Accounting Recruitment: How Pre-Employment Tests Can Help
Ken Crowell
Ken Crowell
Few roles carry as much responsibility as accounting positions because they oversee the entire company’s finances. Making sure your accounting team is staffed with right-skilled candidates is crucial for maintaining financial accuracy and compliance.
However, it can be challenging to identify qualified candidates in today’s competitive job market. Effective accounting staff need to have the hard skills related to their various tasks. They also must have well-tuned soft skills for communicating and collaborating with other departments. It’s a rare combination that may be difficult to find.
This infographic shines a spotlight on pre-employment tests and how they can identify skill gaps in accounting applicants. Empower yourself to create a team ready for today’s challenges.
Jump to a Section:
- What is a Pre-Employment Accounting Test?
- Types of Pre-Employment Accounting Tests
- Accounting Skills Gap: Fast Facts
- How to Use a Pre-Employment Accounting Test for Hiring
“Hiring the wrong accountant is like building a house on quicksand—it may look fine initially, but eventually, the cracks will show. Skills tests help you avoid those cracks by identifying solid foundations in your candidates.”
Ken Crowell – EmployTest
What is a Pre-Employment Accounting Test?
A pre-employment accounting test is an assessment tool for evaluating both the technical proficiency and soft skills of applicants vying for accounting positions. It ensures that they have the essential knowledge and abilities required for the role.
These tests often assess applicants’ understanding of key accounting principles such as GAAP (Generally Accepted Accounting Principles), financial reporting standards, and other fundamental concepts. Mastery of these principles is crucial for ensuring regulatory compliance, accuracy in financial reporting, and informed decision-making within the organization.
On the technical side, these tests also evaluate the hard skills you look for when handling numerical tasks. For example, they might measure proficiency in Microsoft Excel, a tool critical for accurate financial calculations, data analysis, and effective data management
Soft skills, equally important, are evaluated through aspects like communication abilities and emotional intelligence for speaking with colleagues and clients. They might also test problem-solving skills related to financial discrepancies.
Types of Pre-Employment Accounting Tests
The test types are as diverse as the roles they aim to fill within your accounting team.
Entry-level pre-employment accounting tests
These are the tests for entry-level accounting positions which evaluate candidates’ knowledge and skills related to basic accounting principles and practices.
Typing and data entry skills test
Typing is inescapable in accounting, from data entry to writing reports. A typing test measures the speed and accuracy at which an applicant types paragraphs.
Data entry is another critical skill in accounting. Tests often get differentiated by the type of data, alpha or numeric. Alpha tests use simulated customer information, while the numeric tests rely on numbers only.
EmployTest’s Typing and Data Entry Tests are accurate and easy-to-use measurements for these entry-level skills.
Basic accounting skills test
This test covers topics a company would often have an accounting role, including:
- Accountant knowledge: Understanding credits and debits, depreciation methods, inventory costing methods, basic math, and more
- Bookkeeper knowledge: Proficiency in balance sheet classification, annual report creation, filing methods, and calculation of account totals
- Business documents: Familiarity with the details of official documentation
- Credit and debits: Mastery of account balancing essentials
- Payroll: Knowledge of various tax forms and payroll calculations
Microsoft Excel skills test
Microsoft Excel and its alternatives are critical tools in accounting. Advanced accounting software often relies on spreadsheets imported from Excel, making it essential to test applicants’ familiarity with the tool. Here’s what you can expect from an Excel assessment test at various skill levels.
- Beginner Excel test: Evaluates basic editing and formatting knowledge, such as creating workbooks, formatting text, and arranging spreadsheet layouts.
- Intermediate Excel test: Assesses skills in pivot table creation, conditional formatting, and margin adjustments, along with beginner-level tasks.
- Advanced Excel test: Tests abilities in editing pivot tables, data validation, and advanced customization, including creating charts and graphs.
Mid-level and senior-level accounting knowledge skills test
Higher-level accounting positions come with increased responsibilities and distinct challenges. Applicants must be tested for their familiarity with Generally Accepted Accounting Principles (GAAP) and advanced accounting software.
Management and supervisor aptitude tests
Leadership roles require more than just accounting skills. Candidates for these positions need to lead a team of specialists, interact directly with clients and senior colleagues, and make strategic decisions on impactful matters. That’s why applicants should be tested for the following qualities:
- Interpersonal effectiveness
- Performance orientation and drive
- Influence on others
- Problem-solving abilities
- Stress management
- Self-confidence
- Delegation skills
Accounting Skills Gap: Fast Facts
What’s the broader context of the accounting skill gap? Why are companies suddenly in dire need of accountants? Here are the highlights:
1. Aging workforce
The American Institute of Certified Public Accountants (AICPA) is the organization that manages all Certified Public Accountants (CPAs) in the country. They estimate that 75% of the current CPA population will enter retirement age within 15 years. That would be a massive dip in the workforce and people able to train the next generation of accountants.
2. Changing demographics
Fewer young people are choosing accounting as a career, contributing to a shrinking pool of potential candidates in the field. The number of accounting undergraduates and master’s graduates is also decreasing year over year, worsening the talent shortage.
3. Competition for talent
Glassdoor data shows salary ranges in sectors like information technology and finance match and overtake accounting positions at the entry level. The disparity makes these fields more attractive for talent.
4. Licensing difficulty
Accounting is not an easy profession, as evidenced by the passing rates of the CPA exam, a requirement for licensure. Following a sharp dip post-2020, the average pass rate has hovered around 50%.
Accounting Test for New Hires: Evaluating Core Competencies
Hiring new accounting staff can be a gamble without the right tools to assess their capabilities. An accounting test for new hires ensures candidates meet the role’s demands by focusing on key competencies, including:
1. Numerical Aptitude
Accounting roles require a solid grasp of numerical concepts. Tests evaluate candidates’ ability to perform basic and advanced calculations, interpret financial data, and identify errors. This ensures they can handle daily tasks like reconciling accounts, preparing reports, and managing budgets accurately.
2. Technical Skills
Modern accounting is heavily reliant on software like Microsoft Excel, QuickBooks, and enterprise resource planning (ERP) systems. Testing candidates’ technical proficiency ensures they can navigate spreadsheets, create financial models, and generate automated reports. For instance:
- Excel Assessments: Include tasks like using formulas, creating pivot tables, and analyzing data.
- ERP System Tests: Evaluate familiarity with tools like SAP or Oracle.
3. Problem-Solving Abilities
Accounting professionals often encounter discrepancies, missing data, or compliance issues. Problem-solving scenarios in pre-employment tests help gauge how candidates approach and resolve such challenges.
For example, a question might simulate an out-of-balance ledger and ask candidates to identify and correct the error.
4. Attention to Detail
Accuracy is non-negotiable in accounting. Tests may include tasks like reconciling a mock bank statement or spotting errors in financial documents to evaluate a candidate’s precision and focus.
5. Soft Skills Assessment
Beyond numbers, accounting roles demand effective communication and teamwork.
Tests can include written prompts to assess how well candidates explain financial concepts or hypothetical scenarios to evaluate their collaboration and negotiation skills.
Test for Accounting Positions: Tailored Assessments by Role
Accounting roles vary widely in complexity and responsibility. A generic assessment might miss the mark, but a test for accounting positions tailored to specific job requirements ensures you find the right match.
1. Accounts Payable/Receivable Clerk
These roles involve managing invoices, processing payments, and reconciling accounts. A tailored test might include:
- Invoice Processing Scenarios: Evaluate how accurately and quickly candidates process mock invoices.
- Reconciliation Tasks: Ask candidates to reconcile a sample ledger with missing or incorrect entries.
- Basic Excel Skills: Test familiarity with functions like VLOOKUP, filtering, and sorting data.
2. Payroll Specialist
Payroll roles require knowledge of tax laws, compliance regulations, and payroll software. Tests for this position can cover:
- Tax Calculation Scenarios: Ensure candidates understand deductions, withholdings, and employer contributions.
- Software Proficiency: Assess familiarity with popular payroll tools like ADP or Paychex.
- Compliance Knowledge: Test understanding of labor laws and reporting requirements.
3. Senior Accountant
For senior-level positions, tests should focus on strategic and technical expertise, such as:
- GAAP Knowledge: Include scenario-based questions about applying GAAP principles to financial statements.
- Advanced Excel and Financial Analysis: Evaluate skills in creating dynamic reports, financial forecasting, and budget analysis.
- Audit Preparation Tasks: Assess how candidates prepare for internal or external audits, including documentation and compliance checks.
4. Accounting Manager
Leadership positions demand a mix of technical knowledge and managerial skills. Tailored tests might include:
- Scenario-Based Leadership Questions: Assess how candidates would handle team conflicts or mentor junior staff.
- Strategic Decision-Making: Test abilities in financial planning, resource allocation, and risk assessment.
- Interpersonal Skills: Evaluate communication skills through role-playing exercises or written prompts.
5. Financial Analyst
For roles involving data-driven decision-making, tailored assessments may include:
Scenario Planning: Assess how candidates create forecasts based on hypothetical business scenarios.
Data Interpretation Scenarios: Evaluate how candidates analyze and interpret complex datasets.
Presentation Skills: Test the ability to communicate financial insights clearly and effectively.
How to Use a Pre-Employment Accounting Test for Hiring
The threat of the shrinking accounting talent pool calls for more effective hiring strategies. A proven strategy is through the addition of pre-employment tests to the hiring process Here are some tips from the experts:
1. Determine key job competencies
You might think that casting a wider net can help with more applicants, but for specialized accounting roles, a targeted strategy often yields better results. By pinpointing the specific soft and hard skills the role needs, you can tailor your assessment criteria to compare job candidates.
For example, if you’re hiring for a senior accountant position, you might prioritize technical skills, such as proficiency in financial reporting, and soft skills, like effective communication.
2. Define pass score benchmarks
It’s essential to have clear and consistent pass score benchmarks for each test section. Ask your existing accounting team to set realistic expectations. These benchmarks should be based on the specific skills and knowledge required for the role.
Communicate these requirements to applicants in advance so they understand the expectations and can be prepared. For example, if the position is an entry-level accounting clerk, you shouldn’t have unrealistically high benchmarks for accounting knowledge.
3. Assess test results objectively
Test results don’t exist in a vacuum. There may be external factors that can help or harm certain candidates. Remove potential sources of bias by standardizing the scoring process and using clear, consistent criteria for all candidates.
For example, you can use automated scoring systems for technical tests to eliminate human error and subjectivity. Also, you may consider anonymizing testing results during the initial evaluation phase to focus solely on the performance rather than personal characteristics.
4. Use as early screening tools
Accounting tests are the perfect filter at the start of your recruitment funnel. They allow you to quickly establish a baseline for your candidates, preventing your interviewers from being overwhelmed with applicants all at once.
For example, if all your openings need intermediate-level Excel skills, a test for that skill can immediately filter out candidates that don’t meet that requirement.
5. Combine with interviews
Interviewers shouldn’t use the accounting skills tests as a replacement for the traditional interviewing process. Test scores are perfect for revealing hard skills, but there’s always a human element that needs to be checked during the interview.
Through the interview, you can check for qualities that you didn’t test for, like cultural fit, work ethic, and other soft skills. For example, an on-paper expert candidate may have difficulties verbally simplifying ideas for others. If that trait is a dealbreaker for the job, you’ll know during the interview stage.
Crunching Numbers, Not Compromises
Finding the right candidates for accounting roles is more critical than ever in today’s competitive hiring market. You don’t want to hire a candidate that another company rejected because they tested and you didn’t.
Pre-employment tests offer a strategic solution to bridge skill gaps and ensure candidates have that essential combination of technical know-how and soft skills.
This precision lets HR professionals effectively assess candidates, reduce the likelihood of a bad hire, and build a strong foundation for long-term success.
If you’re tired of the hiring frustrations, whether in accounting or other fields, consider adding EmployTest to your hiring process!
Transform your recruitment process today.
