30+ Accounts Payable Analyst Interview Questions and Answers

PO invoices are based on purchase orders while NON-PO invoices are not.

• PO invoices are invoices that are associated with a purchase order.

• NON-PO invoices are invoices that are not associated with a purchase order.

• PO invoices require a purchase order number to be included on the invoice.

• NON-PO invoices do not require a purchase order number to be included on the invoice.

• PO invoices are typically used for larger purchases or ongoing services.

• NON-PO invoices are typically used f...read more

An invoice number is a unique identifier assigned to each invoice for tracking and reference purposes.

• Invoice number helps in identifying and tracking the payment status of a particular invoice.

• It is important for record-keeping and audit purposes.

• It helps in avoiding duplicate payments and ensures accuracy in accounting.

• For example, if a company receives multiple invoices from the same vendor, each invoice will have a unique invoice number for easy identification and trackin...read more

The P2P Cycle refers to the end-to-end process of purchasing goods or services, from requisition to payment.

• The cycle starts with a purchase requisition, where a request is made for goods or services.

• The requisition is then approved by the appropriate authority.

• A purchase order is created based on the approved requisition, specifying the details of the purchase.

• The purchase order is sent to the supplier or vendor.

• Upon receiving the goods or services, the receiving department ...read more

Accounts payable process is the set of procedures and policies that a company follows to manage its outstanding invoices and payments to vendors.

• Receiving and verifying invoices from vendors

• Matching invoices with purchase orders and receiving reports

• Obtaining approval for payment

• Entering invoices into the accounting system

• Preparing and issuing payments to vendors

• Reconciling vendor statements

• Maintaining accurate records of all transactions

Accruals are expenses incurred but not yet paid or recorded in the books.

• Accruals are a way of recognizing expenses in the period they are incurred, rather than when they are paid.

• They are recorded as a liability on the balance sheet until they are paid.

• Examples of accruals include salaries and wages, interest, and taxes.

• Accruals are important for accurate financial reporting and forecasting.

3 way match compares purchase order, goods receipt and invoice. 4 way match adds payment to the comparison.

• 3 way match ensures that the quantity and price on the invoice match the purchase order and goods receipt.

• 4 way match adds the payment to the comparison to ensure that the vendor is paid correctly.

• This process helps prevent overpayment or underpayment to vendors.

• Example: A company orders 100 units of a product, receives 100 units, and is invoiced for 100 units at the agr...read more

Procure to pay process involves obtaining goods or services and paying for them.

• Procurement department identifies the need for goods or services

• Vendor selection and negotiation

• Purchase order creation and approval

• Goods or services receipt and inspection

• Invoice receipt and verification

• Payment processing and reconciliation

• Vendor management and performance evaluation

PO invoice is based on a purchase order while non-PO invoice is not.

• PO invoice is generated when a purchase order is created and received by the vendor.

• Non-PO invoice is generated when there is no purchase order involved.

• PO invoice has a reference to the purchase order number and details.

• Non-PO invoice does not have a reference to any purchase order.

• PO invoice is easier to process and match with the purchase order.

• Non-PO invoice requires more manual effort to process and matc...read more

Journal entry of Accounts Payable

• Debit Accounts Payable account for the amount owed

• Credit Cash or Bank account for the amount paid

• If a discount is taken, credit the Discount Received account

• If a purchase return is made, credit the Purchase Returns and Allowances account

Accounts payable is the amount of money a company owes to its vendors or suppliers for goods or services received.

• It is a liability account in the company's general ledger.

• It includes invoices, bills, and other expenses that need to be paid.

• It is important for managing cash flow and maintaining good relationships with vendors.

• Examples include rent, utilities, and inventory purchases.

• Accounts payable can be managed through software systems like SAP or QuickBooks.

PO refers to Purchase Order while Non PO refers to expenses without a purchase order.

• PO is a document that outlines the details of a purchase, including the items or services being purchased, the quantity, and the agreed-upon price.

• Non PO expenses are those that do not require a purchase order, such as office supplies or travel expenses.

• POs are typically used for larger purchases or purchases from new vendors, while non PO expenses are more routine and smaller in nature.

• POs h...read more

Debit balance is the amount owed by a customer to a supplier or vendor.

• Debit balance is the opposite of credit balance.

• It represents a positive balance in the account.

• It indicates that the customer owes money to the supplier or vendor.

• For example, if a customer has a debit balance of $500, it means they owe $500 to the supplier or vendor.

Payment to Clint can be made through various methods such as wire transfer, check, or online payment portals.

• Determine the payment method preferred by Clint

• Obtain necessary payment information such as account number and routing number

• Ensure that there are sufficient funds to cover the payment

• Record the payment in the appropriate accounting system

Balance sheet is a financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time.

• Balance sheet is a snapshot of a company's financial position.

• It includes assets (what the company owns), liabilities (what the company owes), and shareholders' equity (the company's net worth).

• The balance sheet follows the accounting equation: Assets = Liabilities + Shareholders' Equity.

• It helps in assessing the financial health and stabilit...read more

The code used in SAP for Accounts Payable is typically vendor codes, general ledger account codes, and tax codes.

• Vendor codes are used to identify specific vendors for payment processing.

• General ledger account codes are used to categorize expenses and revenues.

• Tax codes are used to determine the tax treatment of transactions.

• Examples: Vendor code - V001, General ledger account code - 6000, Tax code - TX

Duplicate payment is when a vendor is paid twice for the same invoice or service.

• Occurs when a payment is made for the same invoice or service more than once

• Can happen due to errors in the payment system or manual errors

• Can result in financial loss for the company

• Can be prevented by implementing proper controls and checks

• Example: Paying an invoice twice due to a system glitch

Order confirmation is a document that verifies the details of a purchase order and confirms that it has been received and accepted by the supplier.

• Order confirmation is sent by the supplier to the buyer after receiving a purchase order.

• It includes details such as order number, item description, quantity, price, delivery date, and payment terms.

• It serves as a proof of agreement between the buyer and supplier and helps to avoid any misunderstandings or disputes.

• Order confirmati...read more

Payments can get rejected in the P2P cycle due to various reasons such as incorrect invoice details, insufficient funds, or discrepancies in the purchase order.

• Incorrect invoice details such as wrong amount, incorrect vendor information, or missing payment terms can lead to payment rejection.

• Insufficient funds in the account designated for payments can cause rejection of the transaction.

• Discrepancies between the purchase order, invoice, and payment can result in rejection of ...read more

Account reconciliation is the process of comparing financial records to ensure they match and resolving any discrepancies.

• Account reconciliation involves comparing two sets of records, such as bank statements and internal financial records, to ensure they match.

• Any discrepancies found during the reconciliation process must be investigated and resolved.

• Account reconciliation helps ensure the accuracy and integrity of financial data.

• Examples of account reconciliation include re...read more

P2P stands for Procure-to-Pay, a process that involves purchasing goods or services and paying for them.

• P2P is a cycle that starts with identifying the need for a product or service and ends with payment.

• It includes steps like requisition, purchase order creation, invoice processing, and payment.

• P2P helps organizations streamline their procurement process and reduce costs.

• Examples of P2P software include SAP Ariba, Coupa, and Oracle Procurement Cloud.

Invoice to Pay Cycle is the process of receiving and processing invoices, verifying them, and making payments to vendors.

• The cycle starts with receiving invoices from vendors

• Invoices are then verified for accuracy and completeness

• The invoices are then approved for payment

• Payments are made to vendors either through check or electronic transfer

• The cycle ends with reconciling payments and closing out the invoice

• The cycle can take anywhere from a few days to several weeks dependi...read more

Golden rules of accounts refer to basic principles of accounting that must be followed for accurate financial reporting.

• The first golden rule is to maintain accurate records of all financial transactions.

• The second golden rule is to ensure that all transactions are recorded in the correct accounting period.

• The third golden rule is to ensure that all transactions are recorded in the correct account.

• The fourth golden rule is to ensure that all transactions are recorded at their...read more

PTP stands for Procure-to-Pay, which is the process of obtaining and paying for goods and services from suppliers.

• The process starts with the procurement team identifying the need for goods or services.

• Once the need is identified, the team requests quotes or proposals from potential suppliers.

• After selecting a supplier, a purchase order is created and sent to the supplier.

• Upon receiving the goods or services, the supplier sends an invoice to the accounts payable team.

• The acco...read more

To improve the process, we can automate manual tasks, implement better controls, and streamline communication.

• Automate manual tasks such as data entry and invoice processing to reduce errors and save time.

• Implement better controls such as segregation of duties and approval workflows to prevent fraud and ensure accuracy.

• Streamline communication between departments and vendors to resolve issues quickly and improve relationships.

• Use technology such as OCR and AI to improve data ...read more

GST is a tax levied on the supply of goods and services in India. E-invoice is a digital invoice generated and authenticated by the GST Network.

• GST stands for Goods and Services Tax

• It is a value-added tax levied on the supply of goods and services in India

• It was introduced in 2017 to replace multiple indirect taxes

• E-invoice is a digital invoice generated and authenticated by the GST Network

• It is mandatory for businesses with a turnover of more than 500 crore to generate e-inv...read more

Golden rules of accounting are basic principles that guide the accounting process.

• The first golden rule is the rule of debit and credit.

• The second golden rule is the rule of assets and liabilities.

• The third golden rule is the rule of income and expenses.

• These rules help ensure accuracy and consistency in financial reporting.

• For example, the rule of debit and credit states that for every debit entry, there must be a corresponding credit entry.

3 way matching is a process used in accounting to ensure that the purchase order, invoice, and receiving report all match before payment is made.

• Involves comparing the purchase order with the invoice and the receiving report

• Helps to prevent errors and fraud in the accounts payable process

• Ensures that the company is only paying for goods or services that were actually received

• Example: A company orders 100 units of a product, receives 100 units, and is invoiced for 100 units - ...read more

First pass yield is the percentage of units that pass through a process correctly the first time without rework.

• First pass yield is calculated by dividing the number of units that pass inspection on the first attempt by the total number of units produced.

• It is a measure of process efficiency and quality.

• A high first pass yield indicates a well-functioning process with minimal defects and rework.

• Example: If a manufacturing plant produces 100 units and 90 of them pass inspectio...read more

Accounts payable is the amount of money a company owes to its suppliers or vendors for goods or services purchased on credit.

• Accounts payable represents a company's short-term financial obligations to pay for goods or services received.

• It is listed as a liability on the company's balance sheet.

• Accounts payable is typically settled within a specific period, often 30, 60, or 90 days.

• Examples include invoices from suppliers for raw materials, utilities, or services rendered.

• Mana...read more

Accounts payable is the amount of money a company owes to its suppliers or vendors for goods or services purchased on credit.

• Accounts payable is a liability on the balance sheet

• It represents the company's obligation to pay off short-term debts

• AP is typically recorded when an invoice is received from a supplier

• Common examples include utility bills, office supplies, and inventory purchases