Accountant Interview Questions

My month-end process follows a consistent sequence so nothing slips through. In the final week of the month I chase any outstanding supplier invoices and ensure all purchase orders are matched and approved. On the last working day I post accruals for any expenses incurred but not yet invoiced, review prepayment schedules and release the appropriate portion, and reconcile the bank to the general ledger. In the first three working days of the new month I complete the intercompany reconciliations, post depreciation, review the balance sheet for any unusual items, and produce the P and L variance analysis against budget. I prepare a brief commentary on any variance above 5% so finance leadership can ask informed questions. I also maintain a close checklist with task owners and deadlines because in a team environment a missed step by one person can delay everyone else's reporting.

Accuracy for me comes from process, not from working harder at the end. My first line of defence is the chart of accounts: if the coding structure is clean and consistent, errors are much easier to spot. I reconcile balance sheet accounts monthly, not just at year-end, which means discrepancies surface when they are small and easy to investigate. I use a four-eyes principle for any journal above a materiality threshold I agree with my manager. I also run a standard set of analytical checks after every close: does the gross margin percentage look consistent with prior months? Are accruals reversing correctly? Are there any account balances that have not moved in three months and should have? These checks catch the kind of errors that a straight reconciliation does not always surface. When something does not look right I investigate before I post, not after.

I start by understanding what decision they are trying to make, because that changes what information is actually useful. A budget holder asking about their cost centre does not need a full P and L: they usually need to know whether they are on track, by how much, and what they can adjust. I translate numbers into context rather than delivering raw data. I also try to give them a lead time: if I know the budget report will be ready by the 10th of the month, I tell them so they are not chasing me. I am careful with jargon: when I need to use a technical term I explain it once clearly rather than assuming familiarity. Where possible I build a simple dashboard or summary template so the same questions do not need the same explanation every month. I have found that the better non-finance teams understand the numbers, the fewer errors they make in forecasting and spend management.

During a routine bank reconciliation I identified a timing difference of around £40,000 that had been sitting unreconciled for six weeks. The item had been coded to a suspense account and not followed up. I traced it back through the bank statements and purchase ledger and found it was a duplicate payment to a supplier: the invoice had been entered twice in the ERP by two different team members using slightly different supplier name formats. I escalated to my manager immediately, raised a debit note with the supplier, and we recovered the funds within three weeks. I also identified the root cause: our ERP did not flag duplicate invoice numbers when the supplier record had a slight naming variation. I proposed a vendor deduplication exercise and a duplicate-invoice report that now runs automatically during the weekly payment run. The combination of finding it, recovering it, and preventing recurrence was what I was most proud of.

At my previous company, year-end fell on 31 December, which made it particularly compressed. I started planning in October: I prepared a detailed task list with owners, dependencies, and deadlines, shared it with the team, and held a weekly 30-minute check-in from November onwards to track progress and surface blockers early. I front-loaded as much as possible: by mid-December I had all fixed asset reconciliations complete, the intercompany balances agreed, and the majority of accruals drafted based on run-rate estimates. That left the final two weeks for the items that genuinely could not be done until the period closed. I also agreed clearly with my manager which items were material enough to hold the accounts and which could be posted as best estimates and adjusted in January. That prioritisation prevented us from delaying the audit timeline, which we had missed the previous year.

The operations director at a previous company was concerned that costs were rising but could not understand why the P and L was showing a profit increase in the same period. The issue was timing: a large batch of inventory had been purchased and was sitting on the balance sheet as stock, so the cost had not yet hit the P and L. I explained it using a simple analogy: you paid for the groceries, but you have not eaten them yet, so your weekly food budget looks fine even though the cash is gone. I then built a one-page summary showing cash out versus cost recognised over the same period, and overlaid the stock balance to make the connection visual. He immediately understood and could explain it to his own team. That conversation also led to us setting up a monthly stock turn report so he could monitor inventory movement independently going forward.

In cash accounting you recognise income when cash is received and expenses when cash is paid. It is simple to operate and gives a clear picture of actual cash position, which is why very small businesses and some sole traders use it. In accrual accounting you recognise income when it is earned and expenses when they are incurred, regardless of when cash actually moves. So if you deliver a service in March but receive payment in April, you record the revenue in March. Accrual accounting gives a more accurate picture of financial performance in a given period because it matches income to the costs incurred in generating it. Most businesses above a certain size are required to use accruals for statutory reporting under IFRS or UK GAAP. In practice I work primarily with accrual accounting: the month-end accruals process exists precisely to capture costs incurred but not yet invoiced and to ensure the P and L reflects the true activity of the period.

Deferred revenue, also called unearned revenue, arises when a customer pays for a service or product before you have delivered it. Because you have not yet performed the obligation, the cash received is a liability on the balance sheet, not income on the P and L. As you deliver the service or product over time, you recognise a portion of the deferred revenue as income in each period. A practical example: a software company receives a £12,000 annual subscription payment in January. At that point the full £12,000 sits in deferred revenue. Each month, £1,000 is released to revenue as the subscription is delivered. By December the deferred balance is zero and the full £12,000 has been recognised as revenue across the year. The accounting entry on receipt is debit cash, credit deferred revenue. Each month the entry is debit deferred revenue, credit revenue. Deferred revenue is particularly important to get right in subscription and SaaS businesses, where it can be a significant balance sheet item.

I start with the closing bank balance per the bank statement and work to reconcile it to the closing balance in the general ledger cash account. The most common differences are timing items: cheques or BACS payments that have been posted in the ledger but have not yet cleared the bank, or bank credits that appear on the statement but have not yet been posted. I list each reconciling item, confirm whether it is a genuine timing item or an error, and clear it in the following period once it clears. If I find an item on the bank statement with no corresponding ledger entry, I investigate the source before posting anything. Common causes are direct debits the finance team was not notified of, bank charges, or interest postings. Any unreconciled item that is not a clear timing difference gets escalated immediately: a reconciliation that closes with unidentified differences is not a reconciliation. I sign off the reconciliation and file it with the supporting bank statement so it is available for audit.