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A budget analyst develops budgets for organizations like governments, corporations, and nonprofits. They analyze financial data to determine how a company can best use its money and make funding recommendations based on their research.
Unlike other accountants who work with taxes or valuations, budget analysts create budgets and help businesses stick to them. They keep organizations on track financially through proper planning.
Budget analysts work closely with managers and executives to set budgets and review funding requests. Consequently, people who work in budget analysis should have strong communication skills.
Budget analysts can expect their salaries to increase over time. For example, according to FederalPay.org, the annual salaries of federally employed budget analysts grew by $35,900 from 2004-2020.
Learn about budget analysis, including budget analyst duties and career prospects, in this guide.
Budget Analyst Duties
A budget analyst creates budgets and financial reports for organizations by analyzing past data. They evaluate budget proposals, monitor spending, and help organizations plan for future financial needs.
These analysts advise companies on spending and saving to meet their goals. They also outline the pros and cons of making large purchases. Executives and managers use these recommendations to make informed spending decisions for their organizations.
Some of a budget analyst's daily responsibilities include:
Building Annual Budgets: Budget analysts work with company leaders to build annual budgets. These help organizations plan how they will spend their money for a fiscal year. They also find ways for their organizations to use resources more effectively. Approving Funding Requests: Managers and department leaders submit budget proposals. Analysts make sure that requests follow organizational guidelines and fit the budget before approval. Performing Cost-Benefit Analyses: A cost-benefit analysis allows budget analysts to calculate the total cost of a project, then compare that to the benefits it could bring to their organization. This helps analysts and their organizations to make data-driven decisions. Advising Decision-Makers: Budget analysts analyze data and make recommendations to help executives make informed financial decisions. They also work with managers to help find alternative sources of funding. Forecasting Future Financial Needs: Budget analysis helps organizations plan for their financial future. They use data to project market trends, revenue, and expenses.
Key Hard Skills for Budget Analysts
Mathematics: Budget analysts use math every day to evaluate funding requests and monitor spending and revenue. They often use complex equations and statistical formulas in their analysis. Forecasting: Forecasting is a multi-part process that allows analysts to plan for the future. Analysts apply methodologieslike extrapolation or regression analysisto statistical data to create forecasts. Enterprise Resource Planning Software: This software manages a company's resources, including its financials, operations, reporting, and human resources. Analysts use ERP programs to understand how their budgets affect different aspects of their organizations. General Accounting: Because budget analysts monitor revenue and expenses, they usually need foundational accounting knowledge. Budget analysts do not have to be certified public accountants (CPAs), but they should understand general accounting principles.
Key Soft Skills for Budget Analysts
Active Listening: Analysts must pay close attention to what others are saying. This helps them understand organizations' financial goals and challenges to plan and forecast accurately. Critical Thinking and Problem-Solving: A budget analyst uses problem-solving skills to create possible solutions to tricky financial problems. Critical thinking skills help analysts evaluate multiple solutions to pick the best path forward for their organizations. Communication: An analyst has to explain their recommendations clearly for leaders to understand how budget decisions can affect their companies. This work requires strong written and oral communication skills. Time Management: Budget analysts have to manage their time and meet important deadlines. Strong time management skills also allow analysts to value their coworkers' time, including executives and managers.
Budget Analysis Areas of Expertise
Budget analysts in many industries, including nonprofit organizations and large government agencies. Each sector requires analysts to use unique skills and approaches to solve budgetary problems.
Learn more about the most common industries for budget analysts below.
Government Budget Analysis
This is the most popular industry for budget analysts. According to the Bureau of Labor and Statistics (BLS), 46% of budget analysts work in local, state, or federal governments.
These analysts assist government agency leaders in developing budgets and assessing program results. They also recommend funding adjustments, like defunding underperforming programs or redistributing extra resources. Budget analysts may attend committee hearings to explain financial plans and recommendations to legislators.
Most analysts start in entry-level positions but can advance to intermediate and senior-level positions as they gain experience.
A budget analyst may earn optional certified government financial manager (CGFM) credentials, which can also help to advance their career. Pursuing CGFM certification involves passing exams, meeting experience and ethics requirements, and completing continuing education.
Common Job Titles
Budget analyst I Budget analyst II Budget analyst III Senior budget analyst
Corporate Budget Analysis
Budget analysts that work in the private sector allocate companies' resources to meet goals and objectives. One of their primary duties, unlike government budget analysts, is to assist companies in increasing profit.
Corporate analysts gather and analyze data to help organizations make wise business decisions. For example, analysts might analyze data to determine if acquiring another company makes financial sense.
There are no special certifications for budget analysts. However, many higher-level positions prefer employees with advanced degrees, like a master's in business administration or finance.
Common Job Titles
Budget analyst Intermediate budget analyst Program cost and schedule control Analyst Budget procurement analyst Principal financial analyst Senior budget analyst
Nonprofit Budget Analyst
Nonprofit budget analysts perform many of the same duties as government or corporate analysts. They evaluate organizational needs and allocate financial resources.
Analysts in nonprofit organizations may also help draft budget-related legislation and analyze a policy's effectiveness after implementation. They may also lead professional training, contribute to grant applications, and develop new budget procedures.
A nonprofit budget analyst may work as part of their organization's finance team and report to the department's director. They often report their recommendations to the board of directors, as needed.
There are no additional certifications for nonprofit budget analysts. However, these professionals should understand forecasting methods, data analysis, regulatory requirements, and advanced financial budgeting.
Common Job Titles
Budget analyst Budget and data analyst Budget and grant analyst Program budget analyst Senior budget analyst
How to Become a Budget Analyst
In general, a budget analyst needs a bachelor's degree. These professionals typically hold degrees in accounting, finance, economics, mathematics, and social science. On average, full-time students complete bachelor's degrees in four years.
While not necessary, some positions may prefer candidates with graduate degrees in budget-related fields, like a master's degree in accounting or finance. It usually takes full-time enrollees two years to earn master's degrees in these fields.
Analysts who want to work in government may choose to earn optional CGFM certification. This credential can help government analysts advance their careers.
Budget Analyst Salary and Career Outlook
According to the BLS, the median annual wage for budget analysts was $79,940 in May 2021. The lowest 10% of budget analysts earned less than $49,330, and the top 10% of analysts earned over $124,440 as of May 2021.
The BLS projects that the demand for budget analysts will increase 5% between 2020-2030. Additionally, there are about 4,300 budget analyst job openings each year.
However, a budget analyst's income and job prospects depend on their location, industry, and experience. For example, analysts in the District of Columbia make $106,380 — the highest annual mean wage for budget analysts in the United States.
Questions About the Budget Analyst Job Description
What does a budget analyst do?
Budget analysts create budgets and reports for organizations. They also monitor spending, perform cost-benefit analyses, and make financial recommendations to executives.
What specializations can budget analysts have?
Budget analysts can earn optional certified government financial manager (CGFM) credentials if they plan to work in government. This certification can help budget analysts increase their earning power and pursue advanced roles.
Where does a budget analyst work?
About 46% of budget analysts work in local, state, or federal governments, according to the BLS. However, budget analysts can work in many industries, including private corporations and nonprofit organizations.
Is a budget analyst a hard job?
It depends on the person's skill set. Budget analysis requires advanced mathematical skills and general accounting knowledge. These professionals also need strong problem-solving, critical thinking, and communication abilities.
Is a budget analyst an accountant?
Budget analysts do not have to be CPAs to work in the field, although some CPAs may choose to become budget analysts. Most budget analysts major in accounting, economics, mathematics, social science, finance, or a related field.
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