Accounts Payable (AP) Interview Q&A

1. Walkthrough AP process flow?

1) Purchase Requisi on (PR) Crea on

2) Purchase Order (PO) Issuance
3) Goods Receipt Note (GRN) or Receiving Report
4) Vendor Master
5) Invoice Processing
6) Payment Processing
7) Vendor Reconcilia on
8) AP Help Desk

2. What is the So ware used in AP process?

1) SAP
2) Net Suite
3) Oracle
4) Quick Books
5) Zoho Books

3. What are the AP Journal Entries?

1. Recording a Purchase on Credit

When goods or services are received, and an invoice is recorded:

Debit: Inventory

Credit: Accounts Payable

2. Recognizing an Expense on Credit

When services are received, and an invoice is recorded:

Debit: Expense Account (e.g., U li es Expense, Rent Expense)

Credit: Accounts Payable

3. Payment of Accounts Payable

When a payment is made to a vendor or supplier to se le an outstanding invoice:

Debit: Accounts Payable

Credit: Cash (or Bank)

4. Purchase Returns or Allowances

When goods are returned to the supplier or an allowance is given:

Debit: Accounts Payable

Credit: Inventory (or appropriate expense account)

5. Accrued Liabili es

When an expense is incurred but not yet billed by the supplier (accrued expense):

Debit: Expense Account (e.g., Interest Expense, Salaries Expense)

Credit: Accounts Payable (or Accrued Liabili es)

6. Adjus ng Entries for Discounts

When a discount is received for early payment of an invoice:

Debit: Accounts Payable

Credit: Cash (for the amount paid)

Credit: Purchase Discounts (or appropriate discount account)

7. Recording Prepaid Expenses

When an expense is paid in advance:

Debit: Prepaid Expense

Credit: Cash (or Bank)

8. Amor zing Prepaid Expenses

When a por on of a prepaid expense is recognized over me:

Debit: Expense Account (e.g., Insurance Expense)

Credit: Prepaid Expense

4. What is the Credit Note Journal Entry?

Debit: Accounts Payable

Credit: Inventory

5. What is the Bank rejec on Journal Entry, once payment proposal is made?

Ini al Payment Entry:

Debit: Accounts Payable

Credit: Bank

Reversal of Payment Entry:

Debit: Bank

Credit: Accounts Payable

Bank Rejec on Fee:

Debit: Bank Charges (Expense)

Credit: Bank

6. What is the Refund Journal Entry from Vendor?

Ini al Payment Entry:

Debit: Accounts Payable

Credit: Bank

Refund Entry:

Debit: Bank

Credit: Accounts Payable

7. What are the important documents in AP process?

1) Bank Details
2) Vendor Statement
3) Invoice
4) Credit Note
5) PO
6) GRN
7) Expense Report
8) Purchase Requisi on
9) Invoice Register
10) Payment Voucher
11) Voucher Register
12) Check

8. What is Vendor & Supplier?

Vendor

While the terms are some mes used interchangeably, a vendor typically refers to an en ty that sells
finished products directly to consumers or business.

Supplier

Whereas a supplier o en provides raw materials or intermediate goods to manufacturers or other

businesses in the supply chain.

In essence, all vendors can be suppliers, but not all suppliers are vendors.
9. What is Invoice & Credit Note?

Invoice

Invoice is a document issued by a seller to a buyer that specifies the details of a sale transac on. It
includes informa on about the goods or services provided, the quan es, prices, payment terms, and
other relevant details. Invoices are used to request payment from the buyer.

Credit Note

Credit Note (or Credit Memo) is a document issued by a seller to a buyer that acknowledges the return
of goods, cancella on of services, or a correc on of an invoice error. It serves to reduce the amount
that the buyer owes to the seller, and can be used to offset future purchases or refunded to the buyer.

10. What do you mean by 3-way match?

The 3-way match is a crucial internal control process used in accounts payable to ensure that a
company only pays for goods and services that were actually ordered and received. It involves
comparing three key documents before approving a supplier invoice for payment:

1) Purchase Order (PO)

2) Goods Receipt Note (GRN) or Receiving Report
3) Supplier Invoice

11. How is 3-Way Match Verified?

PO vs. Invoice: Check that the items, quan es, and prices on the invoice match those on the PO.

PO vs. GRN: Ensure that the items and quan es received (GRN) match what was ordered (PO).

GRN vs. Invoice: Confirm that the items and quan es invoiced match those recorded as received
(GRN).

12. What is the 4-way match?

1) Purchase Order (PO)

2) Goods Receipt Note (GRN) or Receiving Report
3) Invoice
4) Purchase Order Receipt (POR)

13. Explain the Process of 4-Way Match?

PO Crea on: A purchase order is created by the buyer and sent to the supplier.

Goods Receipt: Upon receipt of the goods or services, the receiving department creates a receiving
report or GRN.

Invoice Receipt: The supplier sends an invoice to the buyer for payment.

Matching Process: Accounts payable staff compare the PO, GRN, and invoice to ensure that all details,
including quan ty, price, and descrip on, match across all documents.
Verifica on and Approval: Once the match is confirmed, the purchase order receipt (POR) is
generated, indica ng that the transac on has been validated and approved for payment.

Payment Processing: Payment is processed based on the validated purchase order receipt, comple ng
the transac on.

14. What is PO & Non-PO?

Purchase Order (PO)

Purchase Order (PO) is a commercial document issued by a buyer to a seller, indica ng types,
quan es, and agreed prices for products or services. It's essen ally a contract between the buyer and
seller that outlines the details of a purchase transac on.

Non-PO

Non-PO refers to transac ons for which a formal purchase order is not generated. Instead of following
the tradi onal PO-based procurement process, these transac ons may be ini ated through alterna ve
methods such as procurement cards, blanket agreements, or recurring contracts.

15. What is GRN?

Goods Receipt Note (GRN), also known as a Goods Received Note or Delivery Note, is a document used
in the process of receiving goods from suppliers. It serves as a record of the goods delivered by the
supplier and received by the buyer.

16. Describe the Travel & Expense (T&E) process briefly?

Travel & Expense (T&E) is the part of Accounts Payable process.

It is the process of se ling or reimbursing business travel expenses and other related expenses
incurred by employees.

1. Employee seeks preapproval

2. Employee incurs expense
3. Employee submits claims
4. Claim is processed
5. Employee is paid

17. What is Expense report?

The Expense report submi ed by the employee indica ng the date, amount and the nature of
expenses made. The receipts for the expenses incurred are usually a ached to the expense report.

18. What is the T&E verifica on process?

The verifica on T&E team verifies the claim as per the reimbursement policies of the company and
clears it for payment.
 1) Date
2) Report Name
3) Employee Name
4) Amount
5) Currency
6) Report Status
7) Processor name

19. What is another name of Accounts Payable?

AP, P2P, Suppliers, Vendors, Creditors, Trade Payables, etc.

20. Is there any difference between P2P & AP?

P2P is a cycle and AP is a part of it.

21. In Which Statements does AP shown?

Current Liabili es – Liabili es side of the Balance Sheet.

22. How many Invoices do you process per day?

We process with 100 Invoices per day (depends upon the process).

23. What is your Accuracy in percentage?

Accuracy is 98%.

Internal Error is 2 % & External Error is 1% (depends upon the process).

24. What is Purchase Requisi on?

It is a document generated by a produc on department &send to the purchase department regarding

the quan ty & with in a me frame.

25. What is Pro forma invoice?

A Pro forma Invoice is like a quota on issued by seller to buyer before delivering of goods or services.

26. Why do we not process Pro forma invoice?

It is a quota on but some mes it is used for releasing the advance payment.

We can’t process the Pro forma invoice at any cost.

27. What is Tolerance limit?

Tolerance limit is a predefined threshold or range that determines the acceptable variances between
related financial documents, such as purchase orders (POs), goods receipts (GRs), and invoices. These
limits are set to control the extent of permissible discrepancies, helping to streamline the approval
process and reduce the need for manual interven on in minor variances.

28. What is Cost Centre?

Cost Centre is a specific segment, department, func on, or area within an organiza on for which costs
are tracked, monitored, and managed. It is a fundamental element of the management accoun ng and
cost accoun ng systems, allowing businesses to analyse and allocate expenses to different parts of the
organiza on.

29. How do you check the duplicate invoice?

Checking for duplicate invoices is a crucial task in Accounts Payable (AP) to prevent overpayment and
maintain accurate financial records.

Manual Methods:

Visual Inspec on: Review incoming invoices manually to iden fy any duplicates based on invoice
numbers, dates, vendor names, or other iden fying informa on.

Cross-Referencing: Compare the details of each new invoice with exis ng records in your AP system
to iden fy poten al duplicates.

Vendor Statements: Regularly reconcile vendor statements with your AP records to iden fy any
discrepancies or duplicate invoices.

30. Describe the difference between a company’s billable and non-billable expenses.

Billable expenses are charges for services or products provided to customers, while non-billable
expenses are costs incurred by a company that cannot be directly passed on to customers.

31. How do you handle the processing of expense reports and employee reimbursements?

Expense reports and employee reimbursements are processed by verifying expenses, ensuring
compliance with company policies, obtaining proper approvals, and reimbursing employees accurately
and promptly.
32. What is Vendor Master?

Vendor Master is to Create/Modify the Vendor details like

1) Vendor Code
2) Currency
3) Vendor Address
4) Payment Terms
5) Payment Method
6) Tax ID
7) Bank Details

33. What is Vendor Credit Ra ng?

A Vendor Credit Ra ng, also known as Vendor Ra ng or Supplier Ra ng, is an assessment of the
creditworthiness, reliability, and overall performance of a vendor or supplier. It helps organiza ons
evaluate their vendors' financial stability, business prac ces, and ability to fulfil contractual obliga ons.
The ra ng is typically based on various criteria, including financial health, delivery performance, quality
of goods or services, customer service, and compliance with contractual terms

34. What is Vendor Blacklis ng?

Vendor blacklis ng, also known as supplier blacklis ng, is a prac ce where an organiza on maintains
a list of vendors or suppliers who have been deemed unreliable, unethical, or non-compliant with
contractual terms or legal requirements. These vendors are typically excluded from future business
dealings with the organiza on, and their names may be shared with other companies or industry
associa ons to prevent them from engaging in similar prac ces elsewhere.

When a Vendor is not complying with the specifica ons, Quality or meline and if the Vendor engages
in Bid rigging or Unethical conduct or there is frequent billing errors in spite of mul ple reminders and
warnings, we may resort to blacklis ng the vendor.

We blacklist the vendor to avoid opera onal issues, rework, loss of reputa on.

In such instances the Vendor would be delisted, removed or suspended. No further business would be
given to this vendor.

35. Who is the One Time Vendors?

"One- me vendors" refers to vendors or suppliers with whom an organiza on engages in a business
transac on on a non-recurring or infrequent basis. These vendors are typically used for specific, one-
off purchases or services and are not considered regular or ongoing suppliers for the organiza on.

1) Consultants or Freelancers
2) Refund Invoices
3) Payroll Invoices
4) Claim Invoices
5) Event Suppliers
36. What is Vendor Reconcilia on?

Vendor Reconcilia on is a process of comparing and reconciling the accounts payable records of a
company with the corresponding records maintained by its vendors or suppliers. This process is
essen al for ensuring accuracy in financial transac ons, verifying the completeness of vendor invoices,
and resolving any discrepancies or differences between the two sets of records (Sub Ledger Reports
and Vendor Statement).

Important Documents for Vendor Reconcilia on

1) Statement of Accounts – Cri cal & High Amount (Top 10) Suppliers.
2) Invoices – Processed, WIP, Yet to Scan.
3) Sub Ledger Reports – Open Items, Paid Items, WIP.

Steps for Vendor Reconcilia on

1) Gather Your Invoices.

2) Get the Statement of Accounts from Suppliers.
3) Organize your invoices for the vendor by date.
4) Inspect the Line Items.
5) Match the line items on your vendor statement to your invoices.
6) Place Check Marks on Matched Items.
7) Place check marks on your statement when the invoice matches the line item.
8) Highlight any Inconsistencies.
9) Compare the Totals.
10) Check the Incorrect Invoice Number, Amount, Currency, Bank details.
11) Check the Amounts for Short paid, over paid, Double paid, Par al paid, open Items.
12) Reconcile with Reports & Statement.
13) Update in Trackers.

Iden fy Discrepancies:

1) Missing invoices or payments.

2) Incorrect invoice amounts or payment dates.
3) Duplicate invoices or payments.
4) Unapplied credits or overpayments.

37. What is the need of GRIR?

The GR/IR (Goods Receipt/Invoice Receipt) clearing account is a crucial component of the procurement
and financial accoun ng process within SAP and other ERP systems. It serves several essen al
func ons that help maintain accurate financial records and ensure efficient and controlled
procurement processes.

The GR/IR account is essen al for:

Matching Goods and Invoices: Ensures that received goods are matched with supplier invoices.

Accurate Financial Statements: Maintains the accuracy of financial records.

Handling Timing Differences: Manages ming differences between goods receipt and invoice receipt.
Control and Reconcilia on: Facilitates the reconcilia on of goods receipts and invoices.

Suppor ng Accrual Accoun ng: Ensures expenses are recognized when incurred.

Process Efficiency and Automa on: Enhances efficiency through automated processes.

38. What is GR-IR Reconcilia on?

GR/IR (Goods Receipt/Invoice Receipt) reconcilia on is a key process in the accounts payable and
inventory management func ons within an SAP environment. This process ensures that the goods
received from suppliers are accurately matched with the invoices received and that any discrepancies
are promptly iden fied and resolved. The reconcilia on process is essen al for maintaining accurate
financial records, controlling costs, and ensuring mely payments.

1. Understanding GR/IR Account

GR/IR Clearing Account: The GR/IR clearing account is a temporary liability account used to record the
value of goods received and the corresponding invoices. It acts as an intermediary holding account
un l the goods receipt and invoice receipt are matched and cleared.

2. The GR/IR Process

Goods Receipt (GR): When goods are received from a supplier, a goods receipt is recorded in the
system. This entry debits the inventory account and credits the GR/IR clearing account.

Invoice Receipt (IR): When the invoice for the received goods is received from the supplier, an invoice
receipt is recorded. This entry debits the GR/IR clearing account and credits the accounts payable
account.

Reconcilia on Steps:

Data Collec on: Gather all relevant documents, including purchase orders, goods receipts, and
invoices, for the period under review.

Match Transac ons: Compare the quan es and values on the goods receipts with the corresponding
invoices. The goal is to ensure that the quan es and amounts match.

Iden fy Discrepancies: Iden fy any discrepancies between the goods receipts and the invoices.
Common discrepancies include quan ty differences, price differences, and missing invoices.

Resolve Discrepancies: Inves gate the cause of discrepancies and take correc ve ac ons. This may
involve:

Communica ng with suppliers to resolve invoice discrepancies.

Adjus ng goods receipt records if errors are found.

Processing debit or credit notes as necessary.

Clearing Entries: Once discrepancies are resolved, clear the matched transac ons from the GR/IR
clearing account. This involves pos ng adjus ng entries to zero out the balances.
39. What is Payment Processing?

Payment processing refers to the steps involved in transferring funds from a payer to a payee in
exchange for goods or services rendered. It encompasses the en re transac onal process, from the
ini a on of a payment request to the comple on of the payment.

40. Explain the Payment Process Flow?

1) Perform Duplicate Audit Check on Invoice

2) Create Proposal & Send to Business for approval
3) Business – Review & Approve Proposal
4) Complete Payment with 2-3 days forward as transfer date
5) Treasury to maintain adequate funding in bank account
6) Review Rejec ons & Reset Payments
7) Reconcile Bank Vs Payment GL

Payment Methods

1) ACH
2) Wire Transfers
3) EFT
4) Corporate Card
5) Ne ng
6) Direct Debit
7) Host to Host
8) IBA
9) Check
10) Cash

41. What is P Card?

A P Card, or Purchasing Card, is a payment card issued by an organiza on to authorized employees for
making purchases of goods and services on behalf of the organiza on. P Cards are similar to credit
cards but are specifically designed for business-related expenses, providing a convenient and efficient
way to streamline the procurement process and manage corporate spending.

42. What are the types of Purchase Order?

1) Standard Purchase Order

2) Blanket Purchase Order
3) Planned Purchase Order
4) Contract Purchase Order
5) Service Purchase Order
6) Scheduling Agreement Purchase Order
7) Framework Purchase Order
8) Internal Purchase Order
43. What is Standard Purchase Order?

Standard Purchase Order is typically used for irregular, infrequent or one-off procurement. It contains
a complete specifica on of the purchase, se ng out the price, quan ty and meframes for payment
and delivery.

Standard Purchase Order has Header, Line, Shipment and Distribu on. It involves with Item, Quan ty,
Price, Payment Terms and Delivery Schedules.

44. What is Planned Purchase Order?

Planned Purchase Order requires full details of the goods and services to be purchased and their costs.
Dates for payment and delivery are also included in a planned purchase order, but these are treated
as tenta ve dates. Issuing a release against the planned purchase order places individual orders.

Planned Purchase Order has Header and Line. It involves with Item, Quan ty, Price and Payment Terms.

45. What is Blanket Purchase Order?

Blanket Purchase Order involves a purchaser agreeing to purchase goods or services from a specific
vendor, but not at any specific quan ty. Pricing may or may not be confirmed in a blanket purchase
order. This type of order is typically used for repe ve procurement of a specific set of items from a
supplier such as basic materials and supplies.

Blanket Purchase Order has Header and Line. It involves with Item, Price and Payment Terms.

46. What is Contract Purchase Order?

Contract Purchase Order sets out the vendor’s details and poten ally also payment and delivery terms.
The products to be purchased are not specified. A contract purchase order is used to create an
agreement and terms of supply between a purchaser and vendor as the basis for an ongoing
commercial rela onship. To order a product, the purchaser may refer to the contract purchase order
when raising a standard purchase order.

Contract Purchase Order has Header only. There is no Item, Quan ty, Price, Payment Terms and
Delivery Schedules.

47. What is Service Purchase Order?

Service Purchase Order used for procuring services rather than goods. It includes details such as service
descrip ons, rates, dura ons, and terms.

48. What is Scheduling Agreement Purchase Order?

Scheduling Agreement Purchase Order used in industries with recurring needs, this PO type outlines
quan es, delivery dates, and pricing for goods or services over a specified period, offering flexibility
in scheduling deliveries.
49. What is Framework Purchase Order?

Framework Purchase Order establishes the general terms and condi ons under which specific
purchases will be made throughout the period of the framework agreement. It doesn't specify
quan es or delivery dates.

50. What is Internal Purchase Order?

Internal Purchase Order Used for purchases made within an organiza on, typically for inter-
departmental transac ons or requisi oning goods or services from another department.

51. What are the Invoice Types?

1) Standard Invoice
2) Debit Memo Invoice
3) Timesheet Invoice
4) Recurring Invoice
5) Commercial Invoice

52. What is Standard Invoice?

Standard Invoice is the most common form of invoice that small businesses create, and the format is
flexible enough to fit most industries and billing cycles.

53. What is Debit Invoice?

Debit Invoice also called a Debit Memo, is issued by a business that needs to increase the amount a
client owes to the business. Debit invoices can be useful to small business and freelancers when they
need to make a slight adjustment to an exis ng bill.

54. What is Timesheet Invoice?

Timesheet is an invoice used when a business or employee is billing based on the hours they work and
their standard rate of pay. Timesheets are used by contract employees who are paid hourly by their
employer.

55. What is Recurring Invoice?

Recurring Invoice is useful for businesses that charge clients the same amount periodically for their
services. Recurring Invoice is common among IT business, who charge their clients the same amount
each month for a package IT service.
56. What is Commercial Invoice?

Commercial invoices include details of the sale that are needed to determine customs du es for cross-
border sales.

57. How to find Duplicate Invoices?

Finding duplicate invoices is important for maintaining accurate financial records and preven ng
overpayment to suppliers.

1) Invoice Approval Workflow

2) Duplicate Invoice Reports
3) Automated Invoice Matching Systems:
4) Data Analy cs Tools

58. How do you prepare a roadmap for duplicate Invoice pos ng?

Preparing a roadmap for addressing duplicate invoice pos ng involves outlining a systema c approach
to iden fy, prevent, and resolve instances of duplicate invoices within an organiza on's accounts
payable processes.

1) Assess Current Processes

2) Establish Duplicate Invoice Policy
3) Implement Internal Controls
4) Collabora on with Other Departments

59. You have approved an Invoice and it was duplicate how do you handle?

What is the solu on do you give for Management?

Handling the situa on:

If I have approved a duplicate invoice, it's crucial to take immediate ac on to rec fy the error and
prevent any nega ve impact on the organiza on's financial records.

Contact the vendor directly to inform them of the duplicate invoice and request cancella on or
withdrawal of the duplicate invoice from their records.

Reverse the approval status of the duplicate invoice to prevent it from being processed for payment.

Instruct the accounts payable team to put a hold on payment processing for the duplicate invoice to
prevent any erroneous payments.

Solu on to Management:

Inform management about the situa on, providing details of the duplicate invoice and the steps being
taken to resolve it.

I would propose a comprehensive solu on to address the issue of approving a duplicate invoice like
Correc ve Ac on, Preven ve Ac on, Root Cause Analysis, Process Improvement, Enhance Valida on
Checks, Data Analysis, Accountability, Con nuous Monitoring, Regular Audits, Performance Metrics
and Automate Process.
60. What are Short Payments?

Par al Payments: Financial constraints might lead to par al payments being made with the inten on
to se le the remaining balance later.

Cash Discounts: Taking advantage of early payment discounts which might reduce the payable
amount.

Administra ve Errors: Mistakes in the payment process such as incorrect data entry or oversight.

Quality Issues: Goods received may be damaged or not meet the required specifica ons, leading to
deduc ons from the payment.

Discrepancies in Invoice Amounts: Differences between the billed amount and the received amount
due to errors in quan ty, pricing, or addi onal charges not agreed upon.

Disputes: Disagreements over the terms of the contract, delivery, or service provided.

61. What are Double Payments?

Double payments, also known as duplicate payments, occur when a payer inadvertently makes more
than one payment for the same invoice, bill, or transac on. These duplicate payments can result from
various factors, including human error, system glitches, or procedural breakdowns.

1) Vendor Billing Errors

2) System Glitch
3) Duplicate Invoice

62. How to rec fy Short Payments & Double Payments?

Nego ate a resolu on with the vendor, depending on the nature of the shor all.

Pay the remaining balance: If the short payment was uninten onal or due to an error, authorize
payment for the outstanding amount.

Resolve billing discrepancies: If there are discrepancies between the invoice and the goods or services
received, nego ate a resolu on with the vendor to adjust the payment accordingly.

63. How do you handle delayed Payments?

Handling delayed payments requires a proac ve and strategic approach to ensure that outstanding
payments are resolved promptly while maintaining posi ve rela onships with vendors or suppliers.

Work with the vendor to nego ate a resolu on that sa sfies both par es. Op ons may include.

Agreeing on a revised payment schedule that accommodates the vendor's needs and financial
situa on.

Offering early payment incen ves, such as discounts or accelerated payment terms, to mi gate the
impact of the delay.
Exploring alterna ve payment methods or arrangements, such as par al payments or instalment
plans, to address immediate cash flow constraints.

Priori ze payments based on urgency and importance. Focus on resolving delayed payments for cri cal
suppliers or vendors whose goods or services are essen al to your opera ons.

64. What are the Payment Terms?

Payment terms refer to the condi ons and melines established between a buyer and a seller
regarding when and how payment for goods or services will be made. These terms outline the specific
terms of payment, including the due date, method of payment, and any applicable discounts or
penal es. Payment terms are typically nego ated as part of a contractual agreement or purchase
order.

Net Payment Terms:

Net 30: Payment is due 30 days from the invoice date.

Net 60: Payment is due 60 days from the invoice date.

Net 90: Payment is due 90 days from the invoice date.

65. What is Invoice discrepancy?

An invoice discrepancy refers to any inconsistency, error, or discrepancy found between the details on
an invoice and the corresponding purchase order, contract, or agreement. These discrepancies can
occur at various stages of the invoicing process and may involve discrepancies in pricing, quan ty,
terms, or other important details.

66. What is AP Ageing Analysis?

Accounts payable (AP) ageing analysis, also known as AP ageing report or AP aging schedule, is a
financial report that provides a summary of outstanding accounts payable balances categorized by the
length of me they have been outstanding. This analysis helps businesses track and manage their
outstanding payables, assess vendor payment pa erns, and maintain healthy cash flow.

Categoriza on by Age:

Current: Invoices due for payment within the current billing cycle.

1-30 days: Invoices outstanding for 1 to 30 days.

31-60 days: Invoices outstanding for 31 to 60 days.

61-90 days: Invoices outstanding for 61 to 90 days.

Over 90 days: Invoices outstanding for more than 90 days.

67. What are the reasons to unable to process PO invoices?

1) Goods receipt Note not completed in PO

2) Purchase Order Not Approved / Released
3) Price Variance
4) Quan ty Variance
5) Incorrect Vendor & Vendor not approved
6) Incorrect Currency
7) Bank Details Mismatch
8) Final Invoice not cket for milestone invoices
9) GR Based not checked in purchase order
10) Vendor blocked for invoice pos ng

68. What are the reasons to unable to process Non-PO invoices?

1) Incorrect Vendor & Vendor not approved

2) Incorrect Currency
3) Bank Details Mismatch
4) Vendor blocked for invoice pos ng
5) GL are closed or block for AP pos ng
6) GL not opens for manual pos ng
7) GL is not relevant for Tax
8) GL is incorrect combina on
9) Approver not authorized for approving value of invoice

69. How to find the missed documents in SAP T Code?

Transac on code ST03N: This transac on code allows you to search for documents with a achments.
You can filter by document type, company code, and date range.

Transac on code SBWP: This transac on code displays a list of all a achments in the SAP System. You
can filter by document type, company code, and date range.

Report RSBPATT_REPORT: This report provides a list of all a achments in the SAP System. You can
filter by document type, company code, and date range.

Transac on code FBL5N: This transac on code displays a list of all accoun ng documents, including
those with a achments. You can filter by document type, company code, and date range.

To answer your specific ques on, you can use transac on code ST03N or SBWP to search for posted
documents (e.g., invoices) with a achments. You can filter by document type (e.g., invoice) and date
range to get the list of documents with a achments. Then, you can compare this list with the list of all
posted invoices to iden fy which ones are missing a achments.

Remember to consult your SAP system administrator or a qualified SAP professional for assistance with
these transac ons and reports, as they may require specific authoriza ons and configura on.
70. What are Subsequent Debit and Subsequent Credit in SAP AP?

In SAP Accounts Payable (AP), subsequent debit and subsequent credit transac ons are used to adjust
the financial entries related to previously posted invoices or goods receipts. These transac ons allow
for correc ons or adjustments to the ini al pos ngs without altering the original documents.

Subsequent Debit

A subsequent debit is used when there is a need to increase the amount originally invoiced or posted.
This could be due to various reasons, such as addi onal charges, correc ons of underbilled amounts,
or new costs discovered a er the ini al invoice was processed.

Subsequent Credit

A subsequent credit is used when there is a need to decrease the amount originally invoiced or posted.
This could happen due to reasons like overbilling, returning goods, or discovering lower costs a er the
ini al invoice was processed.

71. What are the accounts payable Aging Report?

The accounts payable aging report is a document that shows a summary of a company's outstanding
payables or unpaid bills. It provides a detailed breakdown of the unpaid invoices by due date and how
long they have been outstanding.

This report helps businesses manage their cash flow by iden fying overdue invoices and priori zing
payments to vendors. It is an important tool for accounts payable departments to monitor and manage
a company's payables effec vely.

72. Why it is important to pay vendors on me and how do you ensure that payments are made on
me?

Important to pay vendors on me

1) Maintains good rela onships with vendors

2) Helps avoid late payment penal es, interest charges, or legal ac on
3) Enhances the company reputa on
4) Enhances the creditworthiness

Payments are made on me

1) Priori ze invoices based on their due dates and payment terms

2) Regularly communicate with vendor
3) Monitor cash flow and forecast future payments
4) Use automa on tools or accoun ng so ware to schedule payments and set reminders

73. What are Bank Details?

Bank Details are crucial for ensuring accurate and efficient payment processing. Bank details typically
include informa on about the supplier's bank account where payments should be directed.
 1) Bank Name
2) Account Number
3) Bank Code
4) Payment Method
5) Currency
6) Tax

74. What are the challenges faced in AP Process?

1) Vendor Codes
2) Purchase Orders
3) Duplicate Invoices
4) Delayed Invoices
5) Delayed Vendor Statements
6) Incorrect Payments

75. What is POT?

"POT" typically stands for "Par culars of Transac on". This term is used to refer to the detailed
descrip on or specifics of each transac on recorded within the AP system. This informa on is crucial
for the accurate processing, tracking, and audi ng of financial transac ons.

76. What are the Key Elements of POT?

Invoice Number: A unique iden fier for the vendor’s invoice.

Invoice Date: The date when the invoice was issued by the vendor.

Vendor Informa on: Details about the vendor, such as name, address, and contact informa on.

Descrip on of Goods/Services: Detailed descrip on of the goods or services provided.

Quan ty and Unit Price: Informa on about the quan ty of goods and the unit price.

Total Amount: The total amount payable as per the invoice.

Payment Terms: Agreed terms for payment, including due date and any early payment discounts.

Tax Details: Informa on about any taxes applicable to the transac on.

Purchase Order (PO) Number: Reference to the purchase order if the transac on is linked to a PO.

Receiving Details: Informa on about the receipt of goods or services.

Payment Method: Details on how the payment will be made (e.g., bank transfer, check).

GL Account: The General Ledger account to which the transac on is posted.

Comments/Notes: Any addi onal informa on or comments regarding the transac on.
77. What are the ac ons to be taken before payment is made?

Before making a payment to a vendor, it is crucial to undertake several ac ons to ensure the accuracy,
legi macy, and compliance of the transac on.

These steps help prevent errors, fraud, and poten al financial discrepancies.

1. Invoice Verifica on

2. Three-Way Match

3. Approval Process

4. Check for Duplicate Invoices

5. Review Payment Terms

6. Check Vendor Informa on

7. Ensure Sufficient Funds

8. Reconcile Accounts

9. Fraud Preven on Measures

10. Record Reten on

78. What are the AP documenta on is maintained?

Invoice Copies: Keep copies of all invoices, purchase orders, and goods receipts.

Approval Records: Maintain records of all approvals and authoriza ons.

Payment Records: Document the payment details including date, amount, and method of payment.

79. Why the Payment is not on me. Why, it is Favourable and unfavourable?

Companies Might Delay Payments

Cash Flow Management: Companies o en delay payments to manage cash flow, ensuring they have
enough liquidity for essen al opera ons and unexpected expenses.

Short-Term Financial Strategy: In some cases, delaying payments is part of a short-term financial
strategy to improve the company’s liquidity posi on or to invest in opportuni es that may offer higher
returns than the cost of late fees.

Balancing the Favorable and Unfavorable Aspects

Strategic Delays vs. Habitual Delays: Occasional strategic delays may be manageable, but habitual
delays can be detrimental. The key is to balance the need for cash flow management with maintaining
good vendor rela onships and avoiding penal es.

Communica on: Open communica on with vendors about payment terms and any poten al delays
can mi gate some of the nega ve impacts. Vendors may be more understanding if they are informed
in advance and the delays are occasional.
Nego a on: Proac vely nego a ng longer payment terms with vendors can provide the cash flow
benefits without incurring penal es or damaging rela onships.

80. What are the Internal Controls in AP?

Internal controls in Accounts Payable (AP) are essen al for ensuring the accuracy, efficiency, and
integrity of financial transac ons. These controls help prevent errors, fraud, and financial
misstatements while ensuring compliance with regulatory requirements. Here's a comprehensive
overview of internal controls in AP:

1. Segrega on of Du es

Purpose:

To ensure no single individual has control over all aspects of a financial transac on, reducing the risk
of errors and fraud.

Implementa on:

Invoice Processing: One person receives and records the invoice, another person reviews and approves
it, and a third person processes the payment.

Authoriza on: Different individuals are responsible for authorizing payments and reconciling bank
statements.

2. Invoice Verifica on and Approval

Purpose:

To ensure that all invoices are accurate, legi mate, and authorized before payment is made.

Implementa on:

Three-Way Match: Match the invoice with the purchase order and goods receipt.

Approval Workflow: Implement a structured approval process where invoices must be reviewed and
approved by authorized personnel before payment.

Vendor Verifica on: Confirm that the invoice is from an approved and legi mate vendor.

3. Access Controls

Purpose:

To restrict access to the AP system and sensi ve financial informa on to authorized personnel only.

Implementa on:

User Access Levels: Assign different access levels based on job responsibili es.

Password Policies: Enforce strong password policies and regular password changes.

Access Logs: Maintain logs of system access and changes made to the AP system.
4. Automated Controls and System Integra ons

Purpose:

To improve efficiency and reduce manual errors through automa on and system integra ons.

Implementa on:

ERP Systems: Use Enterprise Resource Planning (ERP) systems like SAP to automate invoice processing,
approval workflows, and payment processing.

Automated Matching: Implement automated three-way matching to verify invoices against POs and
GRNs.

Integra on: Integrate the AP system with other financial systems for seamless data flow and real- me
updates.

5. Regular Reconcilia ons

Purpose:

To ensure that the accounts payable ledger matches the general ledger and bank statements.

Implementa on:

Monthly Reconcilia ons: Reconcile AP sub-ledgers with the general ledger and bank statements at
least monthly.

Discrepancy Resolu on: Inves gate and resolve discrepancies promptly to maintain accurate financial
records.

6. Vendor Management and Master Data Controls

Purpose:

To ensure the accuracy and integrity of vendor informa on and reduce the risk of fraudulent vendors.

Implementa on:

Vendor Onboarding: Implement a thorough vendor onboarding process, including background checks
and verifica on of vendor details.

Master Data Maintenance: Regularly review and update vendor master data to ensure it is accurate
and up-to-date.

Access Restric ons: Limit the ability to create or modify vendor records to authorized personnel.

7. Payment Controls

Purpose:

To ensure that payments are made accurately, mely, and to legi mate vendors.

Implementa on:

Payment Authoriza on: Require mul ple levels of authoriza on for payments, especially for large
amounts.
Payment Methods: Use secure payment methods, such as electronic funds transfers (EFT) or
automated clearing house (ACH) payments.

Pre-Approval for Payment Runs: Review and approve payment runs before they are executed.

8. Fraud Detec on and Preven on

Purpose:

To iden fy and prevent fraudulent ac vi es within the AP process.

Implementa on:

Fraud Detec on So ware: Implement so ware to monitor transac ons for unusual pa erns or red
flags.

Whistleblower Policies: Establish and promote policies that encourage employees to report suspicious
ac vi es.

Regular Audits: Conduct regular internal and external audits of the AP process to iden fy and address
poten al fraud risks.

9. Document Reten on and Record-Keeping

Purpose:

To maintain accurate records for audi ng, compliance, and historical reference.

Implementa on:

Document Reten on Policy: Establish and enforce a document reten on policy that complies with
regulatory requirements.

Secure Storage: Store documents securely, whether electronically or physically, to protect sensi ve
informa on.

Audit Trails: Maintain detailed audit trails of all AP transac ons, including approvals and changes.

10. Training and Awareness

Purpose:

To ensure that employees understand AP processes, controls, and the importance of compliance.

Implementa on:

Regular Training: Provide regular training on AP policies, procedures, and internal controls.

Policy Communica on: Clearly communicate AP policies and procedures to all relevant employees.

Updates: Keep employees informed of any changes in AP processes or regulatory requirements.

81. Have you handled any disputes with creditors previously?

Yes. The disputes with Creditors are Invoices, Payments, Documenta on, Communica on, Nego a on
and Legal Ac on.

82. How to Cost Savings AP process?

Cost savings in the AP process can be achieved through various strategies aimed at op mizing
efficiency, reducing manual effort, minimizing errors, and leveraging discounts and incen ves.

1. Invoice Processing Automa on

2. Electronic Payments
3. Nego ate Discounts
4. Streamlined Approval Workflow
5. Vendor Self-Service Portals
6. Supplier Collabora on
7. Policy Enforcement
8. Fraud Detec on and Preven on
9. Key Performance Indicators (KPIs)
10. Data Analy cs

83. How do you priori ze invoice processing and payment within your organiza on?

I priori ze invoice processing based on the payment terms specified in the vendor contract. This
ensures that we are mee ng our obliga ons and avoiding late fees or other penal es. In addi on, I
work with internal stakeholders to ensure that we are paying invoices in a manner that aligns with
business needs and cashflow constraints.

84. What are some common metrics that accounts payable teams track, and why are they
important?

Common metrics include invoice processing me, invoice accuracy, first- me match rate, and payment
meliness. These metrics help to iden fy areas for improvement within the P2P process and can help
to improve supplier rela onships.

85. How do you ensure compliance with financial regula ons and internal policies within your
accounts payable func on?

Compliance is a key priority for any accounts payable func on. To ensure compliance, I closely monitor
adherence to internal policies for requisi on and invoice processing, maintain detailed audit trails for
all transac ons, and stay up-to-date on relevant financial regula ons.
86. What is the role of technology in op mizing the procure-to-pay process?

Technology can play a cri cal role in op mizing the P2P process by automa ng many rou ne tasks like
invoice capture, data entry, and approval rou ng. This frees up resources to focus on more strategic
ini a ves, such as supplier rela onship management.

87. How do you manage communica on with vendors throughout the procure-to-pay process?

Answer: Communica on with vendors is cri cal to maintaining strong rela onships and ensuring
mely payment. To facilitate this, I establish clear lines of communica on, maintain frequent updates
on the status of invoices, and work to resolve any issues as quickly as possible.

88. Can you explain the concept of early payment discounts and how they benefit the organiza on?

Early payment discounts offer cost savings to the organiza on by incen vizing prompt payments to
vendors. This can enhance cash flow and foster posi ve rela onships with suppliers.

89. How do you handle discrepancies between the purchase order, invoice, and goods received note?

Addressing discrepancies involves a systema c inves ga on, clear communica on with relevant
par es, and resolu on through correc ons or adjustments in the accounts payable system.

90. In what ways can automa on improve the efficiency of the procure-to-pay process?

Automa on reduces manual tasks, minimizes errors, accelerates processing mes, and enhances
overall efficiency. It also provides be er visibility into the en re P2P workflow.

91. How do you manage vendor rela onships to ensure smooth accounts payable processes?

Maintaining open communica on, nego a ng favourable payment terms, and resolving issues
promptly are essen al in fostering posi ve vendor rela onships, contribu ng to a more efficient
accounts payable process.

92. What role does technology play in modernizing accounts payable func ons?

Technology streamlines process, enhances data accuracy, enables electronic invoicing, and supports
analy cs for be er decision-making. Integra ng advanced systems can significantly improve the
overall efficiency of accounts payable.
93. How do you approach the segrega on of du es to prevent fraud in the accounts payable
process?

Segrega on of du es involves assigning specific responsibili es to different individuals to create a

system of checks and balances. This helps prevent fraud by ensuring that no single person has control
over an en re transac on from ini a on to payment.

94. What is the difference between Accounts Payable and Accounts Receivable?

Accounts payable refers to the money owed by a company to its vendors and suppliers, while accounts
receivable refers to the money owed to a company by its customers for goods or services sold on credit.
Accounts payable represents a liability for the company, while accounts receivable represents an asset.

95. How do you handle discrepancies or errors in Invoices?

When discrepancies or errors are iden fied in invoices, it is important to inves gate and resolve them.
This involves communica ng with the vendor or supplier to clarify the issue, reviewing suppor ng
documents such as purchase orders and receiving reports, and coordina ng with the appropriate
departments to rec fy the discrepancy.

96. How familiar are you with TDS regula ons in Accounts Payable?

Tax Deducted at Source (TDS) is a tax collec on mechanism in which the payer deducts tax from
payments made to vendors. As an accounts payable professional, I am well-versed in TDS regula ons,
such as deduc ng the appropriate TDS rates, issuing TDS cer ficates to vendors, and ensuring mely
TDS remi ances and filing of TDS returns.

97. What is the SLA for AP process?

SLA is Service Level Agreement.

For AP process, 2 Business Working Days.

98. What are the SAP T Codes?

Vendor Reconcilia on

Display Vendor line items - FBL1N

General Ledger line items - FBL3N

Automa c clear open items - F13

Currency Conversion - F32

Display Clear items - F44

Individual Value Adjustment - F45

Invoice Processing

Post-FB01

Change - FB02

Display - FB03

Reverse - FB08

Non-PO - FB60

PO - ME23N

Credit - FB65

Fast Entry - FB10

PO Post - MIRO

GRN - MIGO

Reversal - MR8M

Payments

Post outgoing - F53

Automa c Payments - F110

99. What is the AP Pre-Month End Close Ac vi es?

1) Maximum PO & Non-PO Invoice Pos ng

2) Purchase order is corrected and approved
3) Accrual are posted for unprocessed external vendor invoices
4) All Refund are allocated & Rejec ons are reset
5) Reversal Accrual Entry is booked for mismatch for Vendors
6) Ne ng is performed between Vendors
7) All Payments are processed and completed
8) Reconcilia on is performed for cri cal Vendors

100. What is the AP Month End Close?

Verify the par al Amounts, Errors, incomplete, on hold before AP Month End Close:

1) Vendors
2) Vendor Reconcilia on
3) PO Invoices
4) Non-PO Invoices
5) GRN Invoices
6) Travel & Expenses Invoices
7) Check Duplicate Invoices
8) Bank Details – Payment Terms, Payment Method, Account Number
9) Payment
10) Debit Balance
11) P Card Administra on
12) Amor za on
13) Accounts Payable to Banks
14) Accounts Payable to Sub Ledger, etc.