Bookkeeper Interview Questions

Responsibilities

A bookkeeper’s responsibilities may include:

• Maintaining petty cash
• Maintaining an annual budget and providing quarterly reports on this budget
• Charting accounts as needed
• Sending customer billing invoices
• Creating day-to-day financial statements using bookkeeping software
• Making sure that all taxes and debts are paid in full
• Working in tandem with external auditors as the need arises

Skills

Bookkeepers are an integral part of maintaining a business in its day-to-day operations. A skilled bookkeeper will need to be able to:

• Maintain a system that will keep track of financial statements
• Manage their time in order to stay on top of all of their duties
• Stay up to date on bookkeeping practices in order to maximize performance
• Have a working knowledge of online databases and spreadsheets

Qualifications

As a basic accounting position, bookkeepers only need a high school degree for most entry-level positions. However, because of the competition within the industry, a bachelor's degree will help tremendously in securing a job. More important, however, is a good track record of communication and organizational skills as well as prior experience in recording financial statements.

Salary

Salaries for bookkeepers range between $37K to $48K with the median being $59K. 

Factors impacting the salary you receive as a bookkeeper include:

• Degrees (associate, bachelor)
• Years of Experience
• Managerial Responsibilities
• Skills and Certifications (bookkeeping, accounting certificate, QuickBooks certification, Certified Bookkeeper (CB), Notary Public)
• Type of Organization You Work For (company, agency, self-employed/independent contractor)

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Bookkeeper Interview Questions

Question: What is a general ledger account?

Explanation: This is a technical question, meant to determine your qualifications as a bookkeeper. This type of question is normally asked early in an interview, after the general and opening questions and before the behavioral questions. The best way to answer a technical question is directly and concisely with little embellishment or other details.

Example: "A general ledger account is a basic or fundamental account used for balance sheet and income statement entries. They are divided into asset accounts such as cash, accounts receivable, inventory, and equipment and liability accounts, including accounts payable, accrued expenses, and pre-paid deposits." 

Question: What is the difference between wages and salaries?

Explanation: This is another technical question, but its intention is slightly different. An interviewer will ask this more detailed question to determine if you are familiar with the nuances of bookkeeping. It is also an indicator of the type of accounting system the organization uses which provides you with a clue as to how to answer it. You should answer with both a definition of the two terms as well as a statement about how you use this information when completing bookkeeping entries.

Example: “Wages and salary are often used interchangeably in bookkeeping. However, you can make the distinction that wages are applied to non-exempt hourly employees and salary is used for exempt employees who work for a pre-determined fee which is not tied to the amount of time they spend on the job. Wages are calculated by multiplying the employee’s hourly rate of pay by the number of hours they worked during the accounting period. The rate may be adjusted for overtime, holiday pay, and other time outside of the normal workday. Salary is calculated by dividing the employee’s annual compensation by the accounting period which is typically a week, bi-weekly, or monthly.”

Question: Why Is accumulated depreciation an asset account?

Explanation: This is another example of a technical question. However, the interviewer will ask a “why” question to learn more about your understanding of the purpose of bookkeeping and accounting practices. Knowing the rationale behind a bookkeeping entry indicates that you will know how to enter a specific transaction and are capable of identifying bookkeeping issues and potential errors.

Example: “Creating an asset account such as accumulated depreciation enables the organization to track both the original cost of the asset as well as its current value. This type of account is known as a contra account since it increases as the asset account decreases and is a credit account. It can also be used to reduce the organization’s tax liability.”

Question: Why Is depreciation on the income statement different from the depreciation on the balance sheet?

Explanation: This is a follow-up technical question which the interviewer uses to confirm your knowledge and dig deeper into a specific topic. This can indicate that the organization may have had issues in this area. You can enhance your perceived qualifications for the job by providing a detailed answer to follow-up questions.

Example: “The difference between depreciation reported on the income statement and depreciation on the balance sheet is based on time. Income statements report activity within a specific time period such as monthly, quarterly, or annually. Balance sheets are cumulative and extend beyond a specific reporting period. Depreciation on the income statement is typically a portion of the overall depreciation of the asset reported on the balance sheet."

Question: What is the three-way match?

Explanation: One of the key services bookkeepers provide is ensuring that organizations pay invoices on time, pay the correct amount, and don’t pay fraudulent or duplicate invoices. An interviewer will ask this question to make sure you understand this and have a methodology to accurately pay invoices. This technical question will help establish your credibility and qualification for the position.

Example: “When processing an invoice for payment, I use a three-way-match methodology to ensure the invoice is legitimate and is paid using the correct amount prior to the due date. This protects the company and helps retain its credit rating. The system refers to the three documents I use. These are the invoice, the purchase order or authorization for the item or service, and the receiving report or confirmation the services were performed. By comparing these, I can verify the amount is correct and the item or services were received. Once this is confirmed, I can perform the entries related to this transaction and authorize payment.”

Question: Can you tell me about a time when you encountered an ethical dilemma in your work? How did you handle it?

Explanation: This is a behavioral question meant to provide the interviewer with some insight into your character. The purpose of this type of question is to see how you would handle a real-world situation you may encounter when working for the hiring organization. The best way to answer a behavioral question is by using the “STAR” format - Situation, Task, Action, and Results. This helps you organize your answer and address the information the interviewer is seeking.

Example: "In my last job, a department head requested I pay an invoice, even though they couldn’t provide documentation the service was performed. (S) I was confident the service was probably performed and the invoice should be paid, but without documentation, I couldn’t authorize the payment. (T) I asked the manager if there was another way they could verify the vendor had performed the service. (A) They collected evidence which indicated the invoice was legitimate. I presented this to my manager who agreed the invoice should be paid which I did. I documented this and reminded the manager that they needed to collect the proper documentation each time a service was completed. This approach resulted in the company retaining its relationship with the vendor and the manager complying with our procedures going forward. (R)" 

Question: What did you do at your last job to increase revenues, reduce costs, or save time?

Explanation: Employers hire staff for one of three reasons:  to help them make money (sales), save money (costs), or save time, which is the same as saving money. While this question addresses this directly, every response to any question you are asked should demonstrate how you will achieve one of these objectives for the company. You can use the STAR structure to respond to this question even though it isn’t a behavioral question. Also, although your answer is retrospective, it should also address an issue the company you are interviewing with may be facing, thereby proving your value to them.

Example: “At my last employer, the key executives were issued company credit cards to pay for business-related expenses. Each month, I had to manually enter the transactions detailed in the bank statements for the cards. This sometimes took up to a full day. I met with the bank who issued the cards and learned that we could integrate their system with our bookkeeping software. This enabled the transactions to be automatically entered into the proper accounts in our system and be classified correctly as well. I could then review the line items to confirm they were correct and authorize the charges. This reduced the time to complete this task by up to 70% and increased the accuracy to nearly 100%, saving the company both time and money.”

Question: In your opinion, is accrual or cash-basis reporting a better option for business management?

Explanation: The purpose of this question is to both get your honest opinion about these two bookkeeping systems and to explore your knowledge of them. The interviewer expects you to describe the benefits of each type of system and then select one, providing your rationale for why you prefer it.

Example: “Both accrual and cash-basis reporting have their merits, and either one can be used effectively. Cash-basis reporting is more useful when completing tax returns and makes the process much easier. However, accrual reporting is a better system to use throughout the year. This is because it provides the management team with an accurate and up-to-date assessment of the financial condition and performance of the organization. Therefore, I recommend accrual reporting for most companies.”

Question: What have you done recently to grow professionally as a bookkeeper?

Explanation: Employers look for employees who are qualified for the position and have a plan for their professional development and to keep themselves up to date with changing industry trends. You should have this type of plan and be able to discuss both your recent efforts as well as your plans for future growth. Components of the plan can include formal and informal education and training, attendance at industry events, membership in professional organizations, and subscriptions to work-related newsletters and blogs.

Example: “I have always had a professional development plan to keep my skills updated and to stay abreast of trends and developments in the accounting industry. I regularly attend workshops, take online courses, and read blogs from accounting and bookkeeping experts. I recently attended a convention sponsored by the American Institute of CPAs. While there, I attended topical workshops, listened to some amazing speakers, and networked with other bookkeeping professionals. I was also able to get credit toward my continuing education requirements.”

Question: What type of financial reports were you responsible for preparing in your previous positions?

Explanation: This is a qualifying question that seeks to understand your familiarity with the different types of financial reports and your ability to create them. It should be easy to answer based on your knowledge and experience. However, be careful not to overstate your capabilities. The interviewer is likely to ask some detailed follow-up questions about specific reports the organization depends on to manage its operations.

Example: “In my recent position, I prepared the most common and popular financial reports. These include the income statement, statement of changes in equity, the balance sheet. cash-flow statement, and the notes accompanying the reports. I also prepared ad-hoc reports as requested by management. Examples of these are banking summaries, investment summaries, net worth reports, and tax summaries.”

Additional Bookkeeper Interview Questions

• Have you used QuickBooks before? If so, what is your level of experience with the program?

• Tell me about a time you caught a discrepancy within financial statements?

• Tell me about a time when a coworker was not doing their fair share of work. What did you do, and what was the outcome?

• What kind of system do you use to stay organized?

• What process do you go through to maintain financial accuracy?