Printer Friendly

Budget analysts: so much to do, so little to do it with.

Government and private organizations are constrained by the scarcity of resources. As a result, organizations develop budgets to allocate their resources among alternative uses. Budgets serve as a financial plan for controlling future operations and as a detailed analysis for the allocation of labor, capital, and other resources. It is an integral part of the decisionmaking process in most corporations and government agencies (and a few families). Budget analysts play a primary role in the research, analysis, and development of budgets.

In smaller firms, accountants or controllers sometimes undertake budget analysis. Larger firms often establish a separate budget department, which is overseen by the controller or comptroller.

Analysts in both private industry and the public sector perform essentially the same work with a few minor variations. In private industry, a budget analyst's job centers around examining, analyzing, and seeking new ways to improve efficiency and increase profits. While analysts working in government possess no means to increase profits, they too are interested in finding the most efficient distribution of funds and resources among various departments and programs.

Nature of the Work

The analyst's major responsibility is to provide advice and technical assistance regarding the development and execution of annual budgets. Analysts begin by examining past and current budgets, researching economic developments, and reviewing company objectives. This allows analysts to assess an organization's position and establish objectives for the coming year. The planning process also addresses policies, such as the extent to which expansion should be financed by revenue or debt. Another issue could be the distribution of funds, labor, and capital.

Managers and department heads submit proposed operating and financial plans to budget analysts for review These plans outline expected programs, costs, and expenses, as well as the capital expenditures needed to finance these programs. For example, sales managers prepare sales projections and operating plans for various sales activities and advertising campaigns their department expects to pursue in the coming year, along with the financial requirements needed to undertake these projects.

Analysts examine the estimates for completeness, accuracy, and conformance with procedures and regulations. Budget analysts critically review these requests by employing cost-benefit analysis, determining program tradeoffs, and exploring alternative funding methods. Analysts also evaluate these requests in terms of the agency's priorities and financial resources.

After this review, budget analysts consolidate the department budgets into operating and financial budget summaries. They submit preliminary budgets to the president or top-level managers with comments and recommendations justifying and supporting the funding requests. At this point, budget analysts help the president or other top managers analyze the proposed plan and devise possible altematives. The final decisions on the budget, however, are made by the president or other highranking officials in the firm or govemment agency

Analysts assist in developing procedural guidelines and policies governing the development, formulation, and maintenance of the budget. If necessary, analysts conduct training sessions for company personnel on budget procedures.

Throughout the year, analysts monitor revenues and expenditures by reviewing reports and accounting records to determine if allocated funds have been expended as specified. When deviations appear between actual performance and the proposed budge,,, budget analysts draft a report explaining their causes and recommend adjustments to offset changes in programs, staffing levels, or available funds. They may also recommend new budget procedures. Budget analysts keep program managers and others-either within or outside their organization-informed on the funds in different budget accounts and their distribution.

Earnings and Working Conditions

Salaries of 'budget analysts vary widely by experience, education, and employer. According to a 1988 survey of financial and data processing fields conducted by Robert Half international, Inc., average annual starting salaries of budget analysts ranged from $20,500 to $23,000 for those working in medium size firms, and from $21,000 to $25,000 for those employed by larger organizations. Analysts with 1 to 3 years of experience earned from $23,000 to $29,500 a year in medium-size firms and from $25,000 to $33,000 in larger companies. Senior analysts eamed from $28,000 to $35,000 in medium-size firms and from $29,000 to $38,500 in larger firms. Eamings of managers in this field ranged from $35,500 to $41,500 in medium-size firms to $38,500 to $55,000 in larger organizations.

In the Federal Government, budget analysts generally started at $15,200 a year in 1988. Candidates with a master's degree or I year of financial experience began at $18,800. The average salary of all budget analysts employed by the Federal Government was $32,400 in 1987.

Budget analysts generally work in an office and adhere to a 40-hour-a-week schedule. However, during the initial development and final review of budgets, analysts often experience the pressure of deadlines and tight work schedules. The work during these periods is stressful, and analysts are usually required to work overtime.

Budget analysts spend the majority of their time working independently However, their routine is often interrupted by special budget requests, meetings, and training sessions. Analysts attend meetings to justify budget requests and to keep officials informed on the status and availability of funds in different budget accounts. They may also hold training sessions to instruct personnel on the policies and procedures that are necessary to implement new budget processes. Some travel to regional offices may be required.

Qualifications and Advancement

Most private firms and govemment agencies require candidates for budget analyst positions to have at least a bachelor's degree in business administration, accounting, finance, economics, or some closely related field. A growing number of employers prefer that candidates possess a master's degree, while some large corporations only employ certified public accountants to conduct budget analysis. However, experience can often be substituted for a degree. Some companies prefer to promote from within; therefore, competent accounting or payroll clerks and other clerical staff who have worked closely with the budget process can often advance to entry level budget analyst positions even if they do not meet the educational requirements.

Because analysts must be able to analyze, compare, and interpret data, courses in mathematics, statistics, and computer science are highly recommended. A background in computers is particularly important, especially a working knowledge of financial software packages-such as Lotus 1-2-3. In recent years, computers have had great impact on budget analysis, allowing analysts to process and manipulate complex variations on budget data quickly Current studies indicate that the bulk of financial analyses performed by organizations are automated.

Those seeking a career as a budget analyst must also possess strong interpersonal skills because of the frequent interaction with various departments within their organization. They must be able to make sound judgments and recommendations under strict time constraints. Analysts must also have the oral and written communication skills needed to prepare and present budget proposals effectively

Entry level budget analysts may receive some formal training when they begin their jobs. However, most employers feel that the best training a budget analyst can receive is working through one complete budget cycle. During the cycle, analysts become familiar with all the steps involved in the budgeting process.

The Federal Govemment, on the other hand, offers extensive on-the-job and classroom training for entry level analysts. Some of the classes offered include budget execution, budget formulation, Federal budget process, and planning, programming, and budget systems. Analysts are encouraged to take classes throughout their careers.

Beginning analysts usually learn their jobs working under a supervisor. Capable entry level analysts can be promoted into intermediate level positions within I or 2 years and then into senior positions within a few more years. In many instances, analysts are able to capitalize on their high visibility with top-level managers to advance into management positions within their company In addition, because a budget analyst's financial and analytical skills are vital in any organization, analysts are often able to transfer to other organizations.

For a budget analyst, progressing to a higher level means added budgeting responsibility and increased supervisory duties. In the Federal Government, for example, beginning budget analysts compare projected costs with prior expenditures; consolidate and enter data prepared by others; and study regulations concerning budget practices. As analysts progress, their responsibilities increase to developing and formulating budget estimates and justification statements; performing in-depth analyses of budget requests; writing statements supporting funding requests; and advising program managers and others on the status and availability of funds in different budget activities.

Employment and Outlook

Budget analysts-who are employed throughout private industry and government-held about 60,000 jobs in 1988. A large percentage of budget analysts were employed in the manufacturing sector, particularly in the transportation equipment and electrical and electronic machinery industries.

Federal, State, and local govemments accounted for approximately 30 percent of all budget analyst jobs. The Department of Defense employed over half of the budget analysts working for the Federal Govemment. The educational services industry was the next largest public-sector employer of budget analysts, accounting for 10 percent of all jobs.

The employment of budget analysts is expected to grow about as fast as the average for all occupations through the year 2000. Most job openings, however, should result from the need to replace experienced budget analysts who transfer to other occupations or leave the labor force.

Expanding use of automation may make analysts more productive, allowing them to process more data in less time. However, because of the growing complexity of business and the increasing specialization of functions within organizations, more attention is being given to better planning and financial control. Many companies will continue to rely heavily on budget analysts to examine, analyze, and develop budgets to help integrate the fragmented parts of their organization and to allocate labor, capital, and other resources in the most efficient manner. Managers will continue to use budgets as a vehicle to plan, coordinate, control, and evaluate activities within their organizations more effectively

While the demand for budget analysts is increasing, competition for budget analyst jobs should remain keen because of the increasing number of qualified applicants. Job opportunities are usually best for candidates with a college degree and, increasingly, for those with a master's. In some cases, experience is more beneficial than a degree and can be used to offset lack of education. People with a background in finance and accounting generally are in a better position than those without these qualifications. A working knowledge of computer financial software packages can also enhance one's employment opportunities in this field.

The work perfon-ned by budget analysts is an important function in every organization. Financial and budget reports must be completed even during periods of economic slowdowns. Therefore, employment of budget analysts generally is not adversely affected during times when some other workers are laid off.

Related Occupations

Budget analysts analyze, review, and interpret financial data; make recommendations; and assist in the implementation of new ideas. Other occupations which utilize these skills include accountants and auditors, credit analysts, economists, financial analysts, financial managers, and loan officers.

Sources of Additional Information

Information about career opportunities as a budget analyst may be available from your State or local employment service.

Persons interested in working as a budget analyst in the Federal Govemment can obtain information from

U.S. Office of Personnel Management 1900 E Street NW Washington, DC 20415.
COPYRIGHT 1989 U.S. Government Printing Office
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:McGregor, Elizabeth
Publication:Occupational Outlook Quarterly
Date:Mar 22, 1989
Previous Article:Giving credit where it is due: loan and credit clerks, credit checkers and credit authorizers.
Next Article:You're a what? Herpetologist.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters