Sunday, January 24, 2016

Leadership Interview Questions and Answers

1. What are the most important values you demonstrate as a leader?
The most important value that I have is my integrity. I demonstrate honesty and trust in all my actions to establish credibility as a leader. By having this conviction behind my words and actions, those who I lead are gain buy in to the direction I take them.

2.How have you gained commitment from your team?
I gain commitment from my teams by influencing and persuading them to set specific objectives and also buy into the process. Once they have established cooperation and cohesion, they are on board to attain the goal.

3.How can a leader fail? Tell me about a time when you failed as a leader.
A leader can fail when they can’t get their team on board with the goals of the organization. Factors outside of a leader’s control may also lead to failure such as available resources, time constraints, and the economy.
In the example you give, make sure that you talk about how dealt with a difficult challenge and how you analyzed the setback. Make sure you explain how to seek honest feedback to ensure that you learned from the failure.

4. What is the difference between a leader and a manager?
A manger is able to handle tasks and responsibilities and ensure that others get their work done. A leader will inspire and motivate their team to achieve their goals.

5. What is your greatest strength?
Being able to lead and inspire a team to perform their best and strive to achieve goals. I do this through relationship building, being passionate about the goals, and influencing those around me.

6. What would be your greatest weakness?
When I delegate duties to others that I know I can do better myself. However if I don’t delegate, then I could end up with more work than I can handle myself. I’ve taken courses in time management and learned how to effectively delegate tasks to overcome this weakness.

7. How do you get others to accept your ideas?
I talk about the benefits of the idea and how to apply it. I would stay open to other thoughts and change my ideas in a way that we can all agree. When you gain buy in from others, you are much more successful in attaining the goals than when you make it mandatory to follow procedure.

8. How would you go about praising a team member in public?
I would use a time when we would be gathered in a group, such as a meeting to bring up the praise to the team member. I would recognize their success in front of the group so others could also learn best practices.

9. Are you more effective in a group or one on one basis?
I feel that I am more effective in a group because everyone has some special quality that they bring to a group. We can develop our interpersonal skills by helping those in the group who need it as well as learning from those who are successful.

10. How often do you feel it’s necessary to meet with your team?
I feel that I should meet with my team at least once a week on a set time and day of the week. Communication among teams is critical and this will give the team an opportunity to get together on a regular basis and talk about their challenges and best practices. Also, when our team reaches a milestone, new project begins, an award or promotion is given, or when there is a challenging situation, I would want to bring the team together. Everyone will get the same message that way and we can celebrate successes or come together in challenging times.

11. Describe a time you took a leadership position when you did not have the title of a leader.
In this question, take an example from a situation where you were in a group and took responsibility to delegate to achieve goals. Show how you gained buy in from the other members to follow your lead and the result of your leadership.
For instance, in college we were put into groups of four to complete a marketing project. We had to prepare a 15 page paper and 10 minute presentation on a new product that we would introduce to country outside the U.S. I took initiative among the group to lead a discussion on how we should split up the work, when we will meet throughout the semester, and deadlines for each person’s part of the work. Because I was the one to take lead the discussion and had a plan in mind, I gained the buy in of the other members quickly. I took everyone’s e-mail address and created a group email to help us all keep track of our progress and so we could help each other outside of class and our meetings. By the end of the semester, my group achieved a 95% on our project.

12. How would you go about getting cohesion among a team who disagree?
I would find common ground between the members who disagree. I would talk about the importance of the overall goal and the implications if we can’t come together to achieve it. We would then work together to come to an agreement that is a win/win for both sides.

13. What sort of leader would your team say that you are?
The type that will support them in their goals and success. They would describe me as someone who will clear the way when there are obstacles and always has their back.

14. How do you motivate your team?
I find out what motivates them individually so I can speak to how a goal or change is going to benefit them. I ensure that I have the right amount of positive and constructive feedback to help them perform effectively. My actions always match my words so when I speak to my team with conviction, they are on-board with performing their best.

15. How do you set an example to those on your team?
I perform my best at everything and ensure that my actions match my words. My team sees that my expectations that are set for them are the same expectations I put on myself.

16. Have you ever been in a mentor to another aspiring leader? How did you go about establishing that relationship?
Yes, I treated it much like the relationship that I have with my team. I built a strong working relationship with the person, listened to their goals, gave advice, and my personal experience. I shared my best practices and constantly monitored their progress to celebrate their success and move them in the right direction.

17. What is the most difficult part of being a leader?
In some ways, although you are part of group, you are alone. It’s a leader’s responsibility to see the end goal and vision of an organization to lead others towards it. When others do not see it the same way, you have to be the lone voice to bring them back on track.

18. How do you lead through change?
As a leader, you have to be the first one to embrace change because if you don’t those around you will quickly see that. After that, I ensure that I can communicate the change with conviction that it’s the right path to adopt .I prepare by ensuring that I can answer any questions that may be asked ,or have the resources to find the answers. I listen to others concerns about the change and help them through the transition.

19. How do you measure success for you as a leader?
By the goals that the team achieves. When someone on the team is successful, then it reflects on my leadership.

20. What motivates you to be a leader?
I am motivated by my team’s growth and achievement of their professional and personal goals.

21. What is a leader’s best asset?
Their ability to motivate and inspire a team of professionals who can work together to achieve the goals of the organization.

22. What do you do when you are unsure about how to achieve the goals of the team?
You have to be open to feedback and be willing to ask for help when you are not clear on how to achieve a goal. I would ask my leader first for their feedback on how they believe I should go about achieving the goals. In addition, I would use all the resources available to me to find the best course of action.

23. Are you more comfortable with verbal or written communication?
I am comfortable with both, however I feel that verbal communication is more effective. When you speak to someone directly, you will be able to see their body language toward the communication. You are also able to address questions/concerns faster than in written communication.

24. How would you deliver bad news to your team?
I would bring them together and state the news. I would explain as much as possible as to why it occurred and what steps we will need to take in the future. I would also open it up to the team to speak about their concerns, answer questions, and share their viewpoints as to how we can avoid a similar situation.

25. Is competition among a team healthy? Why or why not?
I believe competition among a team is good as long as it is in good spirit. A team has to have a high level of cohesion among its members to prevent misunderstandings. As a leader, it’s my responsibility to ensure that when there is competition that it is being monitored to ensure its positivity.

26. What are the most difficult decisions to make?
Its difficult to make the decision to let an employee go. However, if they are not performing the way that they should be, it is the right decision. It is never easy to make a decision that will impact a person’s life.

27. What do you get the most criticism about you on?
I have not received criticism on the same area over and over. I’m always open to personal and professional growth and welcome any opportunity to improve. When I receive criticism, I work on improving that aspect and furthering my growth.

28. How would you proceed to reorganize your team?
I would look at the overall goals of the organization and match my team’s strengths up with the reorganization.

29. Have you ever been a member of a successful team? What was your role in the success of the team? Use an example of when you were part of a team and demonstrate the leadership skills that you used to pertain to your role.

30. How do you build support for ideas/goals with people who do not report to you and you have no authority over?
In situations where I must build support for my ideas with cross-functional teams, I ensure that I communicate my idea clearly and effectively. I listen to their feedback to the idea and I will make amends if they are necessary to build support or improve on the idea. I foster an environment where input is sought and validate my idea by explaining why its the best route.

31. How do you go about resolving conflict?
I take a mediated approach to conflict. I believe it’s important to listen to both sides and understand where each is coming from. There is usually some common ground among conflict and I start there and build.

32. Name a time when an employee disagreed with your directive and how you handled it?
I heard them out to understand why they disagree. I may have to go back and re-explain the directive and reasons for it. I would listen to their feedback and if it is the right thing to do, take it to change the directive. However, if that is not the case I would stick to the facts as to why their commitment is necessary.

33. Who are the most important members of your team?
Everyone is equally important. Each person contributes something different to the team and that makes us as a whole stronger.

34. How do you delegate responsibilities to your team?
I match up responsibilities with each member’s strengths. If I have a team member who is working on improving an aspect, I will give them the opportunity to take on the task and ensure they have the tools necessary to be successful. I would monitor their progress as well.

35. Name a time when you had to change a decision due to new facts.
Pick a situation where you showed that you were open to change and show how you were effectively at changing your decision based on the new facts.
For example, I had created new spreadsheet for managers to use at the end of the night to keep track of sales for the day. This spreadsheet was due in an e-mail every morning and helped us see how we were doing on a daily basis. A few months later, our point of sales system allowed us to input this information in a program that would allow managers to input sales for the day. With this new technology, I decided to do away with the spreadsheet and had the managers use the program to capture the information and send it to me.

36. How do you achieve objectives in a fast-paced environment?
I ensure that the team knows the objectives and the timeliness that have been set. I place milestones so each member can check in on their progress.

37. Explain a time when you had to make a decision without all the relevant facts.
Pick a decision that you would not have all the facts for at the time of the decision. Make sure that you speak about all the different options you had and how you picked the best one out of what you had available. Talk about the results/takeaways.
For instance, I had to decide whether our organization was going to be involved in a new marketing campaign that used social media to advertise our products. At this point in time, our company did not have relevant information on how successful our previous social media marketing campaigns were. If we were to proceed, I was going to have dedicate at least one member on my team to its success. It would be time-consuming and if not successful, would take up a lot of productivity time. I decided to take part in the campaign because it was relatively inexpensive and the potential to gather information about best practices when launching them in the future. We ended up with a very successful marketing campaign with measurable results.

38. How do you formulate and present arguments to others?
I look at all sides of an argument first so I know what may come up when I present my position. I base my arguments strictly on facts that are objective.

39. How did you a handle a time when you had to make an unpopular decision?
Talk about a decision that you made that was necessary, but not popular with your team. Explain how you communicated the decision, listened to their concern, and stood your ground on the decision.
One possible answer –Last year I decided to change our commission structure to our sales reps. I felt it was a necessary change because there were too many sales reps who were doing the bare minimum to collect a paycheck. Needless to say, many of the sales reps were upset with the decision. I reiterated the reasons for the change and ensured they had the tools they needed to be successful in the new commission structure. The organization saw an increase in their revenue and sales reps were making 5% more with the new commission structure.

40. What do you do to remain engaged in a conversation?
I actively listen by para-phrasing what others say to me. That ensures that I am on the same page as the other person and keeps me attentive to the conversation.

41. How do you organize projects and tasks?
I organize them by what is the most important and time sensitive to complete.

42. Explain a time when you were not able to meet a deadline?
Use an example were you were not able to meet a deadline due to outside factors.
For instance , there was a big project that my team was working on and I had split up the work among some members and myself. During that time, one member of the team had to leave due to their spouse getting a position in another city. He left at a critical time and I had to re-assign his duties to someone else. I had to get this new person up to speed with the progression of the project and due to this, was not able to complete it on time. We were still able to complete the project a few days after the deadline even with the change in team member.

43. How have you rallied your team in the past in difficult projects/tasks?
I communicate my confidence in their ability to complete the project. I ensure that I remove as many obstacles as possible and they have all the tools/answers they need to complete the task. I ensure there’s clear expectations and open communication.

44. How do you encourage the development of your employees?
I develop my employees by being a mentor, giving effective performance feedback on a regular basis, and coaching. I take a personal interest in the development of my employees and when they see that I am committed to their growth, they are more motivated.

45. What is the most significant change that you brought to an organization?
Provide an example that shows how you demonstrated your vision to make a positive change in the organization. Also, talk about the results of the change.
For instance, at my previous organization, the management team came up the ranks and never had formal management training. They did not know how to lead their former peers and were uncomfortable having productivity discussions with their teams. I felt there was a need to train these managers on the skills they would need to be successful. So I made my case to the leadership team on why it is important and provided examples I was seeing. Due to this, all managers go through a rigorous management training program that prepares them for their new role.

46. Have you were developed an innovative solution to a non-traditional problem?
In your example, show how you promote change and innovation. Solutions to unique problems occur when there is a constant information flow in all directions to ensure responsiveness to change.
For instance, I was responsible for a sales team in my previous position. A separate production staff handled the orders that my sales team would prepare. This production team had difficulty making the deadlines that my sales team promised their clients. In addition, the product was sometimes not customized to the level the client was looking for. So I decided to change the process that our sales reps put in sales order by having the sales rep communicate with the production team who was responsible for each client’s product. This helped my sales rep create achievable timeliness and a product that was the way the client expects.

47. What is the role that leadership plays to a manager?
A leader’s role is to communicate with clarity to the strategic vision to the management team. This vision must be able to be in the form of a clear direction and plans. There should be clear priories, objectives timeliness, accountability, and performance measures.

48. What leadership style do you use?
This answer should be based on the type of organization you are joining. You should show that you are able to change your style in different circumstances.

49. How would you go about developing your team?
I encourage training courses, soft skills workshops, on the job mentoring, and coaching.

50. Have you ever taken on a job that you were unqualified for?
In your example, show how you are not afraid of taking risks to achieve goals at work. Demonstrate your focus on the job at hand and how it inspired others.
For instance, I took on management responsibilities in my previous position to take the place of my manager who had left. I did not have any management experience but I knew that the team was not going to be able to be effective without a leader in place. I may have made a few mistakes, but ultimately was successful in taking on that additional responsibility. The upper level management were impressed by my growth and efforts so they ended up promoting me into that position.

Most Common Job Interview Questions and Answers

Most Common Job Interview Questions and Answers

Preparation is one of the keys to a successful interview. Below are some of the most common questions asked by hiring managers and prospective employers, along with appropriate answers for each question. Review these questions and developing your own answer to each question will help prepare you for various interview scenarios. Being able to answer these questions will also allow you to enter the interview with confidence.

1. Tell me a little bit about yourself
This is probably the most commonly asked question that occurs at the beginning of an interview. Be ready with a short prepared answer but make sure it doesn't sound rehearsed. And don't start blabbering on about your personal life. Limit your answer to your career background and experience unless specifically asked about your personal life. Talk about past jobs as well as work experience that is related to the position you're interviewing for.

2. Why did you leave your last job?

Regardless of why you left your last job make sure to stay positive. Always smile and focus on the positive reason such you were seeking the opportunity to expand your career opportunities, your interest in working with a new firm that provided greater opportunity, you desired to work in a new location, etc. Don't reference previous job problems or differences with management that caused you to leave. If you stay positive, your answer may help you. If you're negative, you will likely decrease your chances of getting the job for which you're interviewing.

3. What relevant work experience do you have in this career field?

Talk about specific work related experience for the position you're interviewing for. Make sure the experience is relevant. Don't talk about previous experience that is not related to the position in question. If you don't have specific career related experience speak about prior experience that has helped you develop the specific knowledge and skills required for the position you are applying for.

4. Do you consider yourself successful?

You should always answer yes to this question. Briefly explain why without going on and on. If you communicate that you're more successful than you really are you may come off as arrogant or unrealistic. A goof explanation is that you have set professional goals and that you have met some of these goals and are on track to meet more in the near future.

5. What would people you work with say about you?

You don't want to say that everyone loves to work with you but you do want to have a few positive examples of co-workers who enjoyed working with you with an explanation why.

6. What do you know about our company?

You always want to make sure that you're pretty familiar with the company that you're interviewing with. Nothing looks worse than a candidate who knows nothing about the company they say they're interested in working for. Find out everything you can about the company, its culture and its goals. You will also want to know how the company is positioned in its market as well as who its major competitors are.

7. What have you done to improve your skills over the past year?

You'll want to be prepare with some very specific examples of what you've done over the last year and what you're currently doing to improve your professional knowledge and skill set as well as anything else you're doing the shows self improvement.

8. Are you currently looking at other job opportunities?

Just answer this question honestly. Sometime an employer wants to know if there are other companies you're considering so that they can determine how serious you are about the industry, they're company and find out if you're in demand. Don't spend a lot of time on this question; just try to stay focused on the job you're interviewing for.

9. Why do you want to work for this company?

Again be honest. The interviewer will be able to sense very quickly if you're be disingenuous. Your answer should be base on your person reasons, career aspirations as well as research you've performed on the company. The most important thing you should do is make sure to relate your answer to your long-term career goals.

10. Do you know anyone that works with our company?

Sometimes companies have policies relating to the hiring of individuals related to current company employees. If you are related to anyone working for the company make sure you're aware of company policies before you enter the interview. If you have a friend or acquaintance working for the company make sure have good relationship with this individual before mentioning them.

11. What type of salary are you looking for?

This can be a very tricky question as the individual asking it is probably digging for something other than a simple answer to the question. We recommend that you don't immediately respond to the question directly. Instead, say something like, “That a difficult question. What is range for this position?” More often than not the interviewer will tell you. If the interviewer insists on direct answer you may want say that it depends on the details of the job - then give a wide salary range.

12. How long do you want to work for us if we hire you?

Here being specific is probably not the best approach. You may consider responding, “I hope a very long time.” Or “As long as we're both happy with my performance.”

13. Did you consider yourself a team player?

Of course you're a team player - who isn't. But a simple yes probably isn't the response the interviewer is looking for. Be ready to provide specific example of how you've worked as part of a cohesive team to get things accomplished and how you've focus on team performance rather than individual performance. Make sure not to brag as this will make it appear as that you're more concerned about your own performance and accomplishments than those of the team.

14. Have you ever you have been in a position where you've had to fire someone? How did you feel about that experience?

Be very thoughtful about your answer. This is a very serious matter for most companies and requires a very serious answer. You need to express that you will do it when it is the right thing to do but you don't want to give the impression that you're callus to the process. Don't forget that firing is not the same as laying someone off - it typically is for the direct benefit of the company.

15. If you had enough money to retire would you?

Just be honest. If you would retire then say so. But since you can't retire, and the interviewer already knows this, simply answer that since you can't this is type of work you prefer doing. However, if you wouldn't retire if you had the money then explain why. Work is an important element of happiness for most people and many won't retire even when they can.

16. What is your philosophy towards work?

This is typically a straightforward question that merits a straightforward answer. Do you have strong worth ethic? Will you do whatever it takes to make sure the job gets done? Just say so in your response. Keep it short, direct and positive.

17. How do you believe you would benefit our organization?

This is a great question that provides you the opportunity to put your best foot forward, to tell the interviewer why he or she should consider hiring you for the job. Make sure you're well prepared for this question as you won't likely get a second chance to really shine.

18. Tell me about a suggestion you have made that has benefited an organization you've worked for.

This is another opportunity to show the interviewer what you're capable of so make sure to be prepared for this type of question. Have an example ready and make sure its an example of a suggestion you've made that was accepted and that have positive influence. If you can come up with an example that relates to the position you're applying for that would be even better.

19. What is the most irritating thing you've experienced about your co-workers?

This question is designed to find out if you get along well on team, with other and whether or not you'll be a fit with the interviewer's organization. It's a trap. Think real hard but fail to come up anything that irritated you about your co-workers. A short positive response is best.

20. What do you consider to be your greatest strength?

There isn't any right answer. Just make sure to make your response positive and true. A few good examples include: Your ability to solve complex problems, Your ability to work well on a team, Your ability to shine under pressure, Your ability to focus in chaotic situations, Your ability to prioritize and organize, Your ability to cut through the fluff to identify the real issues, Your ability to influence other positively. If your strength relates to the position in question that will be more beneficial - but again be honest, don't create a strength for yourself just because you think it will sound good.

21. Why do you think you'll do well at this job?

Provide several reasons including skills, experience and interest. If you can show how you've been successful in a similar career field or job position that will go along way to helping the interviewer believe you'll also be successful at this new job.

22. What is your dream job?

There is almost no good answer to this question, so don't be specific. If you tell the interviewer that the job you're applying for with his/her company is the perfect job you may loose credibility if you don't sound believable (which you probably won't if you're not telling the truth.) If you give the interviewer some other job the interviewer may get concerned that you'll get dissatisfied with the position if you're hired. Again, don't be specific. A good response could be, “A job where my work ethic and abilities are recognized and I can make a meaningful difference to the organization.”

25. What type of people do you not work well with?

Be very careful answering this question as most organization employ professionals with an array of personalities and characteristics. You don't want to give the impression that you're going to have problems working with anyone currently employed at the organization. If you through out anything trivial you're going to look like a whiner. Only disloyalty to the organization or lawbreaking should be on your list of personal characteristics of people you can't work with.

26. Did the salary we offer attract you to this job?

The interviewer could be asking you this question for a number of reasons. Obviously, the salary is an important factor to your interest in this job, but it should not be the overriding reason for your interest. A good answer to this question is, “The salary was very attractive, but the job itself is what was most attractive to me.”

27. What would your previous employer say is your greatest strength?

Be prepared for this question. If you have to sit and think about it it's going to appear as if you're not sure or that you've never identified your own value in the work place - not good. You don't have to have a complex response. Keep it simple and honest. For example, several possibilities could be Leadership, Problem solving ability, Initiative, Energy, Work ethic, Innovative, etc., etc.

28. Tell me about a problem or disagreement you had with previous supervisor?

This question is trap. It is meant to see whether or not you'll speak poorly of an employer. No one wants to hire someone who's going to speak poorly of them down the road. Stay upbeat and positive - and most of all don't say anything negative about a previous employer.

29. What has disappointed you about a previous job?

Again, this question could get you in trouble so tread carefully. Some good answers might be that your previous job didn't provide any room for growth, that you were laid off due to a mandatory reduction in staff, that they closed their office in your state and required you to relocate, etc. Make sure not to mention anything negative about the people you worked with, the company in general or the job itself.

30. How well do you perform under pressure?

This is a fair question, as potential employers want to know if you're going to be able to get the job done even when things get a little bit stressful. You may say that you thrive under pressure or that you're able to get the job done even when things get a little bit stressful, just make sure to provide some real world examples of your ability to work under pressure in a prior job.

31. What motivates you at the work place?

Keep your answer simple, direct and positive. Some good answers may be the ability to achieve, recognition or challenging assignments.

32. Are you willing to work overtime or odd hours?

Be completely honest. You don't want to lie to get the job if you're not going to work the hours required.

33. How do you measure success?

There may be several good answers. Some include: you're able to set realistic, yet aggressive goals that push you and you're able to achieve them, you go the extra mile on all projects, client satisfaction is high, your boss is elated at your performance on all projects, etc.

34. Are you able to relocate if required?

Be completely honest and thoughtful with this one. You don't want to wake up one to find out that you're moving to a new city or state and it may be a major factor in your eligibility for employment. But again, if you don't want to move then the job probably isn't for you.

35. Describe your management style.

Try to avoid specific classifications, whatever it may be. Organizations usually prefer managers who can adapt their skills to different situations.

36. Do you have any blind spots?

This question is often meant to trick candidates since acknowledgment of blind spots would indicate they were aware of them. Also, do not disclose bad habits or other personal concerns. Let the interviewer find out about your personal flaws through the course of the interview without directly stating these flaws.

37. What have you learned from mistakes on the job?

Candidates without specific examples often do not seem credible. However, the example shared should be fairly inconsequential, unintentional, and a learned lesson should be gleaned from it. Moving ahead without group assistance while assigned to a group project meant to be collaborative is a good example.

38. If you were hiring a person for this job, what would you look for?

Discuss qualities you possess required to successfully complete the job duties.

39. Describe your work ethic.

While discussing this, be sure to stress specific examples of what you bring to the company. Good qualities include resolve to fulfill job responsibilities, optimism, and a desire to be as efficient as possible while at work.

40. Do you think you are overqualified for this position?

No matter your previous job experience or educational background, be sure to tell the interviewer you have the knowledge and skills to successfully execute the job responsibilities.

41. How do you propose to compensate for your lack of experience?

The first thing you should do is discuss experience you have the interviewer is unfamiliar with. Once that is detailed, tell the person conducting the interview that you are able to learn new tasks and information in a reasonable period of time and possess a strong work ethic. However, only state this if you can live up to these expectations.

42. Tell me about a time when you helped resolve a dispute between others.

Be sure to discuss a very specific example. Tell the interviewer what methods you used to solve the problem without focusing on the details of the problem.

43. What qualities do you look for in a boss?

Remain optimistic and do not be too specific. Good attributes include moral character, honesty, and intelligence since managers usually believe they possess these qualities.

44. What position do you prefer on a team working on a project?

Do not claim to be comfortable with a specific role if you in are in fact not comfortable with it. However, if you have no problem working in certain roles or situations, be sure to discuss this with the interviewer.

45. Tell me about the most fun you have had on the job.

When answering this question, discuss situations where you completed tasks benefitting your previous employers.

46. What has been your biggest professional disappointment?

When discussing a professional disappointment, make sure to discuss a scenario you could not control. Be positive about the experience and accept personal responsibility where applicable.

47. Do you have any questions for me?

Be prepared to ask questions during every interview, specifically questions demonstrating your desire to benefit a potential employer. The following are examples of good questions: What departments or projects would benefit most from my skills and experience? What do you expect the learning curve to be before I'm effective and efficient?

Accounts and finance interview questions and answers

Accounting period --the period of time over which profits are calculated. Normal accounting periods are months, quarters, and years (fiscal or calendar).

Accounts payable -- amounts owed by the company for the goods or services it has purchased from outside suppliers.

Accounts receivable -- amounts owed to the company by its customers.

Accrual basis, system, or method -- an accounting system that records revenues and expenses at the time the transaction occurs, not at the time cash changes hands. If you buy a coat and charge it, the store records or accrues the sale when you walk out with the coat, not when you pay your bill. Cash basis accounting is used by individuals. Accrual basis accounting is used by most businesses.
Accrued expenses, accruals -- an expense which has been incurred but not yet paid for. Salaries are a good example. Employees earn or accrue salaries each hour they work. The salaries continue to accrue until payday when the accrued expense of the salaries is eliminated.
Aging -- a process where accounts receivable are sorted out by age (typically current, 30 to 60 days old, 60 to 120 days old, and so on.) Aging permits collection efforts to focus on accounts that are long overdue.
Amortize -- to charge a regular portion of an expenditure over a fixed period of time. For example if something cost $100 and is to be amortized over ten years, the financial reports will the entire $100 would show up on the financial report as an expense in the year show an expense of $10 per year for ten years. If the cost were not amortized, the expenditure was made. (entries on Expenditure and Expense.)

-- an increase in value.If a machine cost $1,000 last year and is now worth $1,200, it has appreciated in value by $200. (The opposite of depreciation.)

-- things of value owned by a business. An asset may be a physical property such as a building, or an object such as a stock certificate, or it may be a right, such as the right to use a patented process.

Current Assets are those assets that can be expected to turn into cash within a
year or less. Current assets include cash, marketable securities, accounts receivable, and inventory.

Fixed Assets cannot be quickly turned into cash without interfering with business operations. Fixed assets include land, buildings, machinery,equipment, furniture, and long-term investments.

Intangible Assets are items such as patents, copyrights, trademarks, licenses,
franchises, and other kinds of rights or things of value to a company, which are not physical objects. These assets may be the most important ones a company owns. Often they do not appear on financial reports.

-- a careful review of financial records to verify their accuracy.
Bad debts -- amounts owed to a company that are not going to be paid. An account receivable becomes a bad debt when it is recognized that it won't be paid. Sometimes, bad debts set up to provide for possible bad debts. Creating or adding to a reserve is are written off when recognized. This is an expense. Sometimes, a reserve is also an expense.
Balance sheet -- a statement of the financial position of a company at a single specific time(often at the close of business on the last day of the month, quarter, or while liabilities and capital are listed on the right side or bottom. The total year.) The balance sheet normally lists all assets on the left side or top
numbers on the right side or bottom. A balance sheet balances according to this of all numbers on the left side or top must equal or balance the total of all

equation: Assets = Liabilities + Capital.

Bond --a written record of a debt payable more than a year in the future. The bond shows amount of the debt,due date, and interest rate.
Bookvalue --total assets minus total liabilities. (See also net worth.) Book value also means the value of an asset as recorded on the company's books or financial reports. Book value is often different than true value. It may be more or less.

Breakev enpoint -- 
theamount of revenue from sales which exactly equals the amount of expense.
Breakeven point is often expressed as the number of units that must be sold to
produce revenues exactly equal to expenses. Sales above the breakeven point

produce a profit; below produces a loss.

-- money invested in a business by its owners. (See equity.) On the bottom or right side of a balance sheet.

Capital also refers to buildings, machinery, and other fixed assets in a long-term use. business. A capital investment is an investment in a fixed asset with a

-- to capitalize means to record an expenditure on the balance sheet as an asset, to be amortized over the future. The opposite is to expense. For example, research expenditures can be capitalized or expensed. If expensed, they are charged against income whe

income over a period of time usually related to the life of the products or the expenditure occurs. If capitalized, the expenditure is charged against services created by the research.

Cash --
money available to spend now. Usually in a checking account.
Cash flow -- the amount of actual cash generated by business operations, which usually differs from profits shown.
Chart of accounts -- a listing of all the accounts or categories into which business transactions will be classified and recorded. Each account usually has a number. Transactions are coded by this number for manipulation on computers.

Contingent liabilities --
liabilities not recorded on a company's financial reports, but which might become due. If a company is being sued, it has a contingent liability that will become a real
liability if the company loses the suit.

Cost of sales, cost of goods sold -- 
the expense or cost of all items sold during an accounting period. Each unit sold
has a cost of sales or cost of the goods sold. In businesses with a great many items flowing through, the cost of sales or cost of goods sold is often

During the Period - Ending Inventory.
computed by this formula: Cost of Sales = Beginning Inventory + Purchases

-- an accounting entry on the right or bottom of a balance sheet. Usually an increase in liabilities or capital, or a reduction in assets. The opposite of credit is debit. Each credit in a balance sheet has a balancing debit. Credit has other usages, as in credit your account with the refund." "You have to pay cash, your credit is no good." Or "we will

-- an accounting entry on the left or top of a balance sheet. Usually an increase in assets or a reduction in liabilities. Every debit has a balancing credit.

Deferred income -- a liability that arises when a company is paid in advance for goods or services that will be provided later. For example, when a magazine subscription is paid in advance, the magazine publisher is liable to provide magazines for the life are delivered of the subscription. The amount in deferred income is reduced as the magazines

-- an expense that is supposed to reflect the loss in value of a fixed asset. For example, if a machine will completely wear out after ten year's use, the cost of the machine

is charged as an expense over the ten-year life rather than all at once, when the machine is purchased. Straight line depreciation charges the same amount to expense each year. Accelerated depreciation charges more to expense in early years, less in later years. Depreciation is an accounting expense. In real the depreciation period ends.
life, the fixed asset may grow in value or it may become worthless long before

Discounted cash flow -- a system for evaluating investment opportunities that discounts or reduces the value of future cash flow. (See present value.)

-- a portion of the after-tax profits paid out to the owners of a business as a return on their investment.
Double entry -- a system of accounting in which every transaction is recorded twice -- as a debit and as a credit.
Earnings per share -- a company's net profit after taxes for an accounting period, divided by the average number of shares of stock outstanding during the period.
80 - 20 rule -- a general rule of thumb in business that says that 20% of the items produce 80% of the action -- 20% of the product line produces 80% of the sales, 20 percent of the customers generate 80% of the complaints, and so on. In evaluating any of the transactions you are concerned with. This rule is not exactly accurate,business situation, look for the small group which produces the major portion but it reflects a general truth, nothing is evenly distributed.

-- the owners' share of a business.
-- an expenditure occurs when something is acquired for a business -- an asset is purchased, salaries are paid, and so on. An expenditure affects the balance sheet when it occurs.
However, an expenditure will not necessarily show up on the income statement or affect profits at the time the expenditure is made. All expenditures eventually most expenditures involve the exchange of cash for something, expenses need not show up as expenses, which do affect the income statement and profits. While involve cash. (See expense below.)

-- an expenditure which is chargeable against revenue during an accounting period. An expense results in the reduction of an asset. All expenditures are not expenses. For example, a company buys a truck. It trades one asset - cash - to acquire another asset. An expenditure has occurred but no expense is recorded. Only as the truck is depreciated will an expense be recorded. The concept of expense as different is important in understanding how accounting works and what financial reports from an expenditure is one reason financial reports do not show numbers that represent spendable cash. The distinction between an expenditure and an expense when the expenditure occurs. The opposite is to capitalize.) mean. (To expense is a verb. It means to charge an expenditure against income
Fiscal year -- an accounting year than begins on a date other than January 1.
Fixed asset -- see asset.
Fixed cost -- a cost that does not change as sales volume changes (in the short run.) Fixed costs normally include such items as rent, depreciation, interest, and any salaries

unaffected by ups and downs in sales.
Goodwill-- in accounting, the difference between what a company pays when it buys the assets of another company and the book value of those assets. Sometimes, real goodwill is involved
- a company's good reputation, the loyalty of its customers, and so on.Sometimes, goodwill is an over payment.
-- see profit.
-- a charge made for the use of money.
-- the supply or stock of goods and products that a company has for sale. A manufacturer may have three
kinds of inventory: raw materials waiting to be converted into goods, work in process, and finished goods ready for sale.
Inventory obsolescence -- inventory no longer salable. Perhaps there is too much on hand, perhaps it is out of fashion. The true value of the inventory is seldom exactly what is shown on the balance sheet. Often, there is unrecognized obsolescence.
Inventory shrinkage --
a reduction in the amount of inventory that is not easily explainable. The most
common cause of shrinkage is probably theft.
Inventory turnover -- 
a ratio that indicates the amount of inventory a company uses to support a given level of sales. The formula is: Inventory Turnover = Cost of Sales  Average ratio is significant in comparison with the ratio for previous periods or the

Inventory. Different businesses have different general turnover levels. The ratio for similar businesses.

Invested capital -- the total of a company's long-term debt and equity.
-- a chronological record of business transactions.
-- a record of business transactions kept by type or account. Journal entries are usually transferred to ledgers.
-- amounts owed by a company to others. 
liabilities are those amounts due within one year or less and usually include accounts payable, accruals, loans due to be paid within a year, taxes due within a year, and so on. Long-term liabilities normally include the amounts of mortgages, bonds, and long-term loans that are due more than a year in the future.

-- having lots of cash or assets easily converted to cash.
Marginal cost, marginal revenue -- marginal cost is the additional cost incurred by adding one more item. Marginal revenue is the revenue from selling one more item. Economic theory says that maximum profit comes at a point where marginal revenue exactly equals marginal cost.

Net worth -- 
total assets minus total liabilities. Net worth is seldom the true value of a company.
Opportunity cost --a useful concept in evaluating alternate opportunities. If you choose alternative
A, you cannot choose B, C, or D. What is the cost or loss of profit of not alternative A. In personal life you may buy a car instead of taking a European choosing B, C, or D? This cost or loss of profit is the opportunity cost of the vacation.

vacation. The opportunity cost of buying the car is the loss of the enjoyment

-- a cost that does not vary with the level of production or sales, and usually a cost not directly involved with production or sales. The chief executive's salary and rent are typically overhead.
Post --to enter a business transaction into a journal or ledger or other financial record.
Prepaid expenses, deferred charges -- assets already paid for, that are being used up or will expire. Insurance paid for in advance is a common example. The insurance protection is an asset. It is paid for in advance, it lasts for a period of time, and expires on a fixed date.
Present value -- a concept that compares the value of money available in the future
with the value of money in hand today. For example, $78.35 invested today in a 5% savings account will grow to $100 in five years. Thus the present value of analyze investment opportunities that have a future payoff. $100 received in five years is $78.35. The concept of present value is used to
Price-earnings (p/e) ratio -- the market price of a share of stock divided by the earnings (profit) per share.
P/e ratios can vary from sky high to dismally low, but often do not reflect the true value of a company.

Profit-- the amount left over when expenses are subtracted revenues. 
Gross profit is the profit left when cost of sales is subtracted from sales, before any operating expenses are subtracted. Operating profit is the profit from the primary operations of a business and is sales minus cost of sales minus operating expenses. Net profit before taxes is operating profit minus non-operating expenses and plus non-operating income. Net
profit after taxes is the bottom line, after everything has been subtracted. Also called income, net income, earnings. Not the same as cash flow and does not represent spendable dollars.

Retained earnings -- profits not distributed to shareholders as dividends, the accumulation of a company's profits less any dividends paid out. Retained earnings are not spendable cash.

Return on investment (ROI) -- 
a measure of the effectiveness and efficiency with which managers use the
resources available to them, expressed as a percentage. Return on equity is usually net profit after taxes divided by the shareholders' equity. Return on invested capital is usually net profit after taxes plus interest paid on long-term debt divided by the equity plus the long-term debt. Return on assets used is usually the operating profit divided by the assets used to produce the profit. Typically used to evaluate divisions or subsidiaries. ROI is very useful but can only be used to compare consistent entities -- similar companies in the same industry industries have different ROIs. or the same company over a period of time. Different companies and different

-- the amounts received by or due a company for goods or services it provides to customers. Receipts are cash revenues. Revenues can also be represented by accounts receivable.

Risk --
the possibility of loss; inherent in all business activities. High risk requires high return. All business decisions must consider the amount of risk involved.

-- amounts received or due for goods or services sold to customers. Gross sales are total
sales before any returns or adjustments. Net sales are after accounting for returns and adjustments.

-- a certificate (or electronic or other record) that indicates ownership of a portion of a corporation; a share of stock. Preferred stock promises its owner a dividend that is usually fixed in amount or percent. Preferred shareholders get paid first out of any profits. They have preference. Common stock has no preference and no fixed rate of return. Treasury stock was originally issued to shareholders but has been subsequently acquired by the corporation . Authorized by un issued stock is stock which

official corporate action has authorized but has not sold or issued. (Stock also means the stock of goods, the stock on hand, the inventory of a company.)Sunk costs -- money already spent and gone, which will not be recovered no matter
what course of action is taken. Bad decisions are made when managers attempt to recoup sunk costs.
Trial balance -- at the close of an accounting period, the transactions posted in the ledger are added up. A test or trial balance sheet is prepared with assets on one side and don't, the accountants must search through the transactions to find out why. liabilities and capital on the other. The two sides should balance. If they They keep making trial balances until the balance sheet balances.

Variable cost -- 
a cost that changes as sales or production change. If a business is producing nothing and selling nothing, the variable cost should be zero. However, there will probably be fixed costs.

Working capital -- 
current assets minus current liabilities. In most businesses the major components of working capital are cash, accounts receivable, and inventory minus accounts payable. As a business grows it will have larger accounts receivable and more inventory. Thus the need for working capital will increase.

-- the partial reduction in the value of an asset, recognizing obsolescence or other losses in value.

-- the total reduction in the value of an asset, recognizing that it no longer has any value. Write-downs and write-offs are non-cash expenses that affect profits.

Prepaid expenses
Prepaid expenses are those expenses which are paid in advance to the party. Which ideally comes under Assets side in balance sheet. Journal Entry : - PP exp A/c --- Dr to Cash/Bank A/c.
What is a Non-PO Invoice?
Non-PO invoices means fast line purchasing done for emergency purpose or purchase without proper procurement planning.
Non Po invoices are the invoices issued for utility bills such as rental charges, water bills, telephone charges & electricity charges. while making payment against Non Po invoices, approval from d...

What is the meaning of TDS? How it is charged?
TDS means Tax Deduct at the source. It is deducted by the customer who gets the services from vendor or supplier and is deposited to IT Department.

What is the difference between Finance & Accounts?
Finance is related to money. where as accounts is an art of recording, summarizing, classifying the books of accounts
Finance is the art of managing money, whereas accounting is the language which we use to manage money transactions.

SAP code used in Accounts payable process?
MIRO, ME23N, ME22N,ME33L, MR8M,MIGO, MB5S, FB60, FB03,FB08, FB01, FBL1N, ZFI2, XK03,XD03.

What is difference between account payable and bills payable?
Bills Payable: Bills drawn by the creditor and accepted by the trader in settlement of accounts.
AP: Amount owed by the company to its vendors or suppliers in respective of goods/services purchased on credit.

Vendor Account Reconciliation
Vendor account reconciliation what is the amount of vendor in our books. vendor account and our account much be tally that like this payment, invoice, debit note , credit not , closing or opening balance.
Vendor account reconciliation is outstanding of suppliers or sundry creditors.

Two, Three, and Four Way Matching

In the 2 way matching process quantity and amount on the invoice are matched to the quantity and amount on the corresponding purchase order
The 3 way matching process is used when an operating location is using online receiving,
 In 3 way matching an invoice is matched to the corresponding purchase order for quantity and amount and to receiving information.
The 4 way matching process is used when an operating location is using online receiving and inspection. In 4 way matching an invoice is matched to the corresponding purchase order for quantity and amount, receiving, and inspection information.

There are four types of purchase orders.
1) Standard: This PO is created for one-time purchase of material.
2) Blanket: In this PO delivery schedule are not known clearly.
3) Contract: In this PO material required are not specified.
4) Regular PO: It is a long term agreement PO. In this PO it specifies materials, estimated costs, and tentative delivery schedules.

The Typical Procure to Pay Cycle
These steps are usually involved in your typical procure to pay cycle:
Identification of Requirement
Authorization of Purchase Request
Final Approval of Purchase Request
Identification of Suppliers
Receipt of the Quotation
Selection of the Vendor
Purchase Order Acknowledgement
Advance Shipment Notice
Goods Receipt
Invoice Recording
3 Way Match
Payment to Supplier

Depreciation – What is depreciation?
Definition: Depreciation is permanent and continuing diminution in the quality, quantity or value of an asset.
Depreciation is the measure of wearing out of a fixed asset. All fixed assets are expected to be less efficient as time goes on.
Depreciation is calculated as the estimate of this measure of wearing out and is charged to the Profit & Loss account either on a monthly or annual basis. The cost of the asset less the total depreciation will give you the Net Book Value of the asset.
Types of depreciation
Common methods of depreciation are as follows:Straight Line Depreciation; Same depreciation is charged over the entire useful life.
Reducing Balance Depreciation; Depreciation expense decreases at a constant rate as the life of an asset progresses.
Sum of the Year' Digits Depreciation; Depreciation charge declines by a constant amount as the life of the asset progresses.
Units of Activity Depreciation;Depreciation charge varies each period in proportion to the change in level of activity
Accruals Concept
Accrual Definition
An accrual is a journal entry that is used to recognize revenues and expenses that have been earned or consumed, respectively, and for which the related cash amounts have not yet been received or paid out. Accruals are needed to ensure that all revenues and expenses are recognized within the correct reporting period, irrespective of the timing of the related cash flows. Without accruals, the amount of revenue, expense, and profit or loss in a period will not necessarily reflect the actual level of economic activity within a business.
Examples of accruals that a business might record are:
Expense accrual for interest. A local lender issues a loan to a business, and sends the borrower an invoice each month, detailing the amount of interest owed. The borrower can record the interest expense in advance of invoice receipt by recording accrued interest.
Expense accrual for wages. An employer pays its employees once a month for the hours they have worked through the 26th day of the month. The employer can accrue all additional wages earned from the 27th through the last day of the month, to ensure that the full amount of the wage expense is recognized.
Expense accrual for supplier goods and services. A supplier delivers goods at the end of the month, but is remiss in sending the related invoice. The company accrues the estimated amount of the expense in the current month, in advance of invoice receipt.
Sales accrual. A services business has a number of employees working on a major project for the federal government, which it will bill when the project has been completed. In the meantime, the company can accrue revenue for the amount of work completed to date, even though it has not yet been billed.

What is the difference between a Credit and a Debit balance?
A debit is an entry on the left side of an account. For example, the account Cash is debited when cash is received. The account Cash will be credited when cash is paid out. (A credit is an entry on the right side of an account.)
Credit balance: balance in an account showing that more money has been received than is owed
Debit balance: balance in an account showing that more money is owed than has been received

Explain Bank Reconciliation Statement. Why is it prepared?
Bank Reconciliation Statement is a statement prepared to reconcile the balances of cash book maintained by the concern and pass book maintained by the bank at periodical intervals. At the end of every month entries in the cash book are compared with the entries in the pass book. The causes of differences in balances of both the books are scrutinized and then reconciliation statement is prepared. This statement is prepared for a special purpose and once in a month. It is prepared with a view to indicate items which cause difference between the balances as per the bank columns of the cash book and the bank pass book at a particular date.

What are the reasons which cause pass book of the bank and your bank book not tally?
* Cheque deposited into the bank but not yet collected
* Cheques issued but not yet presented for payment
* Bank charges
* Amount collected by bank on standing instructions of the concern.
* Amount paid by the bank on standing instructions of the concern.
* Interest debited by the bank
* Interest credited by the bank
* Direct payment by customers into the bank account
* Dishonour of cheques
* Clerical errors
Process flow for Procure to pay will go through two departments
(Commercial & Finance)
Procure - Commercial Department The following steps invovle to prcure any item
1. Received Requsition from concern Department
2. Request for Quotation from Suppliers at least three
3. Finalize the best Quotation by keeping in mind about our companies standard
4. Check the Budget for the same
5. Negociate with supplier for more economic pricing and finalize the payment terms
6. Process the PO and forward to the supplier to supply the goods and services
Pay Cycle - Finance Department
The following steps need to be fulfil
1. Invoice should be match with PO
2. Invoice should has all the supporting documents such as PO copy,Delivery note duly signed by reciever (our staff who authorized to received goods / store keeper)
3. If the invoice is for services then it should be forwarded to the concern department head or project manager for his confirmation of work done and his approval
4. Even if it not the services invoice, it should forwarded to the concern person's approval who request the PO for the same
5. Finance can reject the invoice if it is not budgeted and ask for the reasons.
6. After receiving all the confirmation and approvals from the concern department heads the invoice will be update in to the accounting system first in order to avoid any duplication of Invoice and PO (it shown on accounting package if the invoice is duplicate if not, altelast it tells you if the PO already used or cancel)

7. Finance approved the invoice and process the payment base on payment terms with the supplier.