Accounts Receivable (AR) is the amount to be paid by the customers to the company for the goods or services bought by them. If the investors look at the company’s accounts receivables, they will understand its overall financial status. These payments are also called debt, invoices, or bills. The payment period ranges between one and two months. If the period extends, the receivable becomes Notes Receivable. It lasts for three months and generally does not include interests. Other such receivables are salary, interest, and employee receivables, and tax refunds. let’s read further to know about Account Receivables Interview Questions.
Account Receivables Interview Questions
It is an entry-level job, and the employee working as the Accounts Receivable must maintain the billing system, assist in financial management and analysis, create monthly financial records, investigate the issues, conduct inquiries, and more.
The following are the interview questions related to Account Receivables:
- What Do You Mean By The Customer Master Record?
The customer master record is also known as the customer master database that stores the permanent records of the material or business partner. Using it, the transactions data to be shown to the customer can get controlled. This data must get entered into the system before any transaction occurs. Thus, analysis can get done early. These records can get changed anytime in SAP.
- Why Did You Choose To Work With Us Instead Of Our Competitors?
I have heard many positive things about your company. After realizing the vacancy in your company, I got excited to find the job description and found that many of my skills and expectations fit your job requirements. The job requirements state that the candidate must get ready to work independently. I learned to do so in my previous internship. I belong to a mathematical background and possess communication skills as required by you.
- What Is The Difference Between Accounting And Finance?
A person with an Accounting degree becomes an accountant that collects financial data and builds related documents. A person with a degree in Finance analyses the financial statements and creates financial strategies for the company. The accountants report the current cash flow of the company while, the finance staff members make changes in the financial flow for profits. I have found that financial analysts have more scope and salary than accountants. The accountants need a degree in accounting, and the financial analysts need a degree in Finance.
- How To Prepare The Accounts Receivable Audits?
An internal audit defines the incoming cash flow of the company and assists in the financial planning for the company whereas, an external audit helps in determining the financial mistakes done by the company. To prepare for an audit, I will have to analyze all the financial data to find the imbalances. Reviewing the customer orders will help me to realize whether the AR records match the customer records. Similarly, I will also have to compare the receivables records against the balance sheet, the shipping records against the invoices, the transaction records against the bank deposits, and check the customer account credits.
- How To Determine Whether The Customer Is Worth Of Providing Credits?
Sometimes, the companies provide the products and services to the customers on credit whereas, they might also provide advanced payments to the vendors. It is a part of the business.
To check the creditworthiness of the customer, the company must follow these steps:
- The company must ask the customer to provide the details of his/her current financial deals. If the credit is in a large amount, the company must also ask for the details of the recent financial transactions of the customer. Thus, the company must take all the possible steps to ensure customer capacity to return the credit.
- The Credit Bureau Organizations provide correct information for ensuring the creditworthiness of the customers.
- The company must consider the type of the customer, his/her background, the type of the product, the volume of the order, and the company’s credit policies.
- What Is Reconciliation?
Account Reconciliation plays a vital role in the financial reporting of every organization. The accountants must match the transactions recorded internally within the company and the transactions that appear according to the bank details. They must look for the transactions present recorded internally but not in the bank statements and vice versa. The missing information must get added to the respective records. Similarly, the accountants must get careful further. Thus, the bank must get informed accordingly to get the changes done. Finally, to complete the reconciliation process, the accountant must balance all the records related to the financial transactions.
- How Was Your Experience In Handling Different Automated Accounting Software Applications?
The automated accounting software applications helped me make the calculations with ease, speed, and accuracy. The bookkeeping statements had fewer mistakes, and I got more time to complete the other tasks.
Some of the accounting software applications I used are:
- Zoho Books
Using it, I could customize the price list and offer it to the preferred vendors. I could track the items right from the moment I created them. It also showed me the real-time stock reports of the company.
- Oracle NetSuite
The previous company I worked with used Oracle NetSuite. This software application provided me with real-time analytics. It was so flexible that it could easily get adapted and scaled to new business models.
Quickbooks helped me in tracking the daily expenses and comparing the profits and losses of every year. Thus, I could maintain the financial health of the company.
- Describe A Situation When You Handled A Billing Mistake.
While working for the previous company, I found out that a certain amount got deducted from the bank but, it was not recorded internally by the company. I tracked the employee who made the transaction and asked for the transaction receipt. He told me that the bank faced some network issues that day. Thus, the amount got deducted from the bank but could not get withdrawn. Therefore, I contacted the bank staff, showed them the receipt, provided other related proofs, and asked them for the methods to get the amount credited. I wrote a letter to the bank on behalf of the company to claim the deducted amount. Finally, the amount got credited within a few days.
- What Is An Invoice And What Must It Include?
Invoice is also called tab or bill. It is a commercial document sent by the companies to the clients or customers asking them to pay for the products and services bought from the company. An invoice must contain a unique ID, company details, name, and address of the related customer, a specific reason for sending an invoice, details of the goods and services, amount and VAT amount, the total amount, and the payment terms.
- What Is The Difference Between The Debtors And Creditors?
Both the creditors and debtors are the opposite. The creditors are the individuals or the organizations that lend money to the clients, while the debtors are the individuals or organizations that borrowed money from the creditor. Almost all the companies act as both creditors and debtors. These two terms are a part of the business. Hardly any company that completes all the transactions in cash can stay away from these two concepts. But, it is a rare case.
- How Do You Discuss The Accounting Concepts With The non-accounting Folks?
I perform a quick background check of the individuals I will be communicating with. I try to think according to their perspective. I find the synonyms for complex financial terms related to their backgrounds and explain them accordingly. I like to use simple and real-life examples to get clear. Finally, I ask them to elaborate on what they understand. During my free time, I make them familiar with different accounting and financial terms for their comfort.
- How Must Be The Journal Entry Process?
The Journal is the company book that stores all the transactions of the company. The Journal entry process includes filling in the transaction details in the journal. The accountants can add the details chronologically in the journals and can quickly catch the errors. For writing a Journal, the following elements must get included: The date of entry in the header, index number, account number and name, debit and credit amount, and a footer containing the description of the journal entry.
- What Are The Challenges Related To Accounts Receivable?
Some of the challenges present in the Accounts Receivable process are errors in the bills, late payments, considering overdue receivables as debts, time management, allocating incorrect amounts, customer management, payments management, and cash management. In addition, making invoices takes a lot of time due to the incomplete details, and the customers might feel that they do not get provided with enough time to pay.
- Why Did You Leave Your Previous Job?
My previous job made me learn many things and introduced me to many challenges. But it did not last long. After a year, I understood that there was no growth with the position. The company did not have many job titles at the higher level. It also did not offer internal mobility. Thus, I had to quit the job.
- What Is Factoring?
Factoring occurs when a company gets debt from another company. Some companies consider factoring as invoice discounting. According to factoring, the payments for the accounts receivable get deducted for the buyer, and the debt gets settled. This method is often implemented by exporters. The account receivables get sold to a third party. Various companies that use this method are retail, construction, manufacturing, distribution, transportation, and services.
- Describe A Situation When You Had To Deal With A Disappointed Customer.
Customers are the key source of the company’s income. Customer satisfaction is a must. Some difficult to handle or disappointed customers are uncertain about the business, while some are important. First, I listen to the client. After he/she completes the point, I ask related questions to match the issues with the accounting terms. Instead of challenging the customers quickly, I apologize for the inconvenience and assure them to find the source of the problem. If it is their fault, I politely make them realize and suggest ways to avoid the same mistake in the future.
- What Is The Difference Between Depreciation And Amortization?
Both of them reduce the cost for the assets during their lifetime. But, depreciation offers reduced costs for the tangible assets according to the use of that asset in the specific year, while amortization offers for the intangible assets. Tangible assets are what we can see, feel, smell, or listen to whereas, intangible assets include trademarks, agreements, patents, rights, brand values, and more. Both these terms act as tools for distributing the costs of the assets that are useful for calculating profit and loss. The depreciation of costs is found by either the Straight Line Method or Accelerated Depreciation Method whereas, the acceleration method uses the Straight Line Method.
- Capital Comes Under The Liabilities Or Assets?
The owner invests in the capital, but it gets recorded as the liability in the balance sheet. It is because the business must repay the owner of the capital. Capital is the claim made by the owner against the business assets. Thus, it acts as a special liability. Assets are a combination of liability and capital. The bank balance sheet gets divided into assets and liabilities. The assets mention what the business owns or what it does with its money.
- What Is The Deferred Revenue Expenditure?
It is the expense incurred during the current accounting period, but its effects can be seen in the future. This expenditure can get planned during the current accounting year or subsequent years.
Some examples of deferred revenue expenditure are as follows:
- The heavy expenses of the company for advertising and other promotional activities.
- Losses that occurred due to natural calamities get included as exceptional losses.
- Research and development costs for the company. These are the ongoing costs that cannot get finished off within a year.
- How Do You Meet The Tight Deadlines?
Meeting deadlines is a part of every career but, sometimes the deadlines get too tight. In such a case, I ask for the exact deadline. Then, I prioritize the tasks, understand them clearly, and ask for deadlines from different task providers. I make quick plans related to the major tasks and remove all the possible distractions. I believe that I must not leave things for the last minute. The doubts must get asked in time to avoid any sudden mishap. I also distribute the possible tasks among my inferiors and check the work personally. Finally, if I still cannot complete the task, I ask my senior for help.
- What Are Your Weaknesses?
It might look too unreal if I say that I do not have any weakness. I panic if I commit any mistake with the worry of getting terminated. For that, I have started removing all the possible distractions while working. I check for my mistakes after completing every part of the work and move to the next one. I also ask my peers to have a quick look at my work if I feel too insecure. Similarly, I help them with their work too. Another weakness is that I cannot handle an imbalance in my sleeping schedule due to the workload. To overcome it, I have started taking short coffee naps and decreasing overall time for continuous sleep.
- What Do You Think Are The Responsibilities Of The Accounts Receivable?
It is quite a tedious job, but I like challenges.
The responsibilities of the Accounts Receivables include:
- They must manage the accounts for the business and immediately follow up with the customers who did not pay as promised.
- These individuals maintain the accounting books to help the company track the current financial status and make upcoming financial decisions.
- The key responsibility is to collect the accounts receivable from the customers by communicating with them through emails, standard mails, fax, or telephone.
- Get updated with the accounting-related trends to keep the business updated with the market.
The interviewers will not ask too complex questions to the candidates. Instead, they will focus on the questions related to the basic concepts. They do not need the candidates decorated with a lot of skills. They want the candidates with the basic skills required to handle the Account Receivables. Still, some candidates find it difficult to clear the interview because the questions are basic but tricky. Thus, this article provides some important questions the candidates must go through before appearing for the interview.
Frequently Asked Questions
- What Is The Salary Range For The Accounts Receivable?
Answer: The salary for the Accounts Receivable ranges between $38,000 and $91,000 per annum in the United States. However, the salary range depends on the seniority level.
- What Are Different Job Titles For The Accounts Receivable?
Answer: Different job titles for the Accounts Receivable are as follows:
- Accounts Receivable Analyst.
- Accounts Receivable Supervisor.
- Accounts Receivable Manager.
- Accounts Receivable Clerk I/II/III.
- What Educational Qualifications Are Important For The Role Of The Accounts Receivable?
Answer: Some companies prefer candidates with a High School Diploma, a bachelor’s or a master’s degree, and/or a GED. Some companies want the candidates to have a Certified Public Accountant (CPA) and/or an Accounts Receivable (AR) certification.