Budget Analyst Career Overview
| Accounting.com Staff
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What Is Budget Analysis?
In a nutshell, budget analysis involves closely reviewing the details of a financial budget. The purpose of budget analysis is to understand and improve the way money is spent and managed. This type of scrutiny ensures that organizations utilize all available finances in the most efficient way to meet overall goals. Concrete benefits of budget analysis include:
- Mitigating risk by avoiding insufficient funds for future projects
- Ensuring interdepartmental coordination toward overall goals
- Providing regular, objective evaluations of actual performance
- Balancing ambitious financial projections with realistic figures
- Locating unfair or inappropriate allocations of funds
- Encouraging continued organizational success and development
Large organizations, including government agencies, nonprofits, higher education institutions, and corporations, often employ budget analysis. However, small companies and individuals can also reap numerous benefits from this financial tool.
What Is a Budget Analyst?
Budget analysts help an organization reach financial goals, maintain profitability, and pursue long-term growth. Budget analysts typically hold at least a bachelor's degree in accounting, business, economics, or a related field.
The job responsibilities of a budget analyst include monitoring spending, preparing budget reports, and analyzing data. These professionals look for trends and perform cost-benefit analyses. Budget analysts also research relevant economic, industrial, and occupational developments to inform future projections and recommendations.
The sections below explore the responsibilities, qualifications, and work environments of budget analysts.
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What Does a Budget Analyst Do?
What Are the Responsibilities of a Budget Analyst?
Collaborate With Others
Although many daily tasks of a budget analyst are solitary activities, these professionals must also collaborate with other company professionals. Budget analysts may meet with program and project managers to develop plans, interact with executives while reviewing final budget decisions, and discuss funding requests with staff members.
Monitoring outgoing cash flow is a key responsibility of budget analysts. These analysts review their organization's spending to ensure large-scale adherence to budget allowances. Budget analysts also monitor the spending of individual departments to inform future decisions regarding allocation of funds.
Monitor and Forecast Developments
Budget analysts monitor external developments in relevant economic, industrial, corporate, and occupational areas. Analysts may gather information and data from financial and trade publications, government agencies, and personal interview sources. Budget analysts utilize this information to forecast trends and other factors that could impact their organization financially.
Although top executives typically make final budget decisions, these professionals rely heavily on the efforts of budget analysts during the planning and finalization processes. Budget analysts may evaluate proposed programs based on cost-benefit analyses, recommend cutting spending in particular areas, or encourage redistribution of extra funds.
Budget analysts interpret extensive amounts of data from internal and external sources, including past and current budgets, economic and financial reports, and investment forecasts. Their analysis and interpretation of data informs decisions about annual budget allocations, investments, and purchase requests.
In addition to strong mathematical abilities, budget analysts must possess keen written and verbal communication skills. Budget analysts frequently explain complex, technical information in a way that is easy to understand. Analysts deliver written budget reports, make charts and graphs, and give presentations.
What Qualifications Do You Need to Become a Budget Analyst?
How Are Budget Analysts Employed?
- Government Agencies Budget analysts who work for federal, state, or local governments often focus on funds allocated to government programs and projects. These analysts evaluate program performance, analyze relevant policy, and attend committee meetings to explain recommendations to officials.
- Educational Services Budget analysts working in education focus on the development and review of institutional budgets. Tasks include reconciling budgeted and actual revenue and expenditures, analyzing proposed funding, and helping faculty and staff understand and comply with budgetary requirements.
- Professional Services Budget analysts who work for professional services organizations, such as banks and brokerage firms, focus on in-house budgets. They perform general accounting activities, monitor spending, and process and analyze funding reports.
- Large Corporations Budget analysts employed by large corporations work to secure long-term development and profit. These professionals help executives create budgets, and they forecast important industrial, economic, and occupational developments.
- Nonprofit Organizations Budget analysts in the nonprofit sector determine the best options for distributing resources among departments and programs. These analysts evaluate program efficiency, analyze need, and make recommendations.
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Professional Organizations for Budget Analysts
- American Association for Budget and Program Analysis AABPA supports government managers and analysts, corporate executives, and students. Members receive benefits including networking opportunities, a quarterly journal subscription, and scholarship opportunities.
- National Association of State Budget Officers NASBO is a nonpartisan, nonprofit organization dedicated to education and research. The organization represents state budget offices in all 50 states. Staff members at NASBO-member offices receive associate membership.
- Association of Government Accountants AGA is the leading membership organization for financial management professionals working for the government. AGA offers professional certification and membership benefits, including networking opportunities and professional development resources.
- American Association of Finance and Accounting AAFA connects finance and accounting organizations and job-seekers throughout North America. Candidates can browse online job listings or visit AAFA recruiters at more than 40 locations.
- The American Finance Association The AFA promotes the academic study of financial economics. AFA members receive access to the Journal of Finance, along with resources including a professional directory and networking opportunities.
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