Career In Cost Accountant

Cost Accountant

In the 21st century, every business comes out with a mission and certain goals. Attaining those objectives and targets is almost impossible without specific budgeting, meeting or discussing. That’s what cost accountants do. Cost Accountant is one amongst the prestigious and reputed professionals in the finance and business world.

Cost accountant is a person whose role is to record all the costs incurred in a business that can be used and practised to enhance its management. The job of cost accountants is to do profitability analysis and budget preparation.

In India, the Institute of Cost and Management Accountants of India (CMA) conducts various examinations to offer this honoured position Cost Accountant in the corporate world.

'Cost Accountant', the job name generally designates an entry-level management accounting profession. Numerous of such accountants carry baccalaureate degrees in accounting or finance and many of them choose to willingly become Certified Management Accountants. A cost accountant is basically a financial professional who determines the actual costs incorporated in providing a service or manufacturing a product. They perform their task by scrutinizing all the expenses associated with the supply chain.

It is a practice that has been developed to equip managers with a structure to monitor the day-to-day finances of the business. The process of recording, classifying, analyzing, investigating, summarizing as well as allocating payments associated with a process and then generating several courses of actions for controlling costs is known as Cost Accounting.

To accomplish the short- and long-term targets as well as expand the reach of an organization, we require Cost Accountants. There is a wide scope for this highly regarded designation across the world to prepare company’s financial statements.

Objectives of Cost Accountants:-

Cost accountants have a key role in the company's decision-making process. This system helps you to comprehend better about the organization’s fixed and fickle costs so that you can optimize your budget and allocate resources as per the requirement. It also interprets cost-volume-profit connections and the costs that occur over a particular time period.

Today, the Cost Accountants/Cost Analysts plays a major job in the business management and are responsible for: planning, studying and collecting data to ascertain the costs of business activity including raw material purchases, inventory, and labor.

Here are some objectives that every cost accountant of any company has to meet:

• Determining selling price
• Cost planning and controlling
• Providing information for decision making
• Introduces cost reduction programs
• Ascertaining costing profit
• Beneficial to workers
• Facilitating the preparation of financial and other statements.
• Finds out idle capacity

Eligibility Criteria for becoming Cost Accountants-

Becoming a Cost Accountant is no mean feat. It takes years of education, diligence, and determination to accomplish this position. To be called as a Cost Accountant, candidates need to pass various examination exams such as foundation, intermediate and final course regulated by the CMA Institute.

• The basic eligibility required to be a Cost Accountant is that candidates must have passed 12th standard or an equivalent exam from any recognized board.  
• Graduates from any discipline can apply for this course except the Fine Arts.
• The age of the candidate must be 17 years of age for the Foundation course.
• Candidates should not be less than 18 years of age for enrolling the Intermediate programme.

Skills Set Required to become a Cost Accountant:-

To acquire this high-profile position, candidates need to develop a preferred set of skills and attributes including education, previous job experience, certifications, and technical skills. Here are the basic skills and abilities that are required to be a successful Cost Accountant:

• Critical Thinking
• Judgment and Decision Making
• Social Perceptiveness
• Time Management & Multi-Tasking
• Management of Personnel Resources and Financial Resources
• Negotiation Skills
• Meticulous Planning
• Good knowledge of the interpretation of the law
• Impeccable understanding of business.
• Great organization
• Operations Analysis
• Exemplary Communication Skills
• Focus on the client
• Creative
• Commitment to the sector
• Extreme trustworthiness
• Great communication skills.

Process to become a Cost Accountant-

Becoming a Cost Accountant is like holding a feather in your cap. To get admission in Cost and Management Accountancy (CMA), one needs to get registered in The Institute of Cost Accountants of India (ICAI). It is the apex professional body which regulates the developing process for CMA from conducting examination and supervising the overall procedure till awarding the candidate’s certificate for that particular profession. This Institution was earlier known as the Institute of Cost and Works Accountant of India (ICWAI).

Cost Accountancy is an exceptional and evergreen subject which is highly demanded in the Industry for its dignified profession. The CAM degree which is provided after qualifying the exam is approved and recognized by the Government of India.

Cost and Management Accountant (CMA) comprises of three levels:

➤Foundation Course

➤Intermediate Course

➤The Final Course

1. The Foundation Course:

The first step towards achieving this coveted position is the foundation course. The foundation course has a duration of eight months and students who have passed class 12th can apply for this course easily. This initial level of this level includes four papers comprising:

Paper 1- Organization and Management Fundamentals

Paper 2- Accounting

Paper 3- Economics and Business Fundamentals

Paper 4- Business Mathematics and Statistics Fundamentals

2- Intermediate Course:

After completing the foundation course, candidates need to go through the Intermediate course of CMA. The course has a minimum duration of ten months

and candidates who are 18 years or above can apply for intermediate course. The Intermediate course contains two groups including eight papers such as Accountancy, Financial Management, Taxation, Laws, Ethics and Governance, and the Audit, etc.

Course of Study:

Group-I

Paper 5: Financial Accounting

Paper 6: Commercial & Industrial Laws and Auditing

1. Commercial & Industrial Law
2. Auditing

Paper 7: Applied Direct Taxation

Group-II

Paper 8: Cost and Management Accounting

Paper 9: Operation Management and Information Systems

1. Operation Management
2. Information Systems

Paper 10: Applied Indirect Taxes

3- The Final Course: This is the almost the last step towards accomplishing the dream of becoming Cost Accountant. Aspirants can apply for the final course after passing all the eight papers of Intermediate Course. The minimum duration of this last course is about 18 months. This final course includes eight papers and subjects like Corporate Laws, Financial Management, Cost Management, and Tax Management, etc.

Syllabus of final exam covers:

• All the 8 papers
• Dissertation (5000 words)
• Computer (100 hours)
• Modular training  (15 days)
• Audit / Industrial training (6 months)

Computer Training:

After qualifying all the above three stages, the aspirants have to attend a 100 hours of computer training which is mandatory for every appearing candidates in the intermediate course.

Modular Training:

It is obligatory for all the qualified to attain the modular training session also after the computer training part. Modular training enables candidates to complete divisions or modules of training as per their time plan and availability.

The motto behind the Training:-

• Exposure to environments under which different organizations work
• Providing on-the-job experience of practical aspects of Cost and Management and Accounting
• Developing disciplined attitude required by a professional
• Awareness of ethical values in professional work.

Qualifying Conditions:-

Success is the result of perfection, diligence, learning from failure, commitment, and persistence. So, to achieve success in CMA, candidates need to score a 40 % of marks in every paper and overall 60 % of marks including all the papers.

Candidates who qualify all the above stages get the membership of the ICAI and becomes a full-fledged professional as a Cost and Management Accountant. This is one of the most coveted and reputed profession one could ever have.  

Responsibilities of a Cost Accountant:-

Every person in this world comes with certain duties and responsibilities that he needs to do while living. Same as in companies, every job profile or designation has some roles and functions needed to be performed in the office. So, to know the actual job description of a Cost Accountant, you must know the functions this position has to perform within an organization:  

• Plan, study, analyze, and assemble data to ascertain the costs of business activities.
• To work with computer technology related to accounting.
• To give advice to managerial staff about revenues and costs to boost cash flow
• Analyze financial information and prepare reports accordingly.
• Implements cost accounting procedures to raise the company’s business.
• Ascertain standard costs and update them appropriately
• Conducts an inventory reserve report on a quarterly basis and generates a report for senior administration
• Monitor costs of raw materials, labour, transportation, administrative costs, overheads etc. in an industry
• Classify costs accurately
• Create PPV reports and interpret decisions
• Maintain and analyze the general ledger and reconcile balance sheets
• Analyze costs of raw materials and other immature supplies and create a cost-benefit analysis for changing vendors.

Career Prospects for Cost Accountants:

Career as Cost Accountants is like holding a respectable and reputable profession one can achieve only after years of study. Candidates with ICWA degree are extremely demanded in every sector across the world including the government sector, private enterprises, development agencies, banking & finance area, education & training domains. With the progression in the economy, the demands for cost and management experts are growing promptly. Students can get optimum job opportunities as well as numerous amenities related to jobs.

In the current generation, the increasing competitive pressure and stress have forced multiple organizations and enterprises to interlock cost accountancy into their own management systems. A CA’s role in management has become significant enough to descend or save the business because of their skills and abilities. Their work is to collect, assimilate, organize and analyze financial data from each point and then elucidating those figures for the administration. The CWA now plays an essential part of every corporate strategy or plan to obtain the result they want to achieve for their organization.

Here are the job profiles in which candidates can specialize after pursuing the CMA course: 

Job Titles:

• Finance Director
• Managing Director
• Associate Professor
• Accountant
• Cost Controller
• Chief Auditor
• Cost Accountant
• Chief Accountant
• Chief Internal Auditor
• Financial Consultant
• Managing Director
• Financial Controller

Areas of Employment:

• Management of public & private sector enterprises
• Financial institutions
• All India Cost Accounts Service (ICAS)
• Teaching
• Consultancy firms
• Independent practice
• Developmental agencies
• Stock exchanges
• Training & research organizations
• Public utility sector

Some reputed companies that hire Cost Accountants are Micro Inks Limited, Inext Infotech Services, Zexus Air Services Pvt Ltd, Government and Private Institutions, ALTRET Industries Pvt. Ltd etc.

➥ An ICWA degree holders can attain lucrative career packages after qualifying this CMA exam. A Cost Accountant with late-career experience includes employees with an experience greater than 20 years and get optimum salary packages starting from 7 -8 lakhs up to beyond limits. A fresher employee can expect to earn an average cumulative salary of around Rs. 25,000 to 50,000 or more.

The estimated average salary for a Cost Accountant can range between 5 lakhs to 10 lakhs per annum. Experience matters a lot in every organization and even enhances his knowledge, skills, abilities well to have a strong influence on the salary packages for this high profile job.