Are you looking for an easy way to hire an accounts payable expert for your team?
Hiring can be complicated, consisting of multiple rounds of interviews to evaluate how suitable your candidates are for the open role. But there are two ways you can simplify this process.
First, you need an effective way to assess your candidates’ accounts payable skills. You can do this with a skills assessment, which will instantly help you understand your candidates’ abilities.
Next, during the interview phase, you need appropriate interview questions for the accounts payable role.
TestGorilla can help you with both of these steps.
In addition to providing you with a range of skills tests to evaluate your candidates, we’ve put together 25 accounts payable interview questions to help you hire expert accountants for your team.
Table of contents
- 7 general accounts payable interview questions and answers
- 13 accounts payable interview questions and answers related to technical definitions
- 5 behavioral accounts payable interview questions and answers
- When should you use accounts payable interview questions?
- ✅ Find the best accounts payable expert for your team with TestGorilla
7 general accounts payable interview questions and answers
Let’s start with seven general accounts payable interview questions and the answers you should listen for from your candidates.
1. What does “accounts payable” mean?
“Accounts payable” refers to an amount a business owes its suppliers or vendors for their services or goods. The amount is usually outstanding, meaning that the services or goods have not been paid for yet. The total of the outstanding payments owed to vendors will appear on the company’s balance sheet.
If the accounts payable amount increases or decreases, the cash flow statement will show these changes in the total.
2. Explain what a balance sheet is.
Balance sheets are financial documents that show a business’s assets, shareholder equity, and liabilities. Investors use them to compute rates of return and assess the capital structure of an organization.
A balance sheet offers clients or investors an overview of the amount owed by a company and the amount the company is owed. Clients can also use them to analyze an organization’s financial ratios.
3. Explain the difference between credit and debit.
Credit refers to an entry in accounts that increases equity or liability accounts and decreases an expense or asset account. Meanwhile, debit refers to an entry in accounts that decreases equity or liability accounts and increases expense or asset accounts.
Any transaction will typically affect two accounts. Whereas one account will record a debit, the other will register a credit entry. Credits and debits should always be the same, keeping the transaction in balance. Therefore, debits and credits are critical for maintaining balance for accounting transactions.
4. What does “debit balance” mean?
A debit balance is what a customer who has borrowed funds to buy securities owes to a broker or other lender. The term “debit balance” specifically refers to the total amount of money clients or customers need in their accounts after buying the security so that the transaction can take place without any problems.
5. What are the advantages of liquid financial assets?
A company can convert liquid financial assets into cash quickly and easily. The value of some liquid assets may even appreciate over time.
6. What is the main disadvantage of liquid financial assets?
The main disadvantage of liquid financial assets is that their value is only as high as the entity that underlies the asset.
7. What are the two main types of assets?
The two main types of assets are fixed assets and current assets. A fixed asset refers to tangible things that businesses expect to own and use for the long-term, while current assets are those a company intends to sell or use within a year of being reported.
In other words, fixed assets exist physically, like vehicles, land, machines, and equipment for manufacturing, in contrast to some types of intangible assets like trademarks and intellectual property. Current assets can include cash or accounts receivable, stock or cash equivalents, and liquid assets.
13 accounts payable interview questions and answers related to technical definitions
Let’s now look at 13 accounts payable interview questions to test your candidates’ knowledge of essential technical terms.
1. Explain what WCC means.
WCC means “working capital cycle.” It refers to the length of time taken for the net current assets of a company to convert into cash. A long cycle means an enterprise takes a long time to tie up capital without a return.
Organizations should look to keep the working capital cycle short, freeing up cash and increasing a company’s agility.
2. Which phases does the working capital cycle include?
There are four key phases that the working capital cycle includes. These are:
- Cash flow: the inflows and outflows of cash from your enterprise that ensure the cash balance is healthy.
- Receivables: the terms of payment for the money owed for services and goods.
- Selling inventory: the length of time taken to sell the inventory.
- Billing suppliers: the length of time available to make a payment to suppliers.
3. Explain what reconciliation is.
Reconciliation is a process that involves comparing two different accounting records to ensure their figures are correct. The process can also help to confirm that general ledger accounts are accurate and error free.
4. What are liabilities?
In accounting, liabilities are sums of money a business or person owes someone or another company. They are normally settled when the business or person transfers economic benefits, such as services, goods, or money.
Liabilities are found on the balance sheet and can include home loans, personal loans, expenses, and accounts payable.
5. What are financial assets?
Financial assets are liquid assets that get their value from a contractual right. Key examples of financial assets include mutual funds, bank deposits, cash, bonds, and stocks. They don’t need to have a physical form and may not have physical worth as physical assets do.
6. What is equity?
Equity refers to the amount of money shareholders would receive after debts were paid, if liquidation were to occur and the assets were sold. It is the value of a shareholder’s stake in an organization, as shown on the company’s balance sheet.
7. Explain what FBT is.
FBT means “fringe benefit tax.” It’s a type of taxable income for employees, specifically for fringe benefits. Although some fringe benefits are not subject to taxation, such as health insurance and life insurance, others are taxable, including work-related compensations for employees and employee stock options.
For instance, if an organization provides employees with laptops, the taxable income relates to the amount the laptop is used for personal uses.
8. Explain what EFT means.
EFT means “electronic funds transfer” and refers to an electronic transfer of funds or money through an online network. Companies can transfer electronic funds between accounts within the same bank or to a different bank, and there are many different examples of payment systems.
9. Explain what “wire transfer” means in the accounts field.
A wire transfer refers to the process of electronically transferring funds from one person or organization to another. The process is administered by banks or agencies that specialize in administering wire transfers.
10. What does TDS mean?
TDS means “tax deducted at source.” It refers to the process of deducting tax at the source when a deductor must make a payment to a deductee, and the balance will be transferred to the deductee. The deductible amount remains with the government.
11. What does AIS mean?
An AIS is an accounting information system. The term refers to a structural process that businesses use to compile and store, manage and process, and then report the organization’s financial data. Accountants, business analysts, chief financial officers, and managers use AISs to ensure accurate financial reporting.
12. Explain what an invoice is.
Invoices are documents that record transactions carried out between sellers and buyers for the goods or services offered.
13. Explain what GAAP means.
GAAP is an acronym used in accounting to refer to “generally accepted accounting principles.” Organizations compiling financial statements must use the GAAP acronym when doing so.
The generally accepted accounting principles are the standards outlined by the Financial Accounting Standards Board, whose main aim is to enhance the consistency and clarity of financial details and records.
5 behavioral accounts payable interview questions and answers
In this section, you will find five behavioral accounts payable interview questions and possible responses.
1. What steps do you take before you make a payment?
Some of the processes that candidates might mention in response to this question include:
- Checking for holds when the income and expense statement is being coordinated and validated
- Starting the process of approving the invoice if workflow implementation has been completed
- After invoice approval, starting the payment
- Completing the accounting process once the invoice has been endorsed
2. Which process do you use to approve an invoice for payment?
There are a few main steps that accountants should take for invoice approval and payments:
- Ensure the invoice’s details are accurate and check the products or services
- Verify the dates of the invoices and ensure no overlap exists
- Double-check the services or work undertaken with the project manager
- Confirm the details of the vendor
- Record the deadline of the invoice payment
- Schedule the payment in your accounting information system
3. Which information must you have for invoice approval for payments?
Candidates should respond by identifying a few of the critical factors and bits of information essential for invoice approval. For instance, they should know that checking if the goods or services have been acknowledged is vital, and they should note that verifying the amount is essential. They may also mention that checking whether the organization has been expecting a reduction in cost is important.
4. Which documents do you use for invoice verification?
This question refers to the three-way match, a technique used for payment verification and ensuring the invoice is valid. The invoice’s details should match the purchase order and the receiving report, and the accountant should compare these two documents with the invoice to confirm its accuracy.
5. Which accounting software have you used in previous roles?
Although candidates may not have always used the accounting software your organization uses, look for evidence that they can adapt to new software and are eager to learn a new system.
For example, they may have used software like Zoho Books, QuickBooks, or FreeAgent. But if your organization doesn’t use these, you should try to figure out during the interview whether they could learn how to use your software.
When should you use accounts payable interview questions?
Always remember to use accounts payable interview questions when the candidate sourcing process has finished and after giving your candidates a skills assessment.
Completing the hiring process in this order means that you won’t waste time interviewing unskilled or unqualified applicants.
With a skills assessment complete, you can interview your candidates confident that they all have the accounting skills you are looking for.
Find the best accounts payable expert for your team with TestGorilla
Hiring isn’t always easy. We get that. But you can significantly reduce your recruitment woes and ensure you don’t mis-hire by adopting a tried-and-tested hiring process.
Remember, part of your ideal hiring process should include selecting skills assessments, and another part should involve selecting the best accounts payable interview questions.
Finding the best accounts payable expert for your team is easier than you think if you do it with TestGorilla.
Take a look at our library of skills tests and start working on your list of interview questions to hire the best talent for your organization. Get started for free today