What Is A Budget Analyst?

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The analysts go through the budget proposals and review them before approval. Aware of the spending and allocation of finances, they tend to be the most suitable people to finalize the budgeting for any company and approve funding requests.

Key Takeaways

  • A budget analyst is a professional data-oriented person who organizes and allocates various financial resources by monitoring each spending on an estimation basis.They need to have a vast knowledge of the entity’s operations.Their work is considered useless if they do not know the sector in which the entity operates.They must have comprehensive knowledge and consider many things before finalizing the work. Moreover, they are considered a supporting hand for the organization’s top managers.

How Does A Budget Analyst Work?

A budget analyst is responsible for carrying out one of the most important tasks of an organization – budgeting. Thus, from reviewing proposals to allocating resources, these professionals take care of every aspect of budgeting. As a result, they seem to involve in various budgets in the organization. However, the budget analyst duties might also remain confined to looking at the budget of a specific area as a financial analyst, production analyst, branch analyst, cash flow analyst, economist, financial planner, auditor, etc.

As financial budget analysts, they look for possible profits of the organization after deducting the expenses. In contrast, as production analysts for budget, they deal with the costs involved in producing finished goods. 

They prepare a list of all the components required for production from the production manager of the organization. Then, they gather information about all the overheads in the production process to calculate the possible gross profitGross ProfitGross Profit shows the earnings of the business entity from its core business activity i.e. the profit of the company that is arrived after deducting all the direct expenses like raw material cost, labor cost, etc. from the direct income generated from the sale of its goods and services.read more from each product.

As analysts for branch budgets, they perform the same duties as they do as financial analysts. However, they remain confined to only one branch, not the whole organization. As cash flow analysts for a budget, the main job is to estimate the cash flows from the operationsCash Flows From The Organization’s OperationalCash flow from Operations is the first of the three parts of the cash flow statement that shows the cash inflows and outflows from core operating business in an accounting year. Operating Activities includes cash received from Sales, cash expenses paid for direct costs as well as payment is done for funding working capital.read more and financial activities of an organization. 

As an economist, these analysts study the operational and other aspects of the business to understand its financial activities. Accordingly, they apply the strategies required for proper financial planning. On the other hand, as an auditor, check if the organizations maintain financial records properly.

Qualifications & Requirements

For proper budget analysis, a person needs to be a finance expert and should be able to do calculations with ease. They, therefore, must satisfy the following criteria and have the required budget analyst skills to become one:

  • A bachelor’s degree in business, finance, psychology, mathematics, or social science.Analytical skills along with communication skillsDetail-orientedMust possess knowledge of accounting, economics, and statistics.Work experience with budgeting or finance gets preference.May go for the Association of Government Accountants (AGA)-sponsored Certified Government Financial Manager (CGFM) certification. This is mainly for the ones working with the federal, state, or local government.

The CGFM credential is the most recognized budget analyst certification, and candidates having the same must comply with the AGA’s Code of Ethics and clear an examination. They also have to complete a professional experience in governmental financial management for a specific period. The credential helps in career growth, boosting the salary of budget analysts.

Responsibilities

The budget analyst evaluates budget proposals against compliance with regulations and reviews funding requests to approve or reject them accordingly. Based on the various budgets they prepare, the managers project the expected costs, revenues, and productions required. They also help managers to project the cost of hiring personnel. In addition, the budget by the analyst helps plan recruitment and labor training to reduce unwanted labor turnover.

Moreover, allocating financial resources helps them monitor expenditures and track unwanted expenses. Plus, these professionals conduct cost-benefit analyses to evaluate products and services. In addition, they assist in the speedy decision-making process for top managers and help save organizations from unavoidable shocks, providing unexpected cash outflows.

The analysts also help in the bifurcation of expenses as per various departments. This way, they identify the department to which the cost is related. However, they take effective measures to reduce the cost. They also segment costs into fixed costFixed CostFixed Cost refers to the cost or expense that is not affected by any decrease or increase in the number of units produced or sold over a short-term horizon. It is the type of cost which is not dependent on the business activity.read more, variable cost, and semi-variable costsSemi-variable CostsFixed and variable costs combine to form semi-variable costs. Because semi variable costs are influenced by both fixed and variable costs, they are also referred to as mixed costs.read more, which, in turn, helps the management decide the actual costs to focus on.

Budget Analyst vs Financial Analyst

While business analysts may also perform the duties of financial analysts, the two roles differ widely in terms of skills, responsibilities, qualifications, workplace type, etc. So, let us have a quick look at the differences between the two:

This article is a guide to What is Budget Analyst. Here, we explain its qualifications, requirements, responsibilities, and comparison with a financial analyst. You can learn more about financing from the following articles –

To start, a person must have a bachelor’s degree in business, finance, or any related field. However, obtaining certifications, like AGA’s Certified Government Financial Manager (CGFM), gives them better career growth and a significant salary hike as a professional.

The duties of a budget analyst can be listed below:– They monitor expenses and help find out unnecessary ones.– The professionals evaluate the budget proposals as per regulatory standards.– They check the funding requirements and review them properly for further approval or disapproval.– They are the supporting hand of the top management who speed up the decision-making.– The professionals defend the budget and prepare an agreement with the management.– They predict the future financial needs of the organizations.

This job requires a significant set of skills, and individuals with enough knowledge of finance or business are likely to carry out the responsibilities in the best possible way. In addition, with the required certifications, this job pays individuals quite well. Plus, the scope of career growth is huge.

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