Budgeting is one of the most onerous yet challenging tasks of life management. You have to have some sense of currency - its power and versatility, a firm idea of the things you need and want to pay for and a whole lot of discipline. And that's if you even keep a budget. Polls have consistently shown that over half of the respondents either don't follow their budget or don't bother making one.
At the individual level, though not at all wise, one can get away with that. For a while, at least, and usually only if there's a particularly generous and forgiving associate who's willing to help cover budget shortfalls. However, businesses that cavalier with their finances will soon find themselves having to close up shop. No financial institution worth their assets will approve a loan to a concern that can't do something so basic as managing its finances. Their risk specialists would strenuously advise against it.
No matter how savvy a business owner might be about finance, most see paying for a budget analyst as a worthwhile expense. Competent business operators take in the whole of their concerns - inventory, personnel, marketing and sales, as well as their operating expenses. Amidst all of that, it's easy to overlook a budget item or two. Imagine the trouble they would be in if they forgot to set anything aside for their taxes!
A budget analyst, by contrast, is focused exclusively on the company's finances. They analyse how the business's cash is spent and how much they bring in. They make budget recommendations and determine funding levels for various aspects of the business's operations. To work as a budget analyst, candidates must:
- attain the proper education credentials in a field of study related to finance
- strive to gain relevant experience
- know about the job's particulars and the duties they're expected to perform
- find the client or employer that best matches their skill set and interest
- earn enough that their personal budget doesn't suffer a shortfall
Unlike some sectors of the finance industry, budget analysts rarely work with the public. They don't have to build a client base or worry too much about what the money markets do. Their scope of work is restricted to their employers' financial dealings. This article is for those jobseekers who prefer such working conditions.
What Budget Analysts Do
While your employer's budget isn't in your hands - meaning you won't get to make spending decisions or do any spending, everything about your company's finances is up to you. Your main role will be to keep the budget balanced. There's a good chance you'll work closely with the company's accountants; they'll record all of the debits and credits into the ledgers. Your job is to make sure budget items are properly organised and prioritised so that funds may be allocated and distributed efficiently.
When not working directly on budget-related tasks, you'll compile and analyse data to get an overview of the company's financial health. You will likely share the reports you compile with the company's financial planner so they can recommend growth initiatives to the leadership. Naturally, you'll be tasked to find room in the budget for these projects.
Your third major responsibility is to monitor spending. If any of the business's departments - marketing, purchasing, sales and so on, are in danger of overrunning their budget, you will call their excess spending into question and warn them to not exceed their funding. And if a department routinely overspends, you'll likely have to do a budget review and recommend to management that their budget be raised, provided the overages are justified.
Where Budget Analysts Work
So far, all the talk has been about analysing budgets in some corporations. Indeed, budget analysts work in such environments; they're usually a part of the firm's finance department. Smaller concerns, mom-and-pop shops and small business owners might contract with an independent budget analyst once a year, for a consult. They may even have one on retainer. However, almost half of all budget analyst jobs are with the government.
National governments have many offices: Department for Education, Transportation, Foreign Office and countless more. Each of those departments, offices and ministries is allocated funds from the central government budget office, itself an office staffed with budget analysts. These government departments may have their own budget office that reviews their spending and keeps track of funding. These government positions are not among the hottest jobs in finance but they are steady and recession-proof.
How Much Budget Analysts Earn
What you earn as a budget analyst depends on where you work, how much experience you have and your scope of responsibility. For instance, if you work in a corporation's accounting department with a whole crew of other analysts, you might be assigned to track the budget of only one department rather than the entire company's. Thus, your salary might be in line with other office workers, even those that don't work in finance.
The wages of a budget analyst in government are set by the government. You may receive regularly scheduled pay raises and cost of living adjustments. Your experience as an analyst counts to get you hired but not to determine your salary. Moving up through the ranks will accord you higher levels of pay.
Some analysts choose to work with a financial services firm. Such businesses boast an assortment of finance specialists, including the aforementioned financial planners and analysts of all types. It's generally these budget analysts that small businesses contract with. They might, for instance, have their analyst audit the year's budget records to make sure everything is as it should be and make recommendations for what they could improve on for the upcoming year.
The average annual salary for budget analysts is just under £37,000, though entry-level and contractual positions pay could be much lower. The optimal earning age for these professionals is between 30-50 years. If you're wildly interested in budget analysis but the pay scale scares you, you might consider working as a credit analyst with a bank. Just for a few years, until you get enough experience working in finance. Then, you can command a good wage when you change to your dream analyst job.
Education Required to be a Budget Analyst
It goes without saying that meddling in finance, particularly at the government level, requires at least a four-year degree. Ideally, you should graduate from a math-intensive course of study or one related to finance. These include Economics, Accounting, Business and Finance. If you aim for a government position, studying Political Science or Public Administration would be acceptable alternatives.
Successful candidates prove their commitment to continuing education by taking extracurricular courses. Think about sitting the Chartered Accountant exam or adding a Certified Public Accountant credential to your CV. While still at uni, you can look around for finance-related workshops and seminars. You can also take continuing education finance classes through a massive open online course (MOOC).
What Makes a Good Budget Analyst
Unlike positions in other areas of finance, internships as a budget analyst are much harder to find. Though any experience working in finance is better than none, for future budget analysts, extracurricular development carries as much weight as internship experience. So does personal development; the cultivation of talents and characteristics.
Taking the initiative in furthering your knowledge of finance counts as personal development. Communication, critical thinking and attention to detail are other skills common to budget analysts you need to develop. By now, the saga of two Northumbria University students nearly dying due to a misplaced decimal point is legend. A dramatic enough story but imagine the consequences of misplacing a decimal point in your clients' ledgers.
Meticulousness is the prime personal trait for this métier but communication skills are nearly as vital. Budget analysts don't spend all day hunched over spreadsheets, analysing their contents. They must also prepare and present reports, both in writing and in meetings. Thus, both their written and oral language skills must be top-notch. Their presentation skills, too.
Problem-solving and critical thinking are in short supply in every industry and around the world. Emphasis on developing those skills is ramping up, especially in these precarious economic times. But those skills should already be an integral part of the budget analyst's toolkit. Let's say a company has a brilliant new idea for a product. Now, they need to find the money to fund the new production line, hire new employees and so on.
The budget analyst will find places to cut down on operation capital to divert funds to the new initiative. They will have to project how much the new venture will cost and what its possible returns may be. Unlike brokers - finance professionals who find products for their clients to spend on, budget analysts find the money to pay for their clients' desired products. In that sense, you might say they're counterparts.
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