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Bookkeeper Interview
Questions

30 Questions and Answers by
| Brian Schuchart is a CPA with fourteen years of experience, including nine years in financial strategy roles. He has held the roles of auditor, staff accountant, manager of financial planning and analysis and senior finance partner.

Question 1 of 30

True or False: For vendor invoices, it is always best to pay the bill as soon as possible.

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Bookkeeper Interview Questions

  1. 1.

    True or False: For vendor invoices, it is always best to pay the bill as soon as possible.

      This is a bit of a trick question, and tests your understanding of cash flow. As a general rule of thumb, it is almost always better to receive cash from customers as quickly as possible and pay vendors as slowly as possible (while still adhering to the payment terms). The goal of doing this is to maximize cash on hand which provides flexibility for the company.

      Brian's Answer

      "That statement is false. When it comes to Accounts Payable and the payment of invoices, it is better to use the vendor payment terms to our advantage. If we pay bills as soon as they are received, that ties up cash that could have been used for other purposes. The only time it may be advantageous to pay sooner than the due date is if there is a discount for paying earlier."

  2. 2.

    What is depreciation expense, and how is it recognized?

      Depreciation is the gradual expensing of the cost of a fixed asset over its useful life. Depreciation expense aligns with the accrual method of accounting, as the total cost of the asset is spread over a period of time, rather than expensed in full when purchased. Most companies use straight-line depreciation, which spreads the cost evenly over the asset's useful life.

      Brian's Answer

      "Depreciation expense is the portion of a fixed asset cost that is being used up during the current period. When a fixed asset is purchased, the cost is capitalized on the balance sheet. Each period, depreciation expense is recognized which reduces the asset balance. While there are many ways to depreciate an asset, most companies use the straight-line method of depreciation."

  3. 3.

    How do you manage your manager? In other words, what steps do you take to make sure you get what you need from your boss and make both your lives easier?

      Also known as 'managing up', 'managing your manager' is a soft skill that can be developed over time. It essentially means doing whatever is necessary to make your manager's job easier. Some clear-cut benefits of managing up include increased productivity and better working relationships between boss and employee.

      Brian's Answer

      "I am a firm believer in the benefits of managing my manager. At the end of the day, I want to make the audit engagements we work on together run as smoothly as possible. One area where I really focus on is communicating and prioritizing workload on a regular basis. This ensures that I'm always working on the highest-priority items. Another thing that is crucial is understanding my manager's style. For example, do they like regular check-ins by email throughout the day, scheduled catch-up meetings, etc. Then, I tailor my communication to their style."

  4. 4.

    What are Days Payable Outstanding, and what is indicated when days outstanding grows?

      This is a question that gauges whether you understand metrics and can use them to catch trends in the business. Days Payable Outstanding is a metric that measures the health of accounts payable. A high or growing metric indicates that you are able to pay your vendors on increasingly favorable terms, which is beneficial to cash flow management.

      Brian's Answer

      "Days Payable Outstanding is an important metric that measures the health of accounts payable. The metric indicates how many days of expenses are hung up in accounts payable at any given time. A low number of days indicates that the company is paying their bills quickly. A growing number of days indicates that the company is taking advantage of favorable vendor terms, which helps with cash flow management. As long as bills are not overdue, it is a sound strategy to have longer payment terms with vendors."

  5. 5.

    What are some examples of internal controls that impact the bookkeeper role?

      Internal controls are rules or procedures that are put in place to protect financial and accounting information and to prevent fraud. Some are required by laws and regulations, while others are implemented to protect the company. There are many examples of internal controls that can impact the bookkeeper role, including preventative controls (segregation of duties, chains of approval, physical control of assets (locks on doors), training programs) and detective controls (monthly reconciliations, budget to actual comparisons, inventory counts).

      Brian's Answer

      "There are many examples of internal controls that would impact my role. Preventative controls like segregation of duties and approval requirements will limit the activities I can perform. I will also be involved in detective internal control procedures, such as monthly reconciliations of balance sheet accounts and budget to actual comparisons."

  6. 6.

    Give some examples of non-cash expenses.

      This is a technical question that tests whether you are able to identify non-cash expenses. Non-cash expenses are items that reduce profitability even though there isn't cash being paid in the period. A good example is depreciation expense, where the asset is purchased and then expense is recognized over its useful life.

      Brian's Answer

      "Depreciation expense is the most common non-cash expense, as the cash is spent upfront and then expense is recognized over the life of the asset. Amortization expense is another example, and it is most commonly associated with items such as software, intangible assets and long-term contracts. It's important for a bookkeeper to be familiar with these items, as they are added back to net income on the statement of cash flows."

  7. 7.

    What are the steps involved in the accounting close process?

      This question is used to assess whether your understanding of the accounting close process aligns with the organization's. Don't go into too much detail - rather, just hit the key steps and then ask how it compares or differs from the organization's process.

      Brian's Answer

      "First and foremost, there needs to be a closing calendar so that deadlines are set for all departments. Next, all data must be gathered. This includes departments such as payroll and accounts payable preparing reports needed for journal entries. Next, all journal entries are booked. After journal entries are booked and reviewed, financial statements are prepared and balance sheet reconciliations are completed. Finally, the results are reviewed with leadership. Is there anything I described that differs from the process here at XYZ Corporation?"

  8. 8.

    What is your comfort level with interacting and communicating with senior leadership?

      A bookkeeper role is staff level but is unique in that the role interacts regularly with senior leadership. Highlight that you not only have experience presenting in front of leadership, but also that you are comfortable doing it. Be specific with what you presented. For example, monthly results, pitches for new initiatives, etc.

      Brian's Answer

      "I have ample experience getting in front of leadership and presenting. In my previous role, I would present to the CEO, CFO and other senior leaders during our monthly Finance Review meetings. I always felt the need to prepare in advance for any questions that might arise, and would often circle back promptly on follow-ups that developed during those meetings."

  9. 9.

    Are you a detail oriented person?

      The bookkeeper position requires great attention to detail, as the role is in charge of producing and maintaining meticulous financial records. It is expected that the bookkeeper can catch mistakes before reporting is provided to leaders of the organization.

      Brian's Answer

      "Yes, I am extremely detail oriented. Part of what makes me a great bookkeeper is my organization skills and ability to self-review my work. I know that providing financial information containing errors creates doubt among leadership that the financial records are accurate. Therefore, I implement systems that allow me to check the details, such as monthly checklists and reviews."

  10. 10.

    What accounting software are you familiar with?

      Speak specifically to the accounting systems you have used and some of the functions you performed. Many job descriptions specifically state which accounting software the company uses. If any event, make sure to highlight that you are quick to learn new software systems.

      Brian's Answer

      "In my last role, I used SAP to book journal entries and run queries. As an independent contractor, I also used Quickbooks to complete monthly bookkeeping for various clients. I used that software to book journal entries, complete bank reconciliations, run monthly reports, and invoice customers. Since I have an underlying understanding of accounting, I am easily able to learn new software packages."

  11. 11.

    Are you proficient in Excel?

      Excel proficiency is a must for not only a bookkeeper, but any role in accounting. At a minimum, a bookkeeper should be able to sort through large amounts of data and analyze that data using pivot tables.

      Brian's Answer

      "Yes, I am proficient in Excel. I have used Excel extensively throughout my time in school, as well as in my previous role. For example, I used data sorting and filtering, as well as pivot tables to organize large amounts of data. Additionally, I have experience using V-Lookups and H-Lookups to pull together analysis for our external auditors. I have even dipped my toes into data visualization software such as Tableau, but that is a skill I would like to continue to nurture."

  12. 12.

    Which statements or reports would you prepare as part of your month-end close package?

      A bookkeeper is often responsible for producing month-end reports. An income statement and balance sheet are almost always produced, as well as a statement of cash flows. Additionally, there may be specific reports that a company can use, such as key performance indicators (KPIs), and customer/vendor detail.

      Brian's Answer

      "Month-End Reporting should give leadership the information they need to see how the business is performing. To achieve this visibility, there are some core reports I would include in the reporting package each month. First and foremost, I would include a balance sheet, income statement and statement of cash flows. For supplemental schedules, I would include a summary of key performance indicators, as well as a sales breakdown. Are there any other schedules that leadership at this company would like to see each month?"

  13. 13.

    Are you willing to work extra hours if needed during busier times?

      The life of a bookkeeper is tied to the month-end close calendar, which could result in a schedule that is ‘lumpy’ and not a typical 9-5. The candidate should expect there to be some additional time worked during busier times and should highlight that they are flexible.

      Brian's Answer

      "Yes, I am willing to work extra hours as needed. I understand that the work required ramps up during month-end close, tax filings and other busier times. I am happy to be flexible and work as needed to make sure the job gets done."

  14. 14.

    What are Days Sales Outstanding, and what is indicated when days outstanding grows?

      This is a question that gauges whether you understand metrics and can use them to catch trends in the business. Days Sales Outstanding is a metric that measures the health of Accounts Receivable. A high or growing balance indicates that there is a collections problem.

      Brian's Answer

      "Days Sales Outstanding is an important metric that measures the health of Accounts Receivable. The metric indicates how many days of sales are hung up in accounts receivable at any given time. A growing balance indicates that there may be some issues with collections, which could lead to cash flow problems in the near future. Given this, collections should be monitored closely and adjusted accordingly, if DSO is growing."

  15. 15.

    Imagine that you are producing a month-end report and notice the ledger is off. What would you do to rectify this situation?

      This question is being asked to assess your self-review skills, as well as your problem solving skills. First discuss how you would discover the error during your review. Then, cover the steps you would take to resolve.

      Brian's Answer

      "I pride myself on self-reviewing my work. During month-end, I follow a checklist that helps catch errors. If I discovered an error during my review, I would first check formulas to make sure the report itself is footing correctly. If there is nothing wrong with the report itself, I would then drill down to the account level by searching for the amount of the error. If the error was not in the account ledger, I would then drill down to the source document level. I enjoy problem solving and would find the issue efficiently."

  16. 16.

    Do you have any experience with invoicing vendors?

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  17. 17.

    What are some methods you use to self-review your work?

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  18. 18.

    How do you mitigate and manage stress?

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  19. 19.

    What are Days Inventory on Hand, and what is indicated when days on hand grows?

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  20. 20.

    What have you done at your previous job to reduce costs or save time?

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  21. 21.

    What do you do when you don’t know the answer to something?

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  22. 22.

    What are the different inventory valuation methods?

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  23. 23.

    Why did you want to become a bookkeeper?

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  24. 24.

    Do you have experience working with external auditors?

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  25. 25.

    Do you have experience explaining complex accounting concepts to non-financial personnel?

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  26. 26.

    How would you handle working in an increasingly remote work environment?

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  27. 27.

    What are the three main financial statements and what do they indicate about an organization’s financial position?

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  28. 28.

    What are the differences between accrual accounting and cash accounting?

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  29. 29.

    What are the steps involved in the bank reconciliation process?

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  30. 30.

    What have you done recently to become a better bookkeeper?

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