Budget analysts’ main responsibility in a for-profit business is to analyze the budget and look for ways to use resources more efficiently so as to increase profits. They identify budget issues that need to be addressed, notify management, and then make recommendations for new budgeting strategies.
According to the Bureau of Labor Statistics, about 22 percent of all budget analysts work for federal government agencies, while 13 percent work for state and local schools, and another 22 percent are evenly split between state and local government agencies. At all levels of government, they are responsible for determining how to most efficiently distribute money and other resources among departments and programs. Some government budget analysts help evaluate performance programs, analyze financial policies for efficiency and viability, and help draft budget-related legislation.
An entry-level budget analyst often starts with the straightforward tasks of preparing and posting journal entries, reconciling the general ledger account, and closing end-of-month accounts. The job responsibilities of more experienced analysts include more complex tasks:
- Prepare, maintain, and analyze balance sheets, income statements, and other financial records and reports
- Analyze and interpret accounting records
- Monitor disbursements (such as payments to vendors) and research problems to identify issues and recommend corrections
- Help prepare monthly metrics reports, internal management reports, and external regulatory reports
- Help present financial data, progress, and performance metrics information for briefings and other presentations
- Research complex accounting issues and errors to find solutions
The Budgeting Process
In preparing, coordinating, monitoring, and analyzing budgets, the initial budgeting process typically involves four components:
- At the start of each budget cycle, managers and department heads submit proposals to budget analysts for review. These proposals include operational and financial plans for the organization’s programs, estimates of the financial resources needed for the programs, and recommendations for how to fund the programs.
- Analysts examine these proposals to make sure they are complete, accurate, and follow the organization’s procedures, regulations, and objectives. Analysts sometimes use cost-benefit analyses to review financial requests, evaluate program tradeoffs, and look for alternative funding methods.
- Budget analysts then combine individual departmental budgets into operating and capital budget summaries that contain statements that support or advocate against funding requests.
- Analysts submit the budget summaries to senior management, or in the case of government work, to appointed or elected officials responsible for budgeting decisions. Analysts then help the managers or officials analyze the proposed budget to come up with alternative options if the budget doesn’t meet current needs and restrictions.
Tools Used by Budget Analysts
Budget analysts use spreadsheet, database, and financial analysis software. Many organizations now use Enterprise Resource Planning (ERP) programs as part of the budgeting process. By bringing together all of an organization’s operating information into a single computer system, ERP programs help analysts estimate how a change in the budget will affect each part of the organization.
In addition to financial and technical skills, budget analysts need strong verbal and written communication skills. This is because the job involves preparing, presenting, and often defending budget proposals when presenting them to decision makers.
The minimum education for a budget analyst is a bachelor’s degree in accounting, finance, or a related area. For many jobs, the CPA credential is a definite advantage, and sometimes is required. Some senior analyst jobs require an MBA or a master’s degree in accounting, finance, or a related field.
The U.S. Department of Labor, Bureau of Labor Statistics expects budget analysts with master’s degrees to have the best job opportunities. Regardless of the specific major, which could include accounting, business, economics, finance, public administration, statistics, political science, or sociology, classes in statistics and accounting are a must for aspiring budget analysts.
Government budget analysts can earn the designation Certified Government Financial Manager from the Association of Government Accountants. The requirements for this certification includes a minimum of a bachelor’s degree, 24 credit hours of study in financial management, two years of professional experience in governmental financial management, and passing scores on three exams that evaluate competency and test a candidate’s knowledge of ethics and related law.
Income potential for budget analysts can vary depending on factors such as employment industry, location, and level of education. According to the Bureau of Labor Statistics, the median salary for budget analysts as of May 2020 was $78,970, while the top ten percent earned more than $121,360
When looking at the biggest industry employers of budget analysts, the median salaries that year were:
- Federal government – $86,480
- Professional, scientific and technical services – $86,480
- Local government – $74,8700
- State government – $70,650
- Educational services, including private, state and local – $67,800
The BLS expects employment opportunities for budget analysts to increase by three percent during the ten-year period leading up to 2029, keeping pace with the overall national job growth trend.
May 2020 U.S. Bureau of Labor Statistics salary and labor market information for Budget Analysts is based on national data, not school-specific information. Conditions in your area may vary. Data accessed April 2021.
Where Do Budget Analysts Work?
Budget analysts are in charge of evaluating an organization’s expenditures. They examine the data that they gather to decide whether or not current spending levels are appropriate. Budget analysts also plan for future expenses and estimate how much money is needed for each budget item. Budget analysts have a wide variety of skills to work in different areas, depending on their interests and abilities.
What Skills Does a Budget Analyst Need?
Analyzing budgets for businesses is a challenging job that requires many years of education and training. Budget analysts must have at least a bachelor’s degree in accounting or finance; sometimes, there are mathematics or business courses requirements. Many budget analysts have master’s degrees and work experience in the field.
Budget analysts need different skills that will allow you to handle your career successfully. Some of those skills include:
- Coming up with innovative solutions
- Identifying risks
- Solving problems
- Communicating effectively
- Being creative, detail-oriented, and organized
Job Outlook for Budget Analysts
Overall, job prospects are good, but competition may be fierce due to the number of people interested in this field. A bachelor’s degree or higher in accounting or another related field is necessary for these positions; some employers prefer candidates with a master’s degree in business administration (MBA). Individuals already in these occupations who want to advance and gain new skills should consider completing a master’s program in accountancy.
Job Titles for Budget Analysts
A budget analyst can have a range of job titles, including financial analyst, finance manager, and fixed income trader.
These individuals often work with other people in the business world, such as accountants and financial planners, to help them understand how to use the money most efficiently.
Specialties in the Field of Budget Analysts
- Fraud examiner: A fraud examiner specialist has the responsibility of investigating and discovering financial fraud.
- Financial analyst: Financial analysts carefully look at financial data and provide valuable insights to their management teams.
- Tax consultant: Tax consultants are the ones who work to ensure that taxes are filed correctly.
- Cost analysis specialist: A cost analysis specialist is a professional who analyzes costs and develops quality assessments.
Professional Organizations for Budget Analysts
- American Association for Budget and Program Analysis (AABPA)
- American Association of Finance and Accounting (AAFA)
- Association of Government Accountants (AGA)
- National Association of State Budget Officers (NASBO)
- The American Finance Association (AFA)