What does a Budget Analyst do of any business.

What is a budget analyst?

Who Is a Budget Analyst?

A budget analyst is a person who helps organizations and businesses manage their financial budget. The goal of the analyst is to ensure that the company’s finances are distributed evenly across different channels and there is always a suitable amount of cash available for different projects. In simple words, a budget analyst reviews the budget of a company to ensure that it is spent efficiently in line with the company’s goals. If you love working with numbers and financial data, this may be a good job for you. In a typical job environment, the budget analyst will usually spend a lot of time reviewing the finances of the company. These finances can be in the form of annual reports, project proposals, or a report highlighting expenses of a specific department. Irrespective of the size of the company, the analyst ensures that a company never goes out of cash. They do this by analyzing the financial reports to investigate how the company is spending its financials. If a certain department or a specific project is wasting cash, a budget analyst can recommend a budget cut. Similarly, any excess finances can be redistributed to other projects that need cash. Another important task of a budget analyst is to approve financial requests and evaluate if a certain project is financially viable for the company to undertake. By doing a cost-benefit analysis, the expert also coordinates with higher management to examine alternate funding methods, prepare financial reports, and look over new project proposals from a financial aspect. Overall, anyone who loves working with numbers and creating a budget may be suited to the job of a budget analyst. For a better understanding of the nature of the job, the following is a list of important duties that these experts undertake:

Job Duties

During a typical working day, a financial budget analyst is usually involved in the following activities:

  • Work with project managers and department supervisors to develop a budget for a future project or plan how a particular department will spend its budget.
  • Combine all the budgets from different projects, departments, and funding resources to develop an overall organizational budget.
  • Plan and monitor organizational spending to review if every department is using its funds adequately. If someone is using excess funds, let appropriate authorities know about the misuse of funds.
  • Monitor the use and flow of the finances in real-time. It also means that the person is responsible for making project managers adhere to the laws and regulations of the company.
  • Plan for future expenses of the company by analyzing a new funding source.
  • Coordinate with the top management to review future project proposals. If the proposed budget is unsatisfactory, find another solution or convince the management to look elsewhere.
  • Make funding requests for different departments and projects.
  • Explain budget requests to legislatures, public, and other stakeholders who want to know how the company plans to utilize its cash.

While this is certainly not an exhaustive list of job duties but it should be enough to describe the responsibilities of a financial budget analyst. As evident from the job duties, this job requires the ability to crunch important numbers and make critical decisions based on those financial figures.

What’s the Workplace Like?

Budget Analysts usually work in a comfortable office setting. Due to the nature of the job, they mostly work independently; however, large projects require analysts to coordinate with project managers and senior officials. Most often, the person works a typical 9-5 office hours. This can quickly change during the mid-year review, the initial phase of a new project, and near the closing deadlines. During these times, budget analysts often work extra hours to get the job done. Sometimes, it can also get stressful because budget and financial resources need to be transferred from one source to another within a limited time frame. It’s also common for experts to travel to different project sites to gather real-time information and review financial projections. Usually, government institutions require a lot of travel due to multiple projects taking place at a given moment.

Where do they Work?

A financial budget analyst mostly works in medium to large businesses that require an in-depth review of their budgets. These experts are employed by the federal government, private institutions, and large companies. According to a recent survey, the largest percentage of positions were available in the federal government. In 2018, 21% of budget analysts worked directly with the federal government. The public institutions regularly require their services to develop, forecast, and maintain budgets of various public projects. Similarly, educational, medical, and scientific institutions also require budget analysts to keep a check on their respective financial activities.

Job Outlook

According to the Bureau of Labor Statistics, there are approximately 58,000 budget analysts in the United States. The future outlook seems bright as the job is expected to grow by 6.5% between 2016 and 2026. In the United States, most jobs are available in States that have large federal projects. For instance, California, Texas, and New York are the hotbed of job activity. Similarly, candidates can also find a lot of jobs in Virginia as most federal offices are located in Washington D.C. and surroundings.

Salary

In 2018, the average salary of a budget analyst was approximately $74,000 per year. Depending on the seniority level and expertise, the salary ranged from $48,500 per year to almost $112,000 for senior analysts. For starters without any experience, the salary is around $48,000 per year or $23 per hour. After two to four years, the average salary may increase to around $59,000. Anyone who has more than six years of experience can expect a salary to reach $74,000 per year. As for senior-level positions that require at least a decade worth of experience, the average salary increases to $92,000 per year or more.

Education

A typical job for a budget analyst requires at least an Associate degree. From the job market, it seems that a Bachelor’s degree is the most preferred path taken by experts as nearly 64% of individuals hold a Bachelor’s degree in finance, accounting, and economics. Accordingly, the concentration of Associated and Masters degree makes up around 10% to 12% of the workforce. It means that a Bachelor’s degree and the work experience are two of the fundamental success factors to excel in this field.

What can you do with a Bachelor’s in Accounting degree?

As accountants also go through similar education and training as any other financial expert, anyone with a Bachelor’s of Accounting can get a job as a budget analyst. Most federal companies consistently require the services of individuals who have a strong know-how of modern accounting practices. Most job advertisements will specifically suggest relevant accounting background when posting openings for budget analysts. Even if the job doesn’t mention an accounting background, a Bachelor’s of Accounting is often a prerequisite for positions that require financial analysis and budgeting.

How to become a Budget Analyst?

The first step to becoming a budget analyst is to get an education that can teach economics, finance, and accounting subjects. These days, most college degrees in these three subjects will cover enough background to fulfill job requirements. Sometimes, degrees in Public Administration, Political Science, Statistics, and Sociology are also in demand; however, candidates must have enough credits card in finance, accounting, and economics to apply for a position. Another career path is to get a certification from the Association of Government Accountants. For instance, Government Financial Managers often get a certificate from the relevant authority before applying for specific jobs in the government sector. Similarly, it’s common for budget analysts to complete a series of financial exams that can enhance their credentials as budget experts.

Do you have what it takes to become a budget analyst?

According to the Holland Code framework describing work personalities, a budget analyst would usually require thinking, persuading, and organizing skills. As any budgeting would require a person to think, it’s important that they have the ability to critically analyze a situation. In fact, investigating a budget is not enough because a good candidate must also be able to persuade others to take the route. Overall, any job as a budget analyst will certainly push the person to organize and manage multiple projects at any given time.

The Verdict

Budget analysis is all about working and managing the finances of businesses. It’s a perfect job for someone who loves playing with numbers and create financial spreadsheets to teach others how to manage their budget. The job also requires detail cost-benefit analysis to guide managers, senior executives, and policymakers to take a definite step in one direction. It will not be an overstatement to suggest that a business analyst is also a decision-maker who is often critical to the success or failure of major projects.

FAQ

Is budget analyst a good job?

It all depends on the way we want to look at budget analyst jobs, if we look at it for the median annual salary, it is a good job. Budget analysts are very well paid and even more depending on how many years they have been working for their actions in the finance industry. Because as more experience more skills. Now, if we look at it from an entrepreneurial point of view, it is a good job and it is also the first thing to consider. Budgets are fundamental tools in decision-making and in the determination to undertake a new project. An analyst knows the initial and total investment. In addition, they may examine budget estimates of profitability and establishes the project’s viability, keeping in mind the opportunity cost of the investment. All of this through budget reports delivered by the analysts from financial management. This is a job that, being more than important, becomes unquestionably a very good job.

What is the difference between a financial analyst and a budget analyst?

Both have similar occupations, but they have specific tasks that distinguish them. Financial analysts research and analyze market trends and historical and current financial data. They look at a person’s or a company’s financial status and help employees determine how to invest, withdraw, or maintain money on a stable track. They evaluate this to see if the financial performance of the annual budget meets all expectations. Now, the budget analysts program, coordinate and supervise the preparation of the institution’s preliminary budget proposals. Their goal is to guide decisions on spending wisely. Budget analysts are more cash-flow oriented, and unlike financial analysts, they do not study external environments such as markets or other companies’ situations. To sum up, there are differences in the educational background of financial analysts, which are more related to technological and computer knowledge during their studies. In any case, they both have the same mission, which is to ensure that the company progresses and operates in a perfect way.

Is financial analyst a stressful job?

In the area of any job, stress varies and depends on each employer and each job title. In the area of finance, all roles are usually long work hours, which requires a lot of commitment and dedication. In comparison to other corporate finance duties, financial analyst jobs do not tend to have much stress. For example, investment banking is a pretty demanding occupation and It can surely generate stress. Certainly, there are days with many working hours that causes exhaustion and anxiety, as well as days in a row that are relatively unstressed. However, a financial graduate who is prepared and trained for the challenges of an organization can handle difficult emotional times.

What are the 3 types of budgets?

There are many types of budgets, and the most significant thing is to know what they work for. Here are the three most common:

  • Operational budget: its goal is to collect, in economic data, the future forecast of the company’s activity. It is fundamental since the rest of the company’s budget depends on its results.
  • Cash flow budgeting: its objective is to evaluate if the business is viable in economic terms and to improve the cash flow to obtain liquidity. It is recommended for small businesses or those where cash cashing is easy to do. 
  • Production budget: its purpose consists of the part that is going to provide a product or service presenting to the part that is interested in obtaining it, a document that holds the details of the cost of its production.  It is very useful to simplify complex commercial operations. Especially in purchase and sale operations, it is one of the most widely practiced.

What skills are required in a budget analyst job?

A budget analyst position is involved in a challenging job that requires specialized experience in mathematics, management analyst software, and economic knowledge. In order to succeed in this job, it is further necessary to have an extensive understanding of the budget cycle, its formulation, and application. Working as a budget analyst for a government agency or for certain types of corporations requires an understanding of the regulations and legislation that will affect the funding allocation of resources to an organization. Undoubtedly working as a budget analyst expects the ability to look at the parts of an organization as a whole unit and including the ability to help to increase the efficiency and productivity within its several parts so the entire organization’s budget can improve.