Procure To Pay (PTP/P2P) Interview Ques ons and Answers

1. Purchase Requisi on (PR)

2. Purchase Order (PO)
3. Vendor Selec on
4. Order Acknowledgement
5. Goods Receipt Entry
6. Vendor Master Data
7. Invoice Scanning
8. Invoice Processing
9. Payment Processing
10. Vendor Reconcilia on
11. GR IR Reconcilia on
12. AP SL V GL Reconcilia on
13. Travel and Expenses
14. AP Month End Close
 P2P Interview Q&A

1. Walk through the Procure to pay (P2P) process?

Answer:

1. Iden fy Need
2. Create Purchase Requisi on (PR)
3. Purchase Requisi on Approval
4. Create Purchase Order (PO)
5. Purchase Order Approval and Dispatch
6. Order Acknowledgment
7. Goods/Services Receipt (GRN)
8. 3-Way Match
9. Vendor Invoice Processing
10. Invoice Approval
11. Payment Processing
12. Record and Reconcile

2. What are the Key Documents in P2P?

Answer:

 Purchase Requisition (PR)

 Purchase Order (PO)
 Goods Receipt Note (GRN)
 Vendor Statement
 Vendor Invoice
 Payment Confirmation

3. What are the ERPs used in P2P?

Answer:

 SAP S/4 HANA

 Oracle E-Business Suite
 Oracle NetSuite
 Zoho Books
 Quick Books
 Xero
 Wave
 Sage
 Blackline
4. What are the Journal Entries used in P2P?

1. Purchase Order Creation

No journal entry

2. Goods Receipt / Inventory Receipt (For inventory items)

When inventory is received:

Debit: Inventory / Raw Materials A/c xxx

Credit: GR/IR Clearing A/c xxx

3. Invoice Receipt / Invoice Booking

When invoice is received from vendor:

Debit: GR/IR Clearing A/c xxx

Credit: Accounts Payable – Vendor A/c xxx

If there is no GR step (for services or non-inventory items), you book the invoice directly:

Debit: Expense A/c xxx

Credit: Accounts Payable – Vendor A/c xxx

4. Payment to Vendor

When payment is made:

Debit: Accounts Payable – Vendor A/c xxx

Credit: Bank A/c xxx

5. Advance Payment to Vendor (if applicable)

When paying advance:

Debit: Advance to Vendor A/c xxx

Credit: Bank A/c xxx

At invoice receipt (adjusting advance):

Debit: Expense / GRIR A/c xxx

Credit: Advance to Vendor A/c xxx

Credit: Accounts Payable A/c xxx

6. Purchase Returns (if any)

When goods are returned:

Debit: GR/IR Clearing A/c xxx

Credit: Inventory A/c xxx

5. What is a Purchase Requisition (PR)?

Answer:
A Purchase Requisition (PR) is an internal document used to request the procurement of goods or services. It is typically
created by a department or employee and sent to the procurement team for approval. The PR contains details like item
description, quantity, estimated cost, and required delivery date. Once approved, it can be converted into a Purchase Order
(PO).

6. What are the key components of a Purchase Requisition?

Answer:
Key components of a PR include:

 Requisition number
 Requestor's name/department
 Item description and quantity
 Estimated price
 Required delivery date
 Delivery location
 Budget code or GL account
 Approval workflow status
7. How is a Purchase Requisition different from a Purchase Order?

Answer:

Purchase Requisition (PR) Purchase Order (PO)

Internal document to request purchase External document sent to vendor
Created by user department Created by procurement team
Requires approval before PO creation Legally binding contract with vendor
Non-binding Binding

8. What is the approval workflow for a Purchase Requisition?

Answer:
The approval workflow typically includes:

1. Submission by the requester

2. Validation by the department head or budget owner
3. Routing to procurement or finance for final approval
4. Automatic or manual conversion to a PO once fully approved

ERP systems like SAP or Oracle automate this workflow using rules and thresholds.

9. What are the common errors or challenges in the Purchase Requisition process?

Answer:
Common issues include:

 Incomplete or incorrect item details

 Missing budget codes
 Delayed approvals due to workflow bottlenecks
 Duplicate requisitions
 Lack of standardization across departments

Using ERP systems with validation checks and automated workflows can help reduce these issues.

10. What is a Purchase Order (PO)?

Answer:
A Purchase Order (PO) is a formal document issued by a buyer to a supplier to confirm the purchase of goods or services. It
outlines the types, quantities, agreed prices, delivery terms, and payment conditions. Once accepted by the vendor, it
becomes a legally binding contract.
11. What are the key components of a Purchase Order?

Answer:
A standard PO includes:

 PO number
 Vendor name and contact details
 Item description and quantity
 Unit price and total cost
 Delivery address
 Expected delivery date
 Payment terms (e.g., Net 30)
 Buyer’s company details
 Tax and shipping information

12. What are the different types of Purchase Orders?

Answer:
The main types of Purchase Orders are:

1. Standard PO – Used for one-time purchases with known details.

2. Blanket PO – Used for recurring purchases over a period at a fixed price.
3. Contract PO – An agreement for long-term supply without specifying quantity.
4. Planned PO – Used for purchases with tentative delivery dates.

13. What is the difference between a Purchase Order (PO) and an Invoice?

Answer:

Purchase Order (PO) Invoice

Sent by buyer to vendor Sent by vendor to buyer
Confirms the intention to purchase Requests payment for goods/services
Issued before goods/services are received Issued after delivery
Initiates procurement Initiates payment

14. What is the 3-way match in relation to Purchase Orders?

Answer:
The 3-way match is a control mechanism used in Accounts Payable to validate a payment. It involves matching:

1. Purchase Order (PO) – What was ordered

2. Goods Receipt Note (GRN) – What was received
3. Vendor Invoice – What was billed

Only when all three documents match, the invoice is approved for payment. This helps prevent overpayments, duplicate
payments, and fraud.
15. What factors do you consider when selec ng a vendor?

Answer:
Vendor selec on is based on several key criteria, including:

 Price compe veness

 Quality of goods or services

 Delivery melines and reliability

 Financial stability

 Reputa on and references

 Compliance with legal and regulatory standards

 Capacity to scale

 Post-sales service and support

Tools like RFI (Request for Informa on), RFP (Request for Proposal), and RFQ (Request for Quota on) are o en used to
evaluate and compare vendors objec vely.

16. What documents are required during vendor onboarding?

Answer:
The vendor onboarding process typically requires:

 Vendor registra on form

 Tax documents (e.g., W-9, W-8, GST, PAN, TIN)

 Bank account details with cancelled cheque or le er

 Business licenses or incorpora on documents

 NDA (Non-Disclosure Agreement)

 Signed contracts or terms and condi ons

 Insurance cer ficates (if applicable)

These documents help ensure compliance, legal validity, and secure vendor setup in the ERP system.

17. What is the process of vendor onboarding in an ERP system?

Answer:
The typical ERP-based vendor onboarding process involves:

1. Vendor registra on via a portal or manual form.

2. Verifica on of submi ed documents by compliance or procurement team.

3. Approval from internal stakeholders (legal, finance, etc.).

4. Crea on of vendor master record in the ERP (e.g., SAP using XK01/XD01, Oracle, NetSuite).

5. Communica on of vendor code and PO terms to the supplier.

This process ensures vendor data is accurate, validated, and compliant.

18. How do you assess vendor risk during onboarding?

Answer:
Vendor risk is assessed based on:

 Financial health (credit score, balance sheet)

 Regulatory compliance (e.g., sanc ons, blacklists)

 Opera onal risk (delivery history, disaster recovery)

 Cybersecurity and data handling (for service vendors)

 Geopoli cal and supply chain risks

Tools like risk ques onnaires, background checks, and third-party risk pla orms (e.g., Dun & Bradstreet, Risk methods) are
o en used.

19. How do you maintain vendor master data integrity?

Answer:
Vendor master data integrity is maintained through:

 Segrega on of du es (different users for crea on, modifica on, approval)

 Periodic vendor audits and cleanup

 Valida on controls in ERP systems

 Approval workflows for changes

 Avoiding duplicate vendor crea on

Proper controls prevent fraud, duplicate payments, and ensure accurate repor ng.

20. What is an Order Acknowledgement, and why is it important?

Answer:
An Order Acknowledgement is a confirma on sent by the supplier to the buyer a er receiving a Purchase Order (PO). It
confirms that the supplier has accepted the order and agrees to the terms, including quan ty, price, delivery date, and other
specifica ons.

Importance:

 Ensures both par es are aligned on order terms

 Helps track delivery melines

 Reduces errors and miscommunica on

 Acts as a formal commitment from the vendor

It’s especially useful for managing lead mes, backorders, or product subs tu ons.
21. What should you verify when receiving an Order Acknowledgement from a vendor?

Answer:
When reviewing an Order Acknowledgement, verify the following details:

 PO number matches the original purchase order

 Item descrip on and quan ty are correct

 Unit price and total amount align with agreed terms

 Delivery date and shipping terms are acceptable

 Vendor contact details are accurate

 Any excep ons or changes (e.g., backorders, subs tu ons) are highlighted

If discrepancies are found, the buyer should immediately clarify and resolve the issue with the supplier before proceeding.

22. What is a Goods Receipt (GR) or Service Entry Sheet (SES), and why are they important in the P2P process?

Answer:

A Goods Receipt (GR) is the process of recording the receipt of physical goods from a supplier against a Purchase Order (PO).
It confirms that the goods ordered have been delivered and received in proper condi on and quan ty.

A Service Entry Sheet (SES) is used when services (not physical goods) are delivered. It acts as proof that the service has
been rendered and accepted.

Importance in P2P:

 Acts as the third document in the 3-way match (PO → Invoice → GR/SES)

 Triggers inventory update (for goods) and expense booking (for services)

 Ensures the company pays only for what is received

 Helps in iden fying discrepancies (e.g., short delivery, damaged goods, incorrect billing)

 Required for invoice pos ng and payment approval in most ERP systems (like SAP, Oracle)

23. What is Vendor Master Data?

Answer:
Vendor Master Data refers to the centrally stored informa on about vendors or suppliers within an ERP system. It includes
all relevant details required to conduct business transac ons with vendors, such as:

 Vendor name and address

 Contact details

 Tax informa on (e.g., PAN, GST, W-9)

 Bank account details

 Payment terms and methods

 Purchasing and accoun ng data

This data is essen al for processing POs, invoices, and payments accurately.
24. What are the key components of Vendor Master Data?

Answer:
The key components typically include:

 General Data: Vendor name, address, contact, tax ID

 Company Code Data: Payment terms, reconcilia on account, bank details

 Purchasing Data: Order currency, incoterms, payment methods, purchasing group

 Control Data: Withholding tax info, payment block indicator

In SAP, Vendor Master is maintained using T-Codes like XK01 (create), XK02 (change), and XK03 (display).

25. Why is Vendor Master Data Management important?

Answer:
Proper Vendor Master Data Management helps:

 Prevent duplicate vendor records

 Ensure accurate and mely payments

 Maintain compliance with tax and audit regula ons

 Improve repor ng and analy cs

 Reduce fraud risks through controlled access and approval workflows

Clean and standardized data is essen al for efficient P2P processing and avoiding costly errors.

26. What are common issues in Vendor Master Data and how do you avoid them?

Answer:
Common issues:

 Duplicate vendors

 Incomplete or incorrect data (e.g., wrong bank details, tax ID)

 Outdated contact informa on

 Missing approvals or documenta on

Preven on methods:

 Use data valida on rules in the ERP system

 Apply maker-checker approval workflows

 Conduct periodic data audits and cleanups

 Use vendor self-service portals for updates and onboarding

27. How do you ensure data security and compliance in Vendor Master Data?

Answer:
To ensure security and compliance:

 Assign role-based access controls (RBAC) for vendor data changes

 Use audit trails to log changes and user ac vity

 Maintain document backups for vendor onboarding

 Comply with regula ons like SOX, GDPR, and local tax laws

 Periodically review inac ve or blocked vendors

28. What is invoice scanning and how does it work in the Accounts Payable process?

Answer:
Invoice scanning is the process of digi zing paper invoices using OCR (Op cal Character Recogni on) or Intelligent
Document Processing (IDP) tools. The scanned data is extracted and fed into an ERP or invoice processing system.

How it works:

1. Vendor sends a paper or PDF invoice.

2. Invoice is scanned or imported into an OCR system (e.g., Kofax, Data Cap, Read So , ABBYY).

3. Key fields like invoice number, date, vendor name, PO number, amount, and tax are automa cally captured.

4. Data is validated, matched against POs and receipts (3-way match), and sent for approval or payment.

29. What are the benefits of using invoice scanning in AP opera ons?

Answer:
Invoice scanning offers mul ple benefits:

 Reduces manual data entry and associated errors

 Speeds up invoice processing me

 Enables touchless or straight-through processing (STP)

 Supports paperless workflow and digital archives

 Enhances compliance and auditability

 Improves visibility and tracking through digital dashboards

It is especially valuable in high-volume AP environments.

30. What challenges do you face with invoice scanning, and how do you resolve them?

Answer:
Common challenges:

 Poor-quality scans or handwri en invoices

 Incorrect data extrac on (e.g., wrong invoice number or amount)

 Duplicate invoices not flagged

 Unmatched invoices due to missing PO or GR data

 Varia ons in invoice formats across vendors

Resolu ons:

 Use template learning or AI-based OCR for dynamic layouts

 Regularly train the system using feedback from AP teams

 Implement valida on rules and excep on handling workflows

 Educate vendors to follow standard invoice formats

 Perform manual review or escala on for failed invoices

31. What is invoice processing in Accounts Payable?

Answer:
Invoice processing refers to the end-to-end workflow of receiving, valida ng, recording, and paying vendor invoices. It
includes:

 Invoice receipt (paper, email, EDI)

 Data extrac on and entry

 2-way matching (Invoice vs PO)

 3-way matching (Invoice vs PO vs GR)

 Approvals

 Pos ng in ERP

 Payment processing

32. What is the difference between PO and Non-PO invoices?

Answer:

 PO Invoice: Linked to a Purchase Order. Follows a 2-way (PO-Invoice) or 3-way (PO-Invoice-GR) match before
approval.

 Non-PO Invoice: No Purchase Order reference. Requires manual approval, generally for services, u li es, or one-off
expenses.
33. What is 3-way matching in invoice processing?

Answer:
3-way matching ensures consistency among:

1. Purchase Order (PO)

2. Goods Receipt (GR)

3. Vendor Invoice

It validates that the quan ty and price on all three documents match before payment is approved, reducing fraud and errors.

34. What are common reasons for invoice mismatch or failure in matching?

Answer:

 Quan ty or price differences between invoice and PO

 Incorrect or missing PO number

 Goods not received or not posted in ERP

 Tax or shipping charges not accounted for in PO

 Duplicate invoices

35. What ERP systems have you used for invoice processing?

Answer:
(Example answer – tailor based on your experience)
“I have worked with SAP (T-code MIRO for invoice pos ng, MIR4 for display) and Oracle NetSuite for invoice processing.
These systems support 3-way matching, payment term configura on, and vendor master integra on.”

36. How do you handle duplicate invoices?

Answer:
ERP systems usually flag duplicate invoices using controls on:

 Invoice number

 Vendor ID

 Amount and date

If a duplicate is iden fied, it's either blocked or routed to AP for manual review. Training vendors to avoid re-submi ng
already paid invoices is also essen al.
37. What steps are taken before making a payment to a vendor?

Answer:

1. Validate invoice against PO/GR (2-way/3-way match)

2. Ensure proper approval

3. Check due date based on payment terms

4. Confirm vendor banking details

5. Post invoice in ERP

6. Run payment run (e.g., F110 in SAP)

38. What are the key controls in invoice processing to prevent fraud?

Answer:

 Segrega on of du es (invoice entry, approval, and payment)

 3-way matching

 Duplicate invoice check

 Approval workflows

 Vendor master controls

 Audit trails and excep on reports

39. How do you priori ze invoices for payment?

Answer:
Invoices are priori zed based on:

 Due date and payment terms

 Early payment discount availability

 Vendor cri cality

 Company cash flow

Automated systems can tag high-priority invoices for early processing.

40. How do you handle invoice discrepancies with vendors?

Answer:
When discrepancies occur:

1. Communicate with the vendor promptly

2. Share the PO and GR details for clarifica on

3. Request revised invoice or credit note if needed

4. Escalate internally for resolu on if urgent

5. Document the interac on for audit purposes

41. What is payment processing in Accounts Payable?

Answer:
Payment processing involves valida ng approved invoices, scheduling due payments, and disbursing funds to vendors. It
includes payment method selec on, payment run execu on, bank file genera on, and reconcilia on. Accuracy and ming
are cri cal to avoid late fees and maintain supplier rela onships.

42. What are the common payment methods used?

Answer:

 ACH

 Direct Deposit

 Wire Transfer

 Check

 Credit Card

 P-Card

 SEPA (EU)

 BACS (UK)

 Cash

43. What is the significance of payment terms?

Answer:
Payment terms define when a vendor should be paid (e.g., Net 30, Net 60, 2/10 Net 30). They affect cash flow, vendor
rela ons, and discounts. Following terms ensures mely payments and may help companies take advantage of early
payment discounts.
44. What are the steps in the payment run process (e.g., in SAP)?

Answer:
Example (SAP – F110):

1. Enter payment parameters (Company Code, Vendor, Due Date)

2. Select payment methods and bank details

3. Propose payment

4. Review and edit payment proposal

5. Execute payment run

6. Generate payment file/checks

7. Post payment document

8. Send remi ance advice

45. What controls help prevent duplicate or fraudulent payments?

Answer:

 3-way match (PO-Invoice-GR)

 Segrega on of du es

 Duplicate invoice checks

 Vendor bank detail valida on

 Payment approval workflows

 Audit logs and excep on reports

46. What is a payment block, and when is it used?

Answer:
A payment block is a flag used to temporarily prevent an invoice from being paid. Reasons may include:

 Discrepancies in invoice

 Pending approvals

 Duplicate entries

 Vendor dispute

 Missing GR or PO reference
47. What is a remi ance advice, and why is it important?

Answer:
Remi ance advice is a document sent to vendors explaining the details of the payment (invoice numbers, amounts,
deduc ons). It ensures transparency and helps vendors reconcile their records, reducing disputes.

48. How do you handle urgent or manual payments?

Answer:

 Request must be approved by finance/controller

 Confirm invoice validity and documenta on

 Process payment manually in ERP or banking portal

 Update ERP to mark the invoice as paid

 No fy vendor with remi ance advice

49. What are common issues in payment processing and how do you resolve them?

Answer:
Issues:

 Bank rejec ons

 Duplicate payments

 Incorrect vendor bank details

 Late payments

Resolu ons:

 Regular vendor master audits

 Bank valida on before payment run

 Excep on handling workflows

 Clear communica on with vendors and internal teams

50. How is payment reconcilia on performed?

Answer:
Payment reconcilia on involves matching ERP payment records with bank statements. It verifies that:

 Payments were actually debited from the account

 Vendor received the correct amount

 No duplicate or failed transac ons occurred

This is o en done using bank reconcilia on tools or T-codes like FF67 or FBL1N in SAP.
51. What is vendor reconcilia on?

Answer:
Vendor reconcilia on is the process of comparing the vendor ledger balance in the company’s books with the statement of
accounts received from the vendor to ensure that both par es agree on the outstanding amount.

52. Why is vendor reconcilia on important?

Answer:

 Ensures accuracy of payables

 Iden fies discrepancies like missed invoices, double payments, or credit notes

 Prevents payment delays and vendor disputes

 Assists in period-end closing and audit compliance

53. What are the key documents used in vendor reconcilia on?

Answer:

 Vendor Statement of Account (SOA)

 Company’s vendor ledger

 Invoices and credit notes

 Goods Receipt Notes (GRN)

 Debit notes

 Payment confirma ons and remi ance advice

54. How o en should vendor reconcilia ons be performed?

Answer:
Typically done:

 Monthly for key or high-volume vendors

 Quarterly for low-risk vendors

 More frequently before period-end closing or audit periods

55. What are common discrepancies found during vendor reconcilia on?

Answer:

 Missing invoices or credit notes

 Unapplied payments

 Duplicate payments

 Goods received but invoice not recorded

 Invoice received but goods not received

 Currency exchange differences (for foreign vendors)

56. How do you resolve reconcilia on discrepancies?

Answer:

 Communicate with the vendor and request missing documents

 Post or reverse journal entries as needed

 Escalate unresolved issues to management or procurement

 Update the vendor ledger and issue a revised statement if needed

57. What ERP reports help with vendor reconcilia on?

Answer:

 SAP: FBL1N (Vendor Line-Item Display), FAGLL03, FK10N

 Oracle: AP Trial Balance, Vendor Aging Report

 NetSuite: Vendor Balance Summary, AP Aging

These reports help track open items and payment history.

58. What is a vendor statement, and how do you validate it?

Answer:
A vendor statement is a summary of transac ons between the vendor and the company. To validate it:

 Match each item with entries in the company’s vendor ledger

 Check for missing or unmatched invoices

 Reconcile payments and credit notes

 Verify balances and dates

59. How do you handle a situa on where the vendor reports an outstanding balance, but your books show it's paid?

Answer:

 Check payment details (amount, date, reference)

 Verify if payment advice was sent correctly

 Request the vendor to check their bank records

 Provide payment proof and remi ance advice

 Escalate to bank if necessary

60. What controls do you implement to ensure proper vendor reconcilia on?

Answer:

 Set monthly/quarterly reconcilia on schedules

 Maintain documenta on of reconcilia ons and approvals

 Use standard templates for reconcilia on

 Ensure segrega on of du es in invoice processing and payments

 Conduct periodic audits and vendor confirma ons

61. What is GR/IR in SAP or ERP systems?

Answer:
GR/IR stands for Goods Receipt/Invoice Receipt. It’s a clearing account used to temporarily hold the value of goods received
but not yet invoiced. It ensures that inventory is updated when goods are received and that liability is recorded only when
the invoice is received.

62. Why is GR/IR reconcilia on important?

Answer:

 Ensures the accuracy of financial statements

 Prevents over/understatement of liabili es

 Helps iden fy mismatches between goods received and invoices

 Cri cal for period-end closing and audit compliance

63. What happens in the system when a goods receipt is posted but the invoice is not received?

Answer:
The system debits inventory and credits the GR/IR clearing account. No liability is created un l the invoice is received.
64. What happens when the invoice is received before the goods are received?

Answer:
The system debits the GR/IR clearing account and credits vendor liabili es. This creates a mismatch and is flagged for
reconcilia on since goods haven't yet been received.

65. How do you perform GR/IR reconcilia on?

Answer:

 Run GR/IR aging reports or transac on codes (e.g., SAP T-code MB5S)

 Compare PO quan es and values with GR and IR entries

 Inves gate discrepancies such as over-receipts, under-invoicing, or ming differences

 Adjust entries or follow up with procurement/AP teams

66. What are common reasons for GR/IR mismatches?

Answer:

 Invoice not received or posted

 Goods receipt posted in wrong quan ty or value

 Incorrect pricing on PO or invoice

 Par al deliveries/invoicing

 Timing differences at month-end or year-end

67. What is the impact of an unreconciled GR/IR account on financials?

Answer:

 Overstated inventory if GR is posted but no invoice

 Understated liabili es if IR is posted without GR

 Can lead to audit issues and misrepresenta on of working capital

68. What ERP reports or T-codes are used for GR/IR reconcilia on?

Answer:

 SAP:

o MB5S – List of GR/IR Balances

o MR11 – Write-off GR/IR balances

o FBL3N – G/L Account Line Items

o FAGLL03 – G/L Account Line-Item Display (New GL)

 Other ERPs: Use equivalent GR/IR clearing account reports or subledger aging reports.

69. What is MR11 in SAP?

Answer:
MR11 is a transac on code in SAP used to analyse and write-off open GR/IR balances. It helps in clearing mismatches that
are not expected to be resolved (e.g., vendor not sending invoice for small quan ty differences).

70. How do you handle aging GR/IR items that are several months old?

Answer:

 Inves gate with procurement or AP to confirm if goods were returned or if invoice is expected

 Follow up with vendor for pending invoices

 Write off immaterial balances using MR11

 Escalate or make adjustments a er approvals if the balance is significant

71. What is the difference between the AP Subledger and the General Ledger?

Answer:
The AP Subledger contains detailed transac ons for individual vendors (invoices, payments, credit memos), while the GL
holds summarized balances posted from the subledger. The reconcilia on ensures the AP control account in the GL matches
the total of vendor balances in the subledger.

72. Why is AP SL to GL reconcilia on important?

Answer:

 Ensures accuracy of financial records

 Iden fies missing or incorrect pos ngs

 Supports audit compliance

 Validates that AP balances in the financial statements match the suppor ng detail
73. How o en should AP to GL reconcilia on be performed?

Answer:
Typically done monthly, especially during period-end closing, but may also be done weekly in high-volume environments.

74. What are the common reasons for mismatches between AP Subledger and GL?

Answer:

 Manual journal entries posted directly to the AP GL account

 Timing differences (cutoff issues)

 Failed or reversed pos ngs

 Suspense or incorrect GL codes

 Currency transla on issues

75. What steps are involved in reconciling AP Subledger to GL?

Answer:

1. Extract vendor trial balance or AP aging from subledger

2. Extract GL account balance (AP control account)

3. Compare totals and iden fy variances

4. Inves gate unmatched entries

5. Pass adjus ng journal entries if required

6. Document and obtain approvals

76. What tools or reports help with AP SL to GL reconcilia on in ERP systems?

Answer:
SAP:

 FBL1N (Vendor Line-Item Display)

 FAGLL03 or FS10N (GL Account Display)

 S_ALR_87012082 (Vendor Balances)

Oracle:

 Payables Trial Balance Report

 AP to GL Reconcilia on Report

 GL Account Analysis Report

NetSuite / QuickBooks / Others:

 AP Aging Summary

 GL Detail Report

 Trial Balance

77. What controls should be in place for effec ve reconcilia on?

Answer:

 Restrict manual pos ngs to control accounts

 Timely and periodic reconcilia ons

 Segrega on of du es

 Approval workflows for adjustments

 Documented reconcilia on checklist

78. What is a suspense account and how is it handled during reconcilia on?

Answer:
A suspense account temporarily holds transac ons with missing or mismatched details. During reconcilia on, these entries
are inves gated and cleared to the correct accounts with journal entries.
79. What is the impact of unreconciled AP balances?

Answer:

 Financial misstatements

 Vendor payment disputes

 Audit excep ons

 Compliance issues

 Delayed closings

80. How would you handle an unreconciled balance that you cannot trace?

Answer:

 Escalate the issue to the finance controller or AP manager

 Review historical data and audit trails

 Use clearing accounts if appropriate

 Consider materiality and pass adjus ng entries a er approval

 Document everything for audit purposes

81. What is Travel and Expense (T&E) management?

Answer:
T&E management refers to the process of tracking, reviewing, approving, and reimbursing employee expenses incurred
during business travel or for work-related purposes. It includes flights, hotels, meals, taxis, mileage, and other allowable
costs.

82. What are common components of a T&E policy?

Answer:

 Eligible travel and entertainment expenses

 Daily limits or per diems

 Receipt submission requirements

 Approval workflow

 Non-reimbursable items

 Timelines for expense submission

 Preferred vendors (airlines, hotels)

83. What tools or systems are used for T&E management?

Answer:

 SAP Concur

 Zoho Expense

 Expensify

 Coupa

 Oracle Expense

 Workday Expense
These tools automate T&E submission, approval, and integra on with the ERP system.

84. What are the typical steps in the T&E process?

Answer:

1. Pre-approval of travel request (op onal)

2. Employee incurs expenses during travel

3. Submits expense report with receipts

4. Manager reviews and approves

5. Finance reviews policy compliance

6. Reimbursement is processed

85. How do you ensure compliance with the company’s T&E policy?

Answer:

 Automated system flags policy viola ons

 Manual audit of expense reports

 Mandatory fields and receipt a achments

 Regular policy training for employees

 Random or risk-based sampling

86. What is some common T&E frauds or viola ons?

Answer:

 Falsified or duplicate receipts

 Personal expenses claimed as business expenses

 Inflated mileage or ps

 Split transac ons to stay under approval limits

 Submi ng old expenses past the due date

87. What types of expenses are usually not reimbursed?

Answer:

 Alcohol (in some companies)

 Personal entertainment

 Spouse or family travel costs

 Traffic fines or parking ckets

 Unapproved upgrades (e.g., business class flights)

88. What is per diem, and how is it used?

Answer:
A per diem is a fixed daily allowance for expenses like meals and incidental costs. Instead of submi ng actual receipts,
employees receive a set amount per travel day based on loca on.

89. What accoun ng entries are generated in T&E processing?

Answer:
Example journal entry for reimbursable expenses:

Debit: Travel Expense A/C

Debit: Meals & Entertainment A/C

Credit: Employee Payable (Liability) A/C

Upon payment:

Debit: Employee Payable A/C

Credit: Bank / Cash A/C

90. How do you handle foreign currency expenses in T&E?

Answer:

 Use the exchange rate from the date of transac on or corporate rate

 T&E systems auto-convert currency at me of entry

 Reconcile with credit card statements if corporate cards are used

 Post currency exchange gains/losses if applicable

91. What is the purpose of the AP month-end close process?

Answer:
To ensure that all accounts payable transac ons (invoices, credit notes, accruals, payments) are properly recorded for the
month, enabling accurate financial repor ng and compliance with accoun ng standards.

92. What are the typical steps in the AP month-end close process?

Answer:

1. Post all approved invoices and credit memos

2. Match open GR/IR items

3. Review and post accruals for unreceived invoices

4. Reconcile AP subledger with GL

5. Close AP module in ERP

6. Generate and review AP aging reports

7. Submit required close documenta on

93. How do you handle invoices not received by month-end?

Answer:
Create accrual journal entries based on PO details or goods received. This ensures expenses are matched with the correct
accoun ng period.
94. What reports are used during AP month-end close?

Answer:

 AP Aging Report

 GR/IR Reconcilia on Report

 Accrual Lis ng Report

 Open Invoice Report

 Vendor Reconcilia on Report

 GL Detail Report

95. How do you ensure AP subledger matches with the GL at month-end?

Answer:

 Reconcile AP subledger balances with the AP control account in the general ledger

 Inves gate any variances (e.g., direct GL pos ngs, currency issues)

 Post necessary adjus ng entries to resolve mismatches

96. What are accruals, and why are they important in AP close?

Answer:
Accruals represent expenses incurred but not yet invoiced or recorded. In AP, accruals ensure expenses are recorded in the
correct accoun ng period, following the matching principle.

97. What are common challenges faced during AP month-end close?

Answer:

 Delayed invoice approvals

 Missing or incomplete data

 Unmatched PO/invoice/receipt (3-way match issues)

 Currency conversion differences

 High volume of transac ons and ght deadlines

98. How do you priori ze tasks during a ght month-end closing schedule?

Answer:

 Start with high-value or high-risk vendors

 Complete recurring entries early

 Use checklists and automa on tools

 Communicate deadlines with approvers and stakeholders

 Perform parallel processing wherever possible

99. What ERP tools or T-codes are used for AP month-end closing?

Answer:
SAP:

 FBL1N – Vendor Line Items

 MB5S – GR/IR Account

 MR11 – GR/IR Write-off

 FB60 / MIRO – Invoice Entry

 FAGLL03 / FS10N – GL Reports

Oracle:

 Payables Trial Balance

 AP to GL Reconcilia on Report

 AP Aging and Invoice Registers

100. What controls and documenta on are required for AP month-end close?

Answer:

 Close checklist

 Sign-off approvals

 Reconcilia on reports

 Accrual calcula ons

 Manual journal entries with backup

 Aging and variance analysis reports

 Procure To Pay Month End Close Checklist

S. No. Process Area Activity Department

1 Purchase Requisition Review and close old/open PRs not converted to POs Procurement
2 Purchase Order Close fully received or cancelled POs Procurement
3 Purchase Order Review pending PO approvals Procurement
4 Purchase Order Run open PO report and reconcile PO commitments AP
5 Goods Receipt Post all outstanding goods receipts or service entries AP
6 Goods Receipt Match GR/SE with POs (2-way / 3-way match) AP
7 Goods Receipt Review and clear old open GR/IR balances AP
8 Invoice Processing Post all approved invoices and credit notes AP
9 Invoice Processing Resolve exceptions (blocked invoices, holds, mismatches) AP
10 Invoice Processing Accrue for unreceived invoices for goods/services received AP
11 Vendor Reconciliation Reconcile vendor statements for key vendors AP
12 Vendor Reconciliation Investigate and resolve vendor discrepancies AP
13 Subledger Reconciliation Reconcile AP subledger with AP GL account AP
14 Subledger Reconciliation Post adjustments for subledger-GL mismatches AP
15 Payment Processing Process and post final payments of the month AP
16 Payment Processing Reconcile payment clearing and bank accounts AP
17 Accruals & Journals Book accruals for pending invoices and reverse prior accruals AP
18 Accruals & Journals Document all manual journal entries with backup AP
19 Open Reports Generate AP Aging, Accrual, Open PO, and GR/IR reports AP
20 AP MEC Reports Submit month-end reports and checklist sign-off to Finance Controller AP