Budget analysts help firms and organizations analyze their own financials, create and execute budgets, estimate future financials, and increase profits. A budget analyst is someone with sound financial analysis skills who understands how to review numbers, make them work within constraints, and analyze data to make accurate predictions. In this career guide, we’ll introduce you to a career as a budget analyst.
Budget Analyst Summary
- The need for sound financial analysis will spur job growth for budget analysts.
- A bachelor’s degree generally is the minimum educational requirement, but some employers prefer or require a master’s degree.
- Candidates with a master’s degree are expected to have the best opportunities.
- About 41 percent of all budget analysts work in government.
Working as a Budget Analyst
Budget analysts help organizations allocate their financial resources. They develop, analyze, and execute budgets, as well as estimate future financial needs for private businesses, nonprofit organizations, and government agencies. In private sector firms, a budget analyst’s main responsibility is to examine the budget and seek new ways to improve efficiency and increase profits. In nonprofit and governmental organizations, which usually are not concerned with profits, analysts try to find the most efficient way to distribute funds and other resources among various departments and programs.
In addition to managing an organization’s budget, analysts are often involved in program performance evaluation, policy analysis, and the drafting of budget-related legislation. At times, they also conduct training sessions for company or government personnel regarding new budget procedures.
At the beginning of each budget cycle, managers and department heads submit operational and financial proposals to budget analysts for review. These plans outline the organization’s programs, estimate the financial needs of these programs, and propose funding initiatives to meet those needs. Analysts then examine these budget estimates and proposals for completeness, accuracy, and conformance with established procedures, regulations, and organizational objectives. Sometimes they employ cost-benefit analyses to review financial requests, assess program tradeoffs, and explore alternative funding methods. They also examine past budgets and research economic and financial developments that affect the organization’s income and expenditures.
After the initial review process, budget analysts consolidate individual departmental budgets into operating and capital budget summaries. These summaries contain statements that argue for or against funding requests. Budget summaries are then submitted to senior management, or as is often the case in government organizations, to appointed or elected officials. Budget analysts then help the chief operating officer, agency head, or other top managers analyze the proposed plan and devise possible alternatives if the projected results are unsatisfactory. The final decision to approve the budget usually is made by the organization head in a private firm, or by elected officials, such as State legislators, in government.
Throughout the year, analysts periodically monitor the budget by reviewing reports and accounting records to determine if allocated funds have been spent as specified. If deviations appear between the approved budget and actual spending, budget analysts may write a report explaining the variations and recommending revised procedures. To avoid or alleviate deficits, budget analysts may recommend program cuts or a reallocation of excess funds. They also inform program managers and others within the organization of the status and availability of funds in different accounts.
Data and statistical analysis software has greatly increased the amount of data and information that budget analysts can compile, review, and produce. Analysts use spreadsheet, database, and financial analysis software to improve their understanding of different budgeting options and to provide accurate, up-to-date information to agency leaders. In addition, many organizations are beginning to incorporate Enterprise Resource Planning (ERP) programs into their budget-making process. ERP programs can consolidate all of an organization’s operating information into a single computer system, which helps analysts estimate the effects that a budget alteration will have on each part of an organization.
Work environment. Budget analysts usually work in a comfortable office setting. They spend the majority of their time working independently, compiling and analyzing data and preparing budget proposals. Some budget analysts travel to obtain budget details first-hand or to personally verify funding allocation.
The schedules of budget analysts vary throughout the budget cycle, and many are required to work additional hours during the initial development, mid-year reviews, and final reviews of budgets. The pressures of deadlines and tight work schedules can be stressful. In 2008, about 48 percent of budget analysts worked 40 hours per week, while about 11 percent worked more than 50 hours per week.
Training, Other Qualifications, and Advancement
A bachelor’s degree usually is the minimum educational requirement for budget analyst jobs, but some organizations prefer or require a master’s degree. Entry-level budget analysts usually begin with limited responsibilities but can be promoted to intermediate-level positions within 1 to 2 years, and to senior positions with additional experience.
Education and training. Employers generally require budget analysts to have at least a bachelor’s degree, but some prefer or require a master’s degree. Within the Federal Government, a bachelor’s degree in any field is sufficient for an entry-level budget analyst position. State and local governments have varying requirements, but usually require a bachelor’s degree in one of many areas, including accounting, finance, business, public administration, economics, statistics, political science, or sociology. Because developing a budget requires strong numerical and analytical skills, courses in statistics or accounting are helpful, regardless of the prospective budget analyst’s major field of study. Some States may require a master’s degree. Occasionally, budget-related or finance-related work experience can be substituted for formal education.
In most organizations, budget analysts usually learn the job by working through one complete budget cycle. During the cycle, which typically lasts 1 year, analysts become familiar with the various steps involved in the budgeting process. Many budget analysts also take professional development classes throughout their careers.
Other qualifications. Budget analysts must abide by strict ethical standards. Integrity, objectivity, and confidentiality are all essential when dealing with financial information, and budget analysts must avoid any personal conflicts of interest. Most budget analysts also need mathematical skills and should be able to use software packages, including spreadsheet, database, data-mining, and financial analysis programs. Strong oral and written communication skills also are essential, because budget analysts must prepare, present, and defend budget proposals to decision makers. In addition, budget analysts must be able to work under strict time constraints.
Certification and advancement. Entry-level budget analysts usually begin with limited responsibilities, working under close supervision. Capable analysts can be promoted to intermediate-level positions within 1 to 2 years, and to senior positions with additional experience. Because of the importance and high visibility of their jobs, senior budget analysts may be promoted to management positions in various parts of their organizations, or with other organizations with which they have worked.
Government budget analysts employed at the Federal, State, or local level may earn the Certified Government Financial Manager designation granted by Advancing Government Accountability, an organization that represents government accountability officers. To earn this designation, candidates must have a minimum of a bachelor’s degree, 24 credit hours of study in financial management, and 2 years of professional-level experience in governmental financial management. They also must pass a series of three exams that cover topics on the governmental environment; governmental accounting, financial reporting, and budgeting; and governmental financial management and control. To maintain the designation, individuals must complete 80 hours of continuing professional education every 2 years.
Employment As a Budget Analyst
Budget analysts held 67,200 jobs in 2008. Government is a major employer, accounting for 41 percent of budget analyst jobs. Budget analysts were also employed in manufacturing; management services; professional, scientific, and technical services; and schools.
Budget analyst jobs are expected to increase faster than average. Candidates with a master’s degree are expected to have the best opportunities.
Employment change. Employment of budget analysts is expected to increase by 15 percent between 2008 and 2018, faster than the average for all occupations. Employment growth will be driven by the continuing demand for sound financial analysis in both the public and the private sectors.
As businesses and other organizations become more complex and specialized, budget planning and financial control will demand greater attention. In recent years, computer applications used in budget analysis have become increasingly sophisticated, allowing more data to be analyzed and processed in a shorter amount of time. As a result, agency leaders have begun to demand more data, analyses, and other types of information relevant to the budgeting process. This has increased the workload of budget analysts, and created the need for more workers. As this process continues, demand for budget analysts will grow.
Job prospects. Job openings will result from employment growth and from the need to replace workers who retire or leave the occupation for other reasons. Candidates with a master’s degree are expected to have the best opportunities. Familiarity with spreadsheet, database, data-mining, financial-analysis, and Enterprise Resource Planning software packages also should enhance a jobseeker’s prospects.
Projections data from the National Employment Matrix
|NOTE: Data in this table are rounded.
Earnings for Budget Analysts
Wages of budget analysts vary by experience, education, and employer. Median annual wages of budget analysts in May 2008 were $65,320. The middle 50 percent earned between $52,290 and $82,150. The lowest 10 percent earned less than $42,470, and the highest 10 percent earned more than $100,360. Median annual wages in the industries employing the largest numbers of budget analysts were:
|Aerospace product and parts manufacturing
|Federal Executive Branch
|Management of companies and enterprises
|Colleges, universities, and professional schools
|Elementary and secondary schools
The average annual salary in March 2009 for budget analysts employed by the Federal Government was $80,456.
Budget analysts have an important part in ensuring that firms spend their capital wisely and make a good return on their investment. A budget analyst is a key part of a finance team.