Whether they’re chief executive officers, chief operational managers or corporate presidents, business leaders are tasked with making a variety of consequential decisions each day that can affect multiple aspects of their organization, from the supply chain to payroll and more. Budget analysts, despite not directly leading businesses themselves, play a uniquely important role in the fulfillment of those key decisions by assisting firms with the management of their finances. In short, they help organizations better understand what they’re able to do regarding decisions that involve money — as so many do.
What is a budget analyst? What kinds of specific services does a budget analyst render? What qualifications and capabilities do you need to become one? How many budget analyst positions are out there in today’s economy? With an online Bachelor of Science in Finance from the University of Alabama at Birmingham Collat School of Business, you’ll become highly experienced in this field’s core competencies, which employers are looking for to better meet their financial management needs.
What Is a Budget Analyst?
A budget analyst is a professional who provides clients and organizations with an all-inclusive assessment of their financial situation. They may work directly for the federal government, colleges and universities or private companies, or serve those clients as part of private firms or even as independent consultants. Budget analysts not only provide in-depth details about an organization’s finances, but also offer recommendations on where to cut costs or to increase revenue to achieve goals.
What Are the Primary Responsibilities of a Budget Analyst?
Because budget analysts work in many different capacities and are employed by various entities in both the public and private sector, their day-to-day tasks can vary significantly. Here are a few general duties that fall under the purview of a budget analyst, according to the U.S. Bureau of Labor Statistics:
- Collaborate with management to develop an organization’s budget over a specific time period.
- Review budget proposals from managers to determine if they’re realistic.
- Analyze funding requests to ensure they’re accurate and are in compliance with financial oversight protocols.
- Elaborate on why additional funding may be needed if requests are made to local, state or federal government agencies.
- Consult with management about the status of funds for a business in terms of what’s available and what more may be required to accomplish an objective.
- Consolidate budgets for the entirety of an organization if a business has multiple departments, units or locations.
- Monitor spending to avoid going over budget and make adjustments where needed.
While some of these tasks can be accomplished independently, a budget analyst’s duties are almost always done at the behest of someone else or in collaboration with that person. These may be project managers, program managers or top executives, such as CEOs or COOs.
How Does a Budget Analyst Differ from a Financial Analyst?
Because they perform many of the same functions and hold several of the same responsibilities, financial analyst and budget analyst are often mistaken for one another or are considered one and the same. They play slightly different roles, however, in terms of their focus.
While a budget analyst helps managers and business executives work with what they have — i.e. their existing budget — and assess expense histories, a financial analyst is more forward-looking. For example, a financial analyst may provide private organizations with an informed opinion on how to structure their finances based on market trends or economic conditions. They may also provide insight on a business’ competitors through data analysis and contextualize what earnings reports for those competitors mean for the company.
Additionally, financial analysts often specialize in certain kinds of analysis. As the BLS notes, these include:
- Financial risk specialists
- Fund managers
- Investment analysts
- Portfolio managers
- Ratings analysts
- Securities analysts
While budget analysts, like financial analysts, perform multiple roles, their main focus is to an organization’s budget — from a planning, monitoring and advising perspective. Because every business has a budget, budget analyst positions tend to be more widely available than specialty financial analysis roles. In fact, this role was ranked in the top 5 on Forbes’ annual “Highest Paying, Fastest Growing Jobs” list for 2021.
What Degree Is Needed To Become a Budget Analyst?
There is a high level of complexity to budget analysis, involving a variety of tasks and responsibilities that include data analysis, mathematical modeling and problem-solving. Many of these capabilities are obtained or honed in college, which is why a bachelor’s degree is typically required to enter this career path. Academic programs that teach typical budget analyst functions as part of the curriculum include accounting, business, social science as well as finance. Some employers — be they private firms or government agencies — may be more selective in their hiring process and require applicants to have a master’s degree.
More than anything else, regardless of the degree program, employers need to know their prospective hires have the skills to be successful in their role. You’ll obtain them and more with an online bachelor’s degree in Finance from the University of Alabama at Birmingham Collat School of Business. The rigorous, results-driven curriculum found within the online program supplies students with the capabilities to thrive in the workplace as a budget analyst. It can also prepare you for other programs that can provide you with additional experience and qualifications, making you a more valuable candidate for a prospective employer.
For example, if you’re considering working for or on behalf of the federal government, you may want to obtain certification as a Certified Government Financial Manager, or CGFM. Available through the Association of Government Accountants, CGFM is a credential that indicates a professional is capable of performing certain specialized accounting tasks at the varying levels of government — local, state and federal. While not required for a budget analyst, accountants pursue this credential to demonstrate their proficiency in government accounting and to open the door to more work opportunities. A CGFM can do the same for a budget analyst.
As with a bachelor’s degree or master’s degree, there are a number of requirements that a certified government financial manager must satisfy to obtain the CGFM credential. The AGA categories them as the Four E’s: (1) Ethics, (2) Education,(3) Examinations and (4) Experience:
All CGFM recipients are obligated to abide by a code of ethics, or principles, in all their professions. These include always seeking to serve the public’s best interest, upholding the highest standards of professionalism and integrity, objectivity in carrying out duties to their clients and always keeping clients’ information confidential.
CGFM certification rests on the successful completion of a comprehensive exam, but candidates must demonstrate academic proficiency to be eligible to take the test. This includes having at least a bachelor’s degree from an accredited college or University, a hard copy of the official transcript stating what college-level classes were completed, and that the degree was conferred by a college or university that is based in the United States. If the degree program was from a higher learning institution outside the U.S., an evaluation report must accompany the transcript that corroborates what the foreign degree is equivalent to in the U.S.
The most involved component to CGFM certification is the exam, and there are several that students must pass:
- Government Environment
- Government Accounting, Financial Reporting and Budgeting
- Government Financial Management and Control
Each exam is timed (135 minutes to complete) and has the exact same number of questions (115 each, for a total of 345 in all). They’re designed to be as comprehensive as possible so students can demonstrate a mastery of the public sector, including its hierarchical structure (i.e. federal, state local), the interrelationships the levels have with one another, how financial management differs in the public sector versus private sector, the features of government budgetary approaches, legislation that affects governmental cash management, the concept of fiduciary responsibility and much more.
The AGA uses a pass/fail reporting format wto inform test takers about their performance on the exam. If they answer enough of the questions correctly, they’re told that they met the minimum requirements. But if they didn’t, the report is more specific, detailing not only their comprehensive score but how they scored in all of the sections. Test takers must reach a score of at least 500 in order to pass. The best someone can do on the test is a raw score of 700, while the lowest is 200.
While passing the exam is a major aspect to CGFM certification, those seeking the award still have work to do before the credential is conferred — in the literal sense of the term. Candidates need a minimum of two years’ worth of work experience in a government financial management role. This work can be done at the behest of local, state, tribal or federal government agencies or through private sector employment, so long as the work encompasses government financial management. This can include auditing or evaluating government contract compliance, government budget formulation, execution or analysis, government financial report design or preparation, investigation of financially related fraud or criminal activities in government, oversight of government financial operations, oversight of government financial performance and several other potential work responsibilities.
The work experience requirement of CGFM certification can occur before or after taking the comprehensive exam.
As with other certifications — in fields beyond financial management, such as in medicine or law — CGFM recipients must go to certain lengths to maintain certification. This includes paying the annual CGFM renewal fee before certification expires and participating in 80 hours of continuing professional education every two years. The continuing education must pertain to government financial management, and four of those 80 hours should be related to ethics.
The AGA also urges CGFM holders to maintain documentation that corroborates the continuing professional education hours they completed, should the AGA request this information.
CGFM certification is not mandatory as a budget analyst, but certain bachelor’s degree and master’s degree programs can prepare you for some of the financial management topics that this program covers more in depth.
How Long Does It Take to Become a Budget Analyst?
The answer largely hinges on where you are now from a work experience and academic standpoint, relative to your goals of becoming a budget analyst. If you have already obtained a bachelor’s degree and seek to obtain an online Bachelor of Science through the University of Alabama Collat School of Business, it may be just a few years, depending on which general education credits from your alma mater transfer over. But if you’re newly out of high school, a bachelor’s degree in finance takes about four years. The only thing left to do is find a job.
What Is the Job Outlook for a Budget Analyst?
The hiring climate for virtually any profession is a constantly moving target. Much depends on how the economy is functioning and how many people are applying at any given moment. That said, the BLS estimates a 5% increase in the number of budget analysts in the U.S. over the next decade. That translates to around 4,300 openings per year between now and 2030.
What Kinds of Skills Are the Best to Have for Success as a Budget Analyst?
Superior with Analysis: As their title suggests, budget analysts spend a great deal of their time combing and dissecting data and documents — including profit loss statements, balance sheets, invoices and earnings statements. This is all done to help business leaders make plans regarding their budgetary needs and goals. Budget analysts need to be highly proficient with data analysis so they can make the informed recommendations to their employers.
Ability to Communicate and Explain Things Simply: From budgetary slack to coefficient of determination and exponential smoothing, these terms may be simple to decipher for those professionals who work with numbers all day long, but they’re difficult to understand for the average individual. Budget analysts must have an ability to clearly explain concepts, trends or cost analyses, so decision-makers have the information they need to proceed with the matters at hand.
Attentive to the Details: If a business is going to reach its budget goals or avoid spending more than it has, a budget analyst can’t ballpark their calculations. It’s imperative that all their estimates add up, which entails being very detail-oriented.
Solid Math Skills: Calculators and financial management software make complex computations as simple as point and click. However, budget analysts nonetheless need a solid grounding in mathematics and arithmetic, given that their guidance is focused on funding and figuring out how much money is available or needed.
These skill sets can all be worked on over time in your personal life or through academic coursework, but if you consider yourself to be naturally gifted in one or all of these areas, it bodes well for your success in this career path.
How Much Does a Budget Analyst Make in Annual Income
A budget analyst stands to earn a competitive wage, whether they’re new to the profession or a seasoned professional. According to BLS estimates, the median annual salary for budget analysts nationwide in 2021 was $81,410. That’s assuming the person has a bachelor’s degree; they may be able to earn more than that if they have a master’s degree, the pay could be more than that.
Yet even without a graduate degree, the income level for this position has the potential to reach a six-figure salary. BLS data shows the top 10% earned $124,440 in 2021 and the median was just over $98,000 for budget analysts employed in professional, scientific and technical services.
If you’re in high school or changing professions, the budget analyst career path may be just what you’re looking for in a line of work that can allow you to best utilize your skills and improve upon them on an ongoing basis. Your journey to that career destination starts with a Bachelor of Science in Finance from the University of Alabama at Birmingham Collat School of Business. To learn more, connect with an enrollment advisor.