The manufacturing industry comes with a variety of unique responsibilities and challenges. These require a cost accountant to earn the right education, learn the right skills, and adapt to advancements in ever-changing technology.
Manufacturing cost accountant duties shouldn’t be taken lightly as the role can have massive implications on the financial standings of the company.
Follow along with us below as we walk through everything you need to know about dominating this niche.
What is a Cost Accountant?
A manufacturing cost accountant is responsible for managing the cost accounting function in a manufacturing company. This includes analyzing and reporting on the costs of:
- Other operational expenses
They are typically responsible for ensuring the company's financial statements accurately reflect the costs associated with the production of goods. When production costs are high, they are often responsible for developing and implementing cost-saving strategies and working with other departments to optimize production processes.
For example, a manufacturing cost accountant may work with the production department and find that a particular piece of a product was being overused, resulting in excess waste. Since the production department doesn’t focus on job costing, they didn’t realize this was happening. Together, they can come up with a plan for riding the waste and consequently lower the cost of production.
From this example alone, you can see the cost accountant position is essential because, when done correctly, they can significantly boost the profits of a business and keep it in compliance with industry accounting standards.
Manufacturing Cost Accountant Job Description
To take a deeper dive into the role of a manufacturing cost accountant, we’ve put together a far-from-all-inclusive list of tasks that would be included in their job description:
- Calculating production costs
- Managing the cost of goods sold (COGS)
- Preparing and analyzing gross margin reports by product, customer, and warehouse
- Analyzing changes in product design, raw materials, or manufacturing methods to determine effects on cost
- Reviewing cost allocation assumptions and rates
- Preparing financial statements
- Owning the month-end close process
- Assisting in budgeting and forecasting activities
- Computing breakeven points
It’s no secret a manufacturing cost accountant plays a critical role in managing the cost accounting function in a manufacturing company. Without their expertise, the company could very well be moving in the wrong direction.
Qualifications for Becoming a Manufacturing Cost Accountant
To be a manufacturing cost accountant, you need to have certain qualifications and skills. Some of these may include:
Education and training requirements
A bachelor's degree in accounting, finance, or a related field is typically required to become a manufacturing cost accountant. However, some employers may require a master's degree.
Coursework in cost accounting is also beneficial as it will provide you with more specific information for the niche.
Certifications and licenses
Many manufacturing cost accountants hold certifications such as Certified Management Accountant (CMA) or Certified Public Accountant (CPA). These certifications show that you have expertise and knowledge of cost accounting.
Skills and qualities
Manufacturing cost accountants should have strong analytical and problem-solving skills and excellent attention to detail. Communication skills are also necessary as they will have to relay information to other departments and management.
Cherries on top of these skills and qualities include:
- A strong work ethic
- The ability to work under pressure
- A commitment to continuous learning and professional development
Challenges of Being a Manufacturing Cost Accountant
While manufacturing cost accountants have an essential job, the role also comes with its challenges.
Manufacturing processes can be complex, and analyzing the costs of them can be tedious and time-consuming. A deep understanding of each manufacturing process is required to get the job done efficiently and accurately.
Balancing cost and quality is another tough part of the job. An attempt to lower manufacturing costs can negatively impact the quality of the product, which can create another set of problems for the company.
Another challenge for manufacturing cost accountants lies in the ever-changing landscape of the industry. Technology is constantly evolving and demanding that they stay up-to-date on trends and best practices. If not, the company could fall behind.
Future of Manufacturing Cost Accounting
Ever-changing manufacturing processes and technology are part of manufacturing cost accounting’s future.
Like most industries, it will benefit from automation, AI (artificial intelligence), and machine learning. These tools will soon be able to produce more accurate and efficient cost analysis which will lessen the manual role of cost accountants.
With less time spent on repetitive manual responsibilities, manufacturing cost accountants will have more time to focus on identifying trends through data analytics and strategizing to help growing companies.
Cloud manufacturing software, like Katana, plus integrations intuitively streamline accounting, inventory, and production to give you the efficiency and accuracy that manufacturing cost accountants are searching for.