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Accounts Receivable Specialist Mock Interview

Question 19 of 30 for our Accounts Receivable Specialist Mock Interview

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Question 19 of 30

If a customer is also a vendor and not paying their invoice, do you think it is good practice to pay them with the open A/R dollar amount?

"I have found that in small to mid-sized businesses, where the customer is also a vendor, the businesses will swap A/R and A/P amounts to settle accounts. I worked for a small metal shop with annual sales revenue of $6M, and the company hit a very slow sales window for four months. This dip in business put the company behind on paying off the vendors. The A/P was almost 90% over 45+ days, and the vendors were threatening to cut us off on a daily basis. The Accounting Manager was forced to swap the open A/R balances to pay down the open vendor invoices. This swap was done on several accounts, and was used as a last option to keep day to day business and operations running."

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How to Answer: If a customer is also a vendor and not paying their invoice, do you think it is good practice to pay them with the open A/R dollar amount?

Advice and answer examples written specifically for an Accounts Receivable Specialist job interview.

  • 19. If a customer is also a vendor and not paying their invoice, do you think it is good practice to pay them with the open A/R dollar amount?

      How to Answer

      The interviewer is looking to see how you troubleshoot, and where you stand when it comes to handling cross-over accounts that are in arrears. It's not a common practice to do this, and one that most Controllers dislike. Most schools will agree when you are taking your A/R training, that this is not the best practice; however, a business must do what they have to, to receive payment. Discuss your thoughts on this practice.

      Written by Bobbi Witt on January 7th, 2019

      Entry Level

      "My current experience is with a large multinational company, and it will not allow a business swap their A/R or A/P to pay down one. But, as I learned in school, business owners and Senior Managers must do what they have to to keep the business operating. I am sure that I will see more of this practice as I gain further accounting experience."

      Written by Bobbi Witt on January 7th, 2019

      Answer Example

      "I have found that in small to mid-sized businesses, where the customer is also a vendor, the businesses will swap A/R and A/P amounts to settle accounts. I worked for a small metal shop with annual sales revenue of $6M, and the company hit a very slow sales window for four months. This dip in business put the company behind on paying off the vendors. The A/P was almost 90% over 45+ days, and the vendors were threatening to cut us off on a daily basis. The Accounting Manager was forced to swap the open A/R balances to pay down the open vendor invoices. This swap was done on several accounts, and was used as a last option to keep day to day business and operations running."

      Written by Bobbi Witt on January 7th, 2019

      Experience

      "I worked for a small metal shop with annual sales revenue of $6mm, and the company hit a very slow sales window for a four month period and this put the company behind on paying of the vendors. The A/P was almost 90% over 45+ days and the vendors were threatening to cut us off on a daily basis. The Accounting Manager was forced to swap the open A/R balances to pay down the open vendor invoices. This was done on several accounts, and was used as a last option to keep day to day business and operations running."

      Written by Bobbi Witt

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