If you want to hire the best finance talent, you need to start with the best finance interview questions. The ideal finance interview includes a mix of questions that gauge the candidate’s understanding of the field, technical skills, and soft skills that will help them succeed in the role.
Your technical questions should be tailored to the specific position and its level within the company. For example, while it might not be feasible to ask entry-level candidates to explain the ins and outs of deferred tax liability, you should still ask them questions that assess their grasp of basic accounting and finance concepts like budgeting processes and financial statements. The higher up the command chain you go, the more nuanced you can get with your technical finance interview questions.
Use behavioral interview questions to shed light on how a candidate would react to actual scenarios they’d face in the role. While you can train for specific technical skills a great candidate is lacking, there are certain qualities, like critical thinking, that you want them to walk in with the first day on the job. Behavioral questions are a great way to get a feel for these characteristics.
Finally, incorporate more general interview questions that will help you gauge culture fit and soft skills. Leadership or the ability to work on a team, for example, may play an important role in a prospective candidate’s likelihood of success within your organization. You’ll also want to identify whether they have a firm understanding of the company and its position in the market.
Finance Interview Questions to Ask Candidates
#1: What do you feel is the single most important document to gauge the financial health of a company?
This question will quickly tell you whether a candidate is comfortable talking through basic financial concepts. There are several different answers that could be considered correct, but the candidate should be able to clearly justify their reasoning for whichever document they pick.
For example, they might say they prefer the cash flow statement because cash is the lifeblood on which the company operates, the balance sheet because assets are what propel cash flow, or the income statement because it provides the insight needed to make decisions about the company’s future.
#2: What’s the biggest financial hurdle for a company like ours in today’s market?
You want a candidate with a solid understanding of your field and its inherent financial challenges. If their prior experience hasn’t provided this knowledge, you want to see that they’ve done their homework to get up to speed on the market and the industry’s current events.
Look for talent to cite things like upcoming regulatory changes in the field, tax issues that affect the company, new technology that challenges the status quo, or the fight to control costs to compete with overseas labor—whatever’s relevant for your organization. The list of potential good answers is extensive, but the best candidates will be able to discuss challenges that are both specific and timely for your company.
#3: Define and explain the importance of GAAP?
When you’re hiring for an accounting role in a publicly traded company, a thorough understanding of Generally Accepted Accounting Principles, or GAAP, is a must. These principles govern how public companies record and report financial information. If your accountant sidesteps GAAP, it could lead to big financial problems for the organization down the road.
Your candidate should be able to comfortably explain GAAP principles like consistency, continuity, and periodicity. If you live in a state with additional guidelines for financial reporting in addition to GAAP, it’s worthwhile to ask about their knowledge of those, as well.
#4: What’s the difference between cash and accrual accounting? Which method do you think is most suitable for our business?
When hiring someone in an accounting role, you need to feel confident that they not only have a firm handle on GAAP, but that they can translate their accounting knowledge into recommendations that are beneficial for the business. To assess their abilities in this area, ask them for their input on this basic accounting topic.
Though their answer may not have much bearing on which method you actually use, it should give you an idea of the method they’re most comfortable with and their high-level approach to measuring the organization’s financial health.
For example, they might say that since you’re a medium-sized business, they prefer cash accounting because it keeps things simple and lets you know how much cash you have on hand at a quick glance. Or they might say that since you’re an international organization with offices and payers all over the world, they prefer an accrual method because it gives you a more realistic picture of your actual income and expenses (and, it’s worthwhile to note, this is the required method for US businesses with revenue over $5 million).
#5: Let’s say our company was considering a merger with [competitor name]. How would you decide if this was a good idea?
This is a finance interview question geared toward higher-level positions like CFOs whose job is to steer the larger financial trajectory of the organization. Mergers can be great for achieving growth—but they’re not always in a company’s best interest.
A winning candidate should be able to list the factors they’d consider when making a recommendation on a merger. They should share how they’d gather and communicate the relevant information to the appropriate stakeholders so the right decision can be made. This is their chance to demonstrate their ability to conduct a thorough cost-benefit analysis and to communicate with key members of leadership on important organizational issues.
#6: Tell me about a financial challenge you faced recently and describe how you overcame it
We’d argue that every interview should include at least one question where a candidate can talk through how they dealt with a problem. Being able to successfully navigate challenging situations is an important part of any professional role, whether in finance or a related field.
There are any number of challenges a candidate might pick to talk about, but you should look for their answer to demonstrate critical thinking, solid decision-making skills and poise under pressure. These qualities indicate an independent worker who will be able to find solutions rather than merely identifying problems. Look for the candidate to tell a story with a beginning, middle and end, which will help you get a feel of their thought process when confronted with a challenge.
#7: Describe a situation where a company could show positive cash flow but still be in financial trouble
There are plenty of situations where dollar figures on paper don’t tell a company’s whole story. You want finance staffers who can read past what’s on the page to glean a complete and accurate picture of where the organization stands financially.
A qualified candidate should have an answer that demonstrates their understanding of the various ways money flows within an organization. For example, a company that’s selling off large amounts of inventory while delaying payables might show positive cash flow, but the picture behind the scenes is likely problematic.
#8: Where do you see yourself in five years?
Today’s professional switches between jobs more frequently than any other generation in modern times, especially in the first ten years of their career. So, depending on the job and seniority level, it may not be feasible to expect them to stay with your organization for the next five years. Still, you want to see a level of commitment that tells you they’re going to bring the utmost value to your organization while they’re employed with you.
We like this question because it not only gives candidates a chance to share their professional ambitions, but it will help you gauge their understanding of what advancement looks like in your field. Do they have a firm idea of what they’ll need to do to achieve success in the role? Do they have realistic expectations about how and when they might advance? Discussing these things in the interview helps make sure you’re on the same page about the progression of raises and promotions, which are always a good thing to set expectations for up front.
Add the Right Finance Professional to Your Team With 4 Corner Resources
Finding top finance and accounting talent is time consuming. If you’re not in a finance role yourself, it can be a challenge to zero in on the applicants who have the right skills to get the job done. And yet, these staff members serve a critical role in the success of your business, so hiring the right people is of utmost importance.
Let 4 Corner Resources spearhead your finance and accounting hiring. We’ll source and screen talent from a vast pool of active and passive candidates, developing customized finance interview questions that are tailored to the specific responsibilities of the job and the goals you’re looking for the person to accomplish. We’re skilled at identifying candidates with the right mix of accuracy, integrity and technical skills to succeed in your financial role.
Get in touch today to start your search.