Accounts Payable- Interview guide - Questions and Answers

Understand the end-to-end purchase process flow from identifying need to payment processing. Learn how requisitions, approvals, supplier evaluation, negotiations, purchase orders, goods receipt, and invoices ensure compliant, value-driven procurement.

Understand how a purchase requisition initiates procurement, passes through approvals, and leads to a purchase order that confirms item descriptions, quantities, prices, and supplier details.

Explore different invoices used in accounts payable, including standard invoices, proforma, commercial invoices, credit notes, debit notes, self-billing invoices, progress invoices, consolidated invoices, and e-invoices.

Use OCR scanning to convert supplier invoices into digital, searchable data. Validate and index invoice numbers, dates, vendor details, line items, and amounts for search in a document management system.

Receipting in the source-to-pay process verifies delivery against the PO with quantity checks, quality inspection, and acceptance decisions, while documenting results and notifying accounts payable for payment.

Explore two-way, three-way, and four-way match processes that verify purchase orders (PO), goods receipts (GR), and supplier invoices, with quality inspection reports (QIR) to ensure accurate, validated payments.

Master invoice validation checks, including supplier information verification against the vendor master file, address validation, data entry accuracy, and purchase order matching.

Navigate invoice disputes by reviewing pricing, quantities, delivery, taxes, and vendor details against contracts and purchase orders, then negotiate adjustments or credits and issue revised invoices.

Understand the payment process in the source-to-pay cycle, from invoice verification and approval to payment initiation, recording, remittance advice, and reconciliation across methods like EFT, ACH, checks, and virtual cards.

Identify and record month end accruals to reflect expenses incurred but not yet recorded, using invoice, GRN, and trend based methods under accrual accounting to match revenues and expenses.

Explore the key reconciliations in the source to pay process, including invoice, purchase order, payment, supplier statement, financial, and tax reconciliations, and their impact on accuracy, transparency, and supplier relationships.

Discover key controls in accounts payable, including segregation of duties, authorization limits, three-way matching, sequential approvals, duplicate payment prevention, vendor master file maintenance, contract term alignment, and periodic reconciliations.

Master procure to pay by tracing the end-to-end flow from identifying purchase requirements and issuing purchase orders to goods receipt, invoice processing, and vendor payments.

Identify purchase requirements and determine quantities based on current and future needs, factoring delivery lead times and budget constraints; obtain justification and approval before submitting the request.

User departments raise purchase requisitions via a workflow form, detailing quantity, specifications, timelines, and whether one-time or recurring, for approval under an authorization matrix and procurement submission.

Learn how procurement processes raise purchase orders by checking inventory, replenishing from vendors when stock reaches reorder levels or minimum inventory quantity, and handling services with existing or new vendors.

Empanel new vendors by analyzing requirements and issuing RFPs or RFQs to obtain at least three codes. Onboard after due diligence and contract negotiations, considering credit rating and pricing terms.

Maintain a consistent vendor master with names, contacts, addresses, bank details, terms, currency, and tax IDs and validations, ensuring changes are initiated by one person and approved by another.

quarterly cleansing maintains a healthy vendor base by reviewing inactive vendors for deactivation, managing one-time vendors and emergency payments, and blacklisting noncompliant vendors to prevent issues.

Issue purchase orders for goods or services, including standard, blanket, plan, or contract-based orders, aligned with delegation of authority and approval matrix; establish payment basis against invoices and prevent duplication.

Manage receipt of services and goods using GRN or MRN to verify acceptance, support three-way or four-way invoice matching, apply tolerance limits, and process purchase returns with credit notes.

Understand how to handle vendor invoices, including item details, prices, taxes, and payment due dates, and perform a preliminary review to accept or reject based on key information.

Learn how OCR-based intelligent data capture scans invoice images into text, extracting vendor details, invoice data, due date, purchase order number, currency, tax, and line items, with manual corrections.

Learn how to perform 2-way, 3-way, and 4-way invoice matching to validate purchase orders, invoices, GRNs, and service acceptance, and classify expenses as CapEx or OpEx.

Identify and verify supporting documents for expenses, including contract work, proof of delivery, attendance sheets, timesheets, vehicle logs, and trip sheets, and confirm consumption via meter readings for payable accuracy.

Navigate invoice reviews and resolve disputes by notifying the vendor, seeking clarifications or resubmissions, rejecting incorrect invoices with reasons, and informing the buyer or user department.

Guide the invoice approval workflow from first level review to second level approval, including scanning, 2-way to 4-way matching, and validation of GL codes, taxes, and discounts for payment.

Approved values may be lower than invoices due to damaged items, incomplete deliveries, missing items, or retention held until milestones are met and deliverables completed.

Learn how payment terms affect working capital by fixing due dates from the invoice date or submission date, with a 45-day example.

Initiate payment runs in batches to cost-effectively pay vendors, filtering approved invoices due by the run date and excluding holds. Use urgent releases only with approvals to finalize the batch.

Understand how finalized payment batches initiate through manual or electronic routes, with two levels of bank approvals. Compare payment methods, including checks, eft, wires, card, digital payments, and p-cards.

Releasing payment reconciles the transaction, module, and GL levels, knocks off the invoice so it won't reopen, and lowers the accounts payable balance after resolving exceptions.

Raise a PO for 10 laptops at $1,000 each, then receive and inspect goods. Do a three-way match with the PO, GRN, and invoice, then approve and process $10,000 payment.

Manage excess inventory efficiently by updating the GRN to reflect 12 received laptops against PO12345, notify the vendor, and arrange the return or negotiated terms.

Learn to handle short quantities in a goods receipt note by verifying against the PO, updating the GRN, and notifying the vendor to arrange back order or credit.

Learn how to handle an invoice that exceeds the PO by documenting extra charges, verifying justification, notifying the vendor, and adjusting the invoice or PO to resolve the excess.

Analyze a short invoice amount being 9500 against a 10000 PO by verifying billed items, notifying the vendor, and adjusting the invoice or PO as needed.

Identify duplicate invoices and verify with the vendor, then reject the duplicate and update records to ensure only the original $10,000 invoice is processed.

Identify and verify the $1,000 overpayment on invoice INV 56789 (invoice amount $10,000, paid $11,000), then arrange a refund or offset against future payments and update the accounting records.

Identify and verify underpayments in accounts payable, contact the vendor, pay the remaining $1,000 on invoice INV 56789, and update accounting records accordingly.

Identify early payment discount terms (2%), verify eligibility, and pay $9,800 within the discount period for invoice INV 56789 of $10,000. Record and update accounting records to reflect $200 discount.

Identify and verify late payment penalty terms, pay the total amount of 10,200 including the $200 penalty, then record the penalty in the accounting system and update payment records.

Identify and resolve duplicate payments by reconciling with bank statements. Verify the duplicate with the vendor and arrange a refund or offset against future invoices, then update accounting records.

Investigate the return reason for the $10,000 payment caused by an incorrect account number, correct the details, reprocess the payment, and update records.

Trace the $10,000 payment for invoice INV 56789 to verify processing, contact the bank, and communicate findings to the vendor, documenting corrective actions.

Process a credit memo issued for $2000 against a $10,000 invoice, reducing the payable amount to $8,000. Verify the memo, apply it to the invoice, and pay the adjusted amount.

Apply a debit memo of $500 to invoice INV 56789, increasing the payable amount from $10,000 to $10,500, then notify the vendor and process payment of $10,500.

Identify the discount terms, apply the $500 discount to the invoice, adjust the invoice amount from $10,000 to $9,500, process the payment, and update records.

Learn how to handle a late fee by adjusting the invoice from $10,000 to $10,200, verify terms, apply the fee, process payment, and update records.

Identify and resolve a $200 payment discrepancy on invoice INV56789 of $10,000 by investigating, contacting the vendor, and updating accounts payable and bank records.

The phantom supplier case in accounts payable shows a fake ABC Raw Materials, diverting payments to a personal account. Implement supplier verification with site visits, reference checks, and reviewer approvals.

Expose the duplicate invoice scheme and audit flags from altered dates and amounts, highlighting how a three-way match and improved detection could prevent fraud.

Expose the ghost employee fraud through payroll and consultant outputs cross-checks. Show how absence of segregation of duties and audit gaps allowed payments for non-existent services, prompting stronger controls.

Explain how inflated purchase orders led to procurement fraud in accounts payable, highlighting lack of multi-level approvals and the need for price comparisons to flag overpricing.

Learn how a fictitious vendor scheme arose from weak vendor creation and validation, and how strict checks—vendor verification, physical site visits, and reference checks—prevent fraud.

Trace a whistleblower's report of a kickback arrangement revealing inflated contracts and payments, and learn how audits, vendor reviews, RFP evaluation, and a strict conflict of interest policy prevent it.

Identify and prevent fraud by enforcing stringent review and approval of corporate card expenses, cross-checking statements against procurement needs, and enforcing a clear policy on personal charges.

Expose unauthorized price increases through strategic cost analysis and market rate benchmarking, detecting overpricing in accounts payable. Review pricing history and transactions to uncover kickbacks and prevent future losses.

Auditors uncover fake maintenance contracts and payments to non-existent contractors in a real estate firm. Implement a contract management system and conduct regular reviews of contractor deliverables to flag fraud.

Uncover embezzlement through refunds at a tech company, where refunds to non-existent customers were redirected, highlighting how lacking refund review and approvals enabled the fraud.

Review aging of purchase orders, invoices, GRNs, and accruals to identify delays, duplicates, and misalignments, and ensure month-end closures with vendor confirmations and controlled access.

Explore segregation of duties across key finance functions, with maker and checker roles, and learn about ratification of purchase orders, backdated purchase orders, and independent verification of bank updates.

Identify and prevent duplicates through internal controls, such as duplicate checks on vendors, purchase orders, and invoices, and enforce data integrity, central invoicing, and purchase order references.