A cost accountant observes and analyzes the costs. associated with doing business. These costs can be tangible or intangible and cover everything from the cost of the office lease to inventory and labor expenditures. A person in this position is responsible for determining which costs can be reduced or eliminated and how to implement the savings without compromising the quality of daily operations or customer service.
The analysis process of a cost accountant is fairly constant regardless of the industry in which he works. The cost accounting software used can be generic, industry specific or created in-house for the specific company. The software program normally consists of a database of costs, both fixed and variable. It usually includes basic features to track changes and project fluctuations in expenditures and assets.
Armed with these software parameters, a cost accountant delves into details on material, manufacturing and labor costs. He includes analyses of costs versus profitability in all areas of operation. The finer points of his research may include utility costs, real property and equipment values, tax issues and variations in profit margins. Reports reflecting his findings are generally supplied to management.
Cost accountants may find standard systems for analysis insufficient, as their capabilities are often limited. In this case, the accountant may create his own database and create checks and balances tailored to the research at hand. He is most effective in his job when the data accumulation and analysis system is streamlined to meet his diagnostic needs. Customized software systems also facilitate the creation of reports for management that pinpoint critical areas of concern.
Accurate costing information is vital to the stability and growth of any company. A good cost accountant must have a clearly defined view of the company as a whole, as well as the ability to recognize and address minute details that affect profit and loss. This involves applying highly-developed skills in margin analysis and project costing. A software system tailored to meet specific company needs helps him provide the most precise and helpful information to management.
A cost accountant's work doesn't only involve computer work—he may also be involved in activities to support his goals. These can include conducting physical inventories or cycle counts in departments, ranging from raw material procurement to office supplies. He may also interface with other departments to keep apprised of their concerns and comments and apply them to his cumulative cost accounting conclusions.