employee might start out in the finance department as a staff accountant, and transition over time into a cost accounting role.
A Cost Accountant will likely have to work in a plant at some point and be involved with operations analyzing raw materials cost and appropriating labor costs. This will probably include multiple shifts and cost appropriation of premium labor pay to finished goods, as well as doing analysis on work in process.
What should someone consider before becoming a Cost Accountant?
Cost Accountants are often responsible for managing company inventory counts of a given product. They are also in charge of tracking the cost of goods sold and calculating overhead costs. If this doesn’t interest you, this probably isn’t the right career choice.
Cost Accountants analyze data to recommend ways to make products and processes more efficient and cost effective. Depending on the industry, they may also work with sales teams to develop estimates and bids for clients.
Are you willing to spend the majority of your time in a manufacturing plant? Often the work attire will be more casual. There may be strong smells and additional safety precautions that you wouldn’t find in a more corporate setting. In some locations, there will not be air conditioning or heating, and the work location may be in a rural area.
What type of person excels in this job?
Cost Accountants estimate the time, materials, cost and labor associated with products or services, so people who are passionate about their industry or type of product, collecting data and showing attention to detail can excel in this job.
What are some of the most important skills for Cost Accountant to have?
Soft skills: Strong research capabilities, problem solving and analytical skills are all important traits for Cost Accountants. It’s equally important to have the ability to work with all types of people, while building their trust and respect.
Hard skills: Experience with cost-estimating software is a plus for this role. Proficiency with Microsoft Excel is also preferred.
Additional sought-after designations for Cost Accountants:
Certified public accountant ( CPA)
Chartered global management accountant ( CGMA)
Certified management accountant (CMA)
Master’s degree in business (MBA)
What do you find to be the most rewarding aspect of being a Cost Accountant?
Though I’m not a Cost Accountant, Robert Half Finance & Accounting places costs accountants at companies of all sizes on a global basis. This specialized area of accounting can be extremely rewarding in helping a company continue to operate at peak performance, excel in a different industry or market, or succeed with the launch of a new product.
Cost accounting involves a set of skills generally obtained early in your career. It gives someone the ability to always fall back into these skills during various points within their career. A controller or CFO who has never done cost accounting will have a difficult time obtaining a senior level role in manufacturing.
How Much Do Cost Accountants Get Paid?
The Bureau of Labor Statistics reported the median annual wage for Accountants and Auditors was $67,190 in May 2015. The lowest 10 percent earned less than $19.90 per hour, and the highest 10 percent earned more than $41.40 per hour. The bulleted list below will include BLS data for the top 10 states for median wage from highest to lowest.
Top 10 States for a Cost Accountant Salary
Cost Accountant s in the following states make the highest median hourly wage in the U.S.
Cost Accountant Resources
If you need more information? We put together this list of additional resources to help you as you continue to explore a career as a Cost Accountant.
On the Web
Management and Accounting Web
Information for accounting education, research and practice
Federal Accounting Standards Advisory Board
for accounting resources like manuals and guidelines and reference materials
Society of Cost Management
a site to share ideas, promote best practices and connecting people.
Industry Groups
AICPA
a member association representing that sets ethical standards, auditing standards and develops the CPA Exam
AccountingCoach.com
here you can find the world's largest free online accounting course
Accounting Blogs
CPA Trendlines
provides information for the tax, accounting and finance community
GoingConcern.com
for accounting news
Accounting Onion
for financial reporting issues