cost accounting manager salary

cost accounting manager salary

The Impact of Industry and Experience on Cost Accounting Manager Salaries

1. Introduction to Cost Accounting Manager Roles and Responsibilities

Cost accounting managers require specific skills and knowledge to provide the type of information needed to assist management in the decision-making and control processes. Given the current business environment, cost accounting manager skills have changed dramatically. The traditional role of the cost accountant was to design costing systems that made it possible to monitor operating efficiencies. At the time, much of the costs were labor-related and the factory environment was extremely simple. Any inefficiencies could generally be attributed to a failure of the line supervisor. Most product, and therefore product diversity, was relatively simple so that accurate costing systems could be designed with a minimum of sophistication and cost. In addition, there was a high probability of the survival of the family-oriented business. Consequently, cost accountants could expect to invest a career of service to only one organization. The most reputable certified public accounting firms and educational institutions were extremely cost-effective tools to train and develop the skills of these cost accountants.

Entering the 21st century, cost accounting managers play an integral role in corporate planning and control activities. The rapid pace of technological change, together with the complexity of today’s business environment, requires cost accounting managers to provide timely, relevant information that can be used to develop growth strategies, improve operating performance, and measure efficiencies. Specifically, cost accounting managers are requested to address the root of financial problems and play an integral role in formulating and implementing corrective actions. If they are to be effective in this endeavor, they must be involved in the evaluation and monitoring of resources consumed by the firm, as well as the controls that are developed to assure that the efficient use of resources is maximized.

2. Factors Influencing Cost Accounting Manager Salaries

This table also provides salary transitions at the same firm. Here, the net annual salary change after accounting for the increases in the other components of compensation ranges from $200 to $320 though the executive is somewhere else. Notice that the executive enjoyed bonus increases during the transition of plus 100-145 percent of the base amount. This measure of performance seems to account for an executive’s salary while they work at the same employer. However, other measures will determine if they remain at the employer. Promotions boost annual salary and bonuses whether the manager meets the wall. Management duties are performed more effectively if the firm receives a net benefit from increased expected performance even though the manager is receiving a higher level of compensation.

In the first instance, consider the impact of industry and experience on managers’ own salaries. These two factors routinely prove to be primary contributors to executive compensation in most labor markets. First, firms in some industries simply generate more average profits than others. They capture this value for their executives. Similarly, executives in some industries demand larger compensation packages compared with other industries. These effects separate industries. Certain definitions of experience degree at other firms or the current firm range rewards for the same manager across industries. Taking an executive for a January 1, 1990, survey $100,000 in total compensation, and age 46, the manager is expected to gain almost $1,000 annually in total compensation, given the same industry assignment, if they work in a different industry one year ahead. If they work for the same firm, the gain is less at about $400. Note that salary gains are more than offset by more rapid gains in bonuses.

3. Case Studies: Salaries of Cost Accounting Managers in Various Industries

The study interests not just those planning a career in cost accounting, but also those in top management who are interested in setting compensation levels that attract and retain high-quality personnel. Organizations may also find the results useful in making salary offers where they are limited to one benchmark level or wish to distinguish between candidates. The discussion of the eight significant variables clarifies how compensation then varies with gender, experience, education, industry, and their interactions. The managers’ perspective provides for the flexibility that often seems to be missing from their pay packages.

This study, constituting the first or second empirical examination of factors influencing the salaries of cost accountants, reveals that experience and industry are significant determinants of salaries. The respondents in this study were cost accounting managers working in the telephone, battery, brewery, food, steel, education, machinery, chemical, oil and gas, mining, and service industries. While the education industry, along with the number of years of experience, emerges as significant determinants of compensation, working in the education sector associates with lower salary levels as compared to those in any other industry.

4. Strategies for Advancing Your Career and Maximizing Your Salary Potential

Inasmuch as your potential promotion and other personnel decisions will be largely made by your manager, make sure that your interests are aligned with those of your boss. Your relationship as a decision maker can then complement the controlling role of your boss. If your personal goals are incongruent with those of your superior, you could face the most brutal obstacle to the advancement of your career that could possibly exist. A mismatch that is destructive to both parties might arise and cause your career to hinder. Reach your full potential as rapidly as possible through dedication, delegation, motivation, and constructive effort. Always have an eager, enthusiastic attitude to contribute. The appreciation of your superiors will be boundless and accordingly easily rewarded. Use your remuneration at this level as an investment in furthering your goals, more than simply making a living. Be sure to invest in successful efforts for education, motivation, and ultimately, an advancement through contributions to the employer’s profits. Use your unique experiences by excelling in an environment that offers rapid advancement, using your wisdom, knowledge, intuition, and creativity to redefine success on your own terms.

Being a part of the business environment that you have chosen to work for is crucial to its success. The more contributory value you add, the better for the organization and for your career as well. Become the best expert in your position, not only in understanding accounting but also as it relates to every aspect of the business, and get involved in making the basic decisions that increase the effectiveness of your industry. Always see the big picture. It is not only important to personally develop depth in your own chosen area of expertise, but also to obtain experience in understanding and managing all of the various business issues in a well-rounded manner. Focus your attention not only on your own area of concern (the Accounting Department controlling function), but broaden your company understanding with involvement in other areas of the company. Personal development should include the management of business operations, the company’s strategy for managing the risk inherent in your chosen industry, and looking after the business needs and interests of your employees, not only the numbers.

When choosing a career, position, or area in which to gain experience and knowledge, always select ones that are complex, highly competitive, and offer great opportunities. Once you have made your selection, be aggressive. Seek out every possible opportunity within the field during the formative stages of your career by working hard and being an enthusiastic, energetic asset to the organization.

One of the quickest ways to improve your chances of making more money and your value to your employer is to know which industries offer the best opportunities. It is a given that the more complex and competitive an industry, the better the rewards. Many more opportunities for advancement are available to those professionals who gain broad-based experience in a variety of working environments. In general, the following suggestions are made to increase your earning power and marketability. These will in turn make you a desirable employee for present and future employers, thereby providing you with a wealth of opportunities to choose from in either advancing your current career or choosing a new one.