Budget analysts provide important expertise on planning and managing finances for a wide range of organizations including educational institutions, health systems, government, and businesses. Budget analysts prepare data on resources, obligations, and programs. They provide management information that connects resources to organizational goals. The work of the budget analyst supports executive decisions on funding levels and allocation of resources. Budget analysts play an important role in nearly every type of organization.
Where Do Budget Analysts Work?
In For-Profit Businesses
Budget analysts assess resources and the effectiveness of spending to produce profits. The budget analyst must take into account the interests of the for-profit company and communicate in a way that executives and stakeholders can understand. Budget analysts are the in-house experts that provide answers to routine and unexpected questions about a company’s budget and day-to-day finances. The knowledge component is vital as is the ability to communicate on the complexities if the budget, revisions, adjustments, and amendments.
Budget analysts must have an ability to solve complex problems. The for-profit organization goal is to increase profits, and that often depends upon customer reliance on its business information. The work of the budget analyst must be accurate because it supports the organization’s official financial information. Internal organization budgets usually involve proposals from departments, divisions, or other structures. Budget analysts must synthesize and coordinate the requests and proposals from the organizational elements.
In the Public Sector
Budget analysts help determine the impact of spending on the organization’s goals such as delivering services to the intended beneficiaries. Using a mid-grade federal salary as an average, a seasoned budget analyst would earn approximately (GS-12) $75,000 per year. Again, using federal standards, a senior budget analyst (GS-14) would earn about $120,000 per year.
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Typical Functions of this Career
One of the main tasks of the budget analyst is find the best way to develop and plan a budget. The analysts work with program officers to establish needs and determine priorities. Budget analysis consists of insight and methodology; analysts improve as professional experience adds depth and understanding of the impact of budget options and decisions. The analyst will primarily focus on data, compilations, reports, and assessments.
Most information will be objective data like percentages, averages, or numerical totals. Some important information involves observations and well-formed opinions. This type of information is frequent and potentially valuable for improving the impact of budget resources. The value of qualitative information may depend on the analyst’s knowledge and experience.
Budgets govern the inner operations of the organization such as salary, payroll, inventory, materials and supplies. The budget process also must support the external missions of the organization. Events outside of the organization may be unpredictable and subject to significant changes. Budget analysts play key roles in adjusting the use of resources such as when the organization must revise its budget and re-program funds.
Large and medium-sized businesses and nearly all public bodies use full-time budget analysts. Some organizations must, and others chose to combine budget work with other job functions. Budget analysts evaluate costs and benefits and solve complex problems.
Possible Job Titles, Duties and Day in the Life
Budget analysts can have a variety of job titles including budget technician, budget analyst, senior budget analyst, budget officer, program analyst, financial analyst, and senior analyst. Within budget department and budget organizations, budget analysts have management titles such as Director, Manager, Supervisor, Division, Branch and Office Head. Budget assignments often come up as responses to unplanned events.
Budget Analyst Duties
Most organizations operate within annual budgets. Many projects and activities have specific budgets within the overall organizational budgetary plan. In the medium to large organizations, budgets play a critical role in management. Budget analysts often work in teams and task forces to plan resources to focus on specific priorities.
The duties include the below-listed items:
The cost-benefit analysis is a powerful tool used by budget analysts to solve complex problems. The costs benefits analysis(CBA) assigns a dollar value to every part of a transaction. The parts that benefit the company are the strengths and the parts that fail to add value or detract from the mission are the negatives. The preliminary analysis yields a difference in dollars. Costs can include the long-term changes from the transaction under study, and the dollar values assigned to those results are important. When using a CBA, analysts can research past budgets and results to help establish costs parameters and mission benefits.
Successful analysts demonstrate the ability to use written and verbal forms of argument. They are critical skills and abilities. Budget analysts must create budget information and make proposals for management or executive action. In a typical day in the life of a budget analyst, communications are a vital part. Budget Analyst often must propose and defend actions that are critical to the organization. They may have to make persuasive presentations to oversight bodies, such as Boards of Directors or to government entities like legislative committees. Some information must go to the public, and public communications test the analyst’s ability to communicate complex issues in an understandable way.
Public sector budget analysis tends to focus on achieving a public policy goal. The overriding purpose is to deliver benefits to the intended beneficiaries. There is a blurring of lines between management analysis and budget analysis in that both must assess the impact of resources on the carrying out the public policy. Budget analysts use a similar dataset but focus on financing, fiscal planning, and future resources and spending.
Federal, State, and Local Governments
Budgets are part of the legal existence of most government agencies. There is a three-part annual process. They must prepare annual budgets as part of the authorization and appropriation process. The federal budget involves about $4 trillion and it includes large parts of the US economy such as healthcare and military budgets. The Federal budget is a multi-year process of planning, approvals, Congressional authorization, and execution. Current year oversight and Post budget year audits are also part of the budget process as they affect the planning for future federal budgets. State governments have similar processes, and much of state and local budgets relate to federal budget decisions.
Governments and other public bodies hire and utilize a significant number of budget analysts. They perform, oversee, and advise on the fundamental phases of budget administration.
Private sector budget analysts have a prominent role in executive decision making. Budgets must support organizational actions. In the private sector, there tend to be fewer broad structures and a wide variety of organizational circumstances. The private sector has a variety of stakeholders that have an important interest in the organization’s actions.
The budget analyst’s private sector role includes compliance. Analysts help control actions that may exceed authority or violate policies, controls, or external rules, regulations, and laws. Private sector budget processes typically involve operating budgets and capital budgets. While mastering every detail, budget analysts must prepare summaries for decision makers. These critical communications support operating and strategic decision-making.
Education and Degree Options
Formal education requirements typically include a bachelor’s degree in fields like accounting, finance, government, business, and public administration. Because the modern work environment uses data analysis and advanced computer functions and these skills are much in demand, budget analysts will benefit from coursework with content covering statistics, mathematics, computer programming, data management, and data analysis.
Advanced degrees and concentrated graduate level study can enhance your prospects for getting a position with upward potential and senior budget analyst positions. The fields for master’s degree study or postgraduate coursework include accounting, finance, business, public administration, economics, statistics, political science, or sociology. Employers may seek various combinations to suit their organization and work environment. Technical enterprises may emphasize budget analysts that learn and can work with cutting-edge technology. Students may even choose to earn a masters of business administration (MBA) with a concentration in budget analysis from a business school.
Education and experience in related fields can be an advantage for budget analysts and help them do well in job interviews. The knowledge and skills which are needed by budget analysts center on analytic skills, communications, dexterity with general mathematics, and computerized data management systems and software. In the public sector, budgeting is a fundamental function. Social studies and government are excellent background areas. Many state and federal government functions have strict budgetary guidelines and oversight includes a strong focus on the impact of public dollars on the beneficiaries.
Certification, Credentials, and Licensure
Government budget analysts can get a Certified Government Financial Manager Credential from the Association of Government Accountants. The CGFM is recognized by federal and state public employers as an important qualification for employment of a career budget analyst. A bachelor’s degree is required, 24 credit hours of learning from courses in financial management traning, and 80 hours of continuing education over three years.
In the internet age, budget analysis requires an understanding of computerized records, data analysis, and enterprise software. The budget analysts’ work product generally cannot be more reliable than the raw and processed data on which they depend. The accuracy of financial data has internal and external consequences.
Some specialized sectors have special roles for budget analysts; these sectors include banking, healthcare, and finance.
Healthcare is a heavily regulated industry with many public and private financial entanglements that require detailed attention to budget and compliance with U.S. law. Healthcare budget analysts must track technology and other advances such as blockchain record keeping innovations.
E-commerce and financial markets use analysts to maximize efficiency and drive profits. The complex workings of financial markets and the constant change in e-commerce require agile thinkers with a high degree of comfort working with technology.
Budget analysts gain exposure to complex organizational problems and serve a role often at the center of proposals for resolution and the decision-making process of companies. The role places the budget analyst in an ideal position to gain in-depth knowledge about the organization or enterprise, subject matter expertise, and work experience in managing severe problems and fiscal crisis situations. This, in addition to growth from continuing education from a college or university, will mean a long, fruitful career path and plenty of opportunities within various corporate entities in a variety of industries.
Budget analysts can also receive promotions to higher level budget administration positions within their organizations. Budget analysts can move into management analysis and public administration as management executives. Budget administration is an essential part of public administration and analysts with strong records and meaningful experience make excellent candidates and a great resource within a company for leadership roles. Communication skills are vital for budget analysts to receive the chance to move on to these next challenges.
Parties both within and outside of the organization may rely on the analyst’s findings and conclusions. Budget analysts require strong analytical skills at a minimum. They must work under time constraints and process a variety of data, points of view, and information. They must be able to communicate their analytic findings, numbers, and support recommendations in writing and oral presentations with full competence.
Taking the time to fully analyze a budget is detailed work, and it requires attention to each budget item. Analysts must be able to work with general math and complex statistics. Some information is anecdotal and based on qualitative reports and observations. Other types of information may be in data compilations, reports, and analytic work from other analysts. A successful budget analyst will demonstrate an understanding of all types of information, and ease with relevant software, spreadsheets, and financial analysis standards.