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An inventory accountant, also referred to as a cost accountant, handles accounting functions for a business relating to the cost of inventory, meaning merchandise and materials on hand. Professionals with this job description determine inventory accounting methods, analyze inventory reports and monitor all inventory transactions. They also must work well with others and be capable of meeting deadlines.
Companies hiring inventory accountants look for candidates who have a bachelor’s degree in accounting and at least two to four years of experience with inventory accounting. An inventory accountant must possess a good understanding of Generally Accepted Accounting Principles (GAAP) and be able to put them into practice.
Cost accountants are responsible for monitoring all inventory transactions in the general ledger. They must understand different types of inventory methods--such as the average cost method; last-in, first-out (LIFO); and first-in, first-out (FIFO)--and assist in choosing the best method for the company. An inventory accountant also assists in organizing physical inventory counts. Businesses are required to physically count all inventory on hand at least once a year. The accountant oversees this entire process and ensures that it is done efficiently and accurately.
Inventory accountants who work for manufacturing companies must understand and put into practice the process of recording raw goods, overhead costs and variable costs. This professional is responsible for determining inventory costs so that the accountants in other divisions can determine selling prices for goods. To do this, the cost accountant must possess accurate bookkeeping skills.
Analyzing reports is another part of an inventory accountant’s job. Cost accountants ensure that transactions related to inventory are posted correctly. They also monitor these reports to find ways of reducing costs for the company. With inventory, there are often count variances; inventory accountants review these reports, along with actual inventory, to record these variances. They also investigate variances that seem out of line, to avoid fraud within the company.
According to Salary List, the salary for an inventory accountant ranges from $31,000 to $78,945. The salary for this job depends on the industry of the business, the location and the amount of experience or years of service with a particular company.