Top 30 Payments and Cash Management Interview Questions and Answers in 2023

Found a job that interests you? Maybe you even have an appointment for an interview. Congratulation on the job well done. The job interview is a great opportunity – for both sides. With specific questions, the employer finds out if the person sitting across from them fits the profile. And vice versa. We prepared the best payments and cash management interview questions and answers to help you present yourself in the best light.

1. What Are Payments And Cash Management?

Payments and cash management are in charge of all measures of short-term financial management in the company. This management is in charge of all tasks and measures a company takes to secure liquidity and achieve efficiency in liquidity management. Cash management goes beyond pure financial administration. It involves active, goal-oriented control of liquidity to ensure and maintain the solvency of a company.

2. What Are The Objectives Of Payments And Cash Management?

The main task is the smooth processing of payment transactions based on the credit lines granted by the individual banks and the short-term investment of excess liquidity. Payments and cash management support companies at all stages. Some of them are planning, management, disposition, and control of short-term financial and liquidity positions. Information modules control the exchange of payment transaction data, the display of current account balances (also sorted by value date), and dispositions to debit accounts, selecting the payment type and currency for international transfers.

3. List The Benefits Of Payments And Cash Management

If there is a solid infrastructure, payments and cash management offer many benefits:

  • Payment transactions continuously provide data on cash flow and payments the company makes itself.
  • The bank account management process provides instant information about the bank accounts. It shows which are superfluous accounts and whether the company needs new accounts.
  • The processing of account statements shows externally initiated cash flow, incoming payments, and direct debits in favor of third parties.
  • The systemic processing of incoming invoices provides immediate information on the accumulated short-term liabilities.
  • The automated invoicing of the outgoing invoices allows drawing an immediate conclusion about the balances of the incoming payments.

The sum of this information ultimately means that the open balances in the accounts are manually settled or transferred in cash management.

4. What Are The Requirements For Successful Payments And Cash Management?

The company must create an environment where cash management shifts from the bank to the company. The necessary stable but flexible IT infrastructure forms the core. Management information systems provide the supporting software.

However, since the funds are not only shifted back and forth within the company, the companies also need a bank. First, there is the creation of IT infrastructure. This process is harmonized and connected with the bank required for payment transactions. In the next step, the integration of branches into the cash management system and the previous bank details are dissolved.

5. What Is Cash Pooling?

Cash pooling takes place in large corporations that consist of several subsidiaries. The aim is to achieve an intra-group liquidity balance. The parent company manages this through two measures: on the one hand, it withdraws excess liquidity from the subsidiaries, and on the other hand, it covers liquidity bottlenecks with loans.

6. What Are The Benefits Of Cash Pooling?

A well-structured and consistently planned cash pooling offers companies and their treasury departments many advantages. If the company concentrates liquidity in one place only, this creates more transparency for the finance departments. Managing counterparty risks is better and there are reduced interest costs. Because the parent company can usually negotiate better credit terms with the banks, the subsidiaries can in turn finance themselves more cheaply through the parent company.

7. Which Are The Biggest Challenges In Payments And Cash Management?

Successful entrepreneurs regularly check their own invoicing and payment processes and invest in cash management. They make adjustments where necessary to be prepared for the challenges of payment transactions. Key challenges are:

  • Technological change. Technological development does not stop at payment transactions. Companies must implement new technologies and standards in good time.
  • Optimization of processes and interfaces. Modern accounting software solutions and standardized interfaces make payment transactions more efficient and secure.
  • Security. New threat scenarios also require adapted security precautions in payment transactions.
  • Changing customer needs. New distribution channels, and in particular, e-commerce must be developed. This includes online shops or new payment solutions.
  • Liquidity management. Needs-based cash management creates transparency about the available liquidity and ensures that we are always willing to pay.

8. How Can Payments And Cash Management Protect Online Payment Transactions?

Cybercriminals are getting bolder. By using deceptive emails or malware, they try to get access to data to trigger fraudulent payments. That is why I:

  • Never save login data such as contract number and password.
  • Never enter your contract number and password in online shops.
  • Enter the e-banking URL manually in the browser each time.
  • Log out of e-banking after use.
  • When recording payments in e-banking, release the payments via a collective signature.

9. What Is A Checking Account?

A checking account is a current account. A checking account helps in carrying out daily payment transactions such as transfers, standing orders, and incoming salaries. For example, while pay packets used to be common in the past, today’s wage and salary payments are usually processed via a checking account. A checking account replaces cash transactions to a large extent with the book money processing of incoming and outgoing payments.

10. Explain Cash Management Systems

The cash management systems represent an electronic data processing technical service. It is integrated within the framework of the electronic banking offer of the banks. On the one hand, cash management systems provide data on the liquidity stocks in a company’s bank accounts. On the other hand, the customer receives information about the money, foreign exchange, and capital markets. The combination of these two pieces of information with the company’s internal data forms the basis for the payments and cash management’s decision.

11. Give Some Examples Of Minimizing Costs And Risks

The cash holding costs are to be minimized by reducing the safety stocks of liquid funds, which can then be allocated to an interest-bearing investment or used to repay short-term liabilities. Next, by reducing the transaction cash amounts, the short-term financing costs can be reduced in addition to reducing the cash holding costs. On the one hand, the interest expense for unused credit lines is reduced. On the other hand, short-term liabilities can be repaid from cash on hand. Then, profitability can also be increased by reducing transaction costs, sometimes also referred to as transfer costs. These are expenses that are incurred with every deposit and withdrawal. These include fees, commissions, and opportunity costs, especially for international payment transactions, due to the delayed availability of deposits.

12. What Is Liquidity Planning?

Liquidity planning is the mental disposition of future liquid funds. The precise forecast of all future deposits and payments for a specific time or period is a prerequisite for an overview of a company’s liquidity situation. Liquidity planning is part of financial planning and is connected with short-term financial planning. Liquidity planning covers a planning horizon of up to one year. It can be divided into the daily liquidity status and the liquidity plan in the narrower sense. In the case of the latter, the planned liquidity is shown on a weekly, monthly, or quarterly basis.

13. Which Forecasting Methods Are Used To Forecast Customer Payment Habits?

In the case of the subjective/heuristic methods, the prognosis results purely from experience and intuition. There is no use of mathematical-statistical methods. The extrapolating methods transfer past values ​​to the future with the help of mathematical-statistical functions. The third group of causal processes uses logical cause-effect relationships in their prognosis efforts. In doing so, future characteristics of the inflow and outflow of payments are derived from the past and current development of one or more influencing factors.

14. When Should Surplus Cash Be Invested?

In making a short-term investment decision, the payments and cash management must consider several determining factors. These are:

  • Profitability: The benchmark for this is the net yield of the individual forms of investment. Deduction of the transaction and information costs comes from the gross income.
  • Security: The security of investment is evaluated based on the creditworthiness of the debtor and the ability to liquidate it at any time.
  • Interest rate risk: Only forms of investment with a fixed interest rate and low volatility 25 are suitable for the short-term investment of surplus funds.

15. Which Are The Alternatives For Short-Term Investments?

Short-term investments in the national and international money markets have several alternatives. The most important ones are

  • Cash until further notice or Cash on Demand
  • Time deposits with domestic banks
  • Time deposit investments with foreign banks
  • Money market paper or DM commercial paper
  • Money Market Funds
  • Fixed-interest capital market securities with short residual terms

16. How Do You Make The Choice Of Means Of Payment Or Payment Systems?

In this case, cash management has the task of weighing up the processing modalities, clearing methods, valuation habits and costs of the individual banking systems against each other. In cross-border payment transactions, in particular, there is great potential for savings. That is because these are characterized by long clearing paths.

Possible means of payment are bank transfer, direct debit, and cheque. Transfers can be processed using electronic payment transactions, either using paperless data medium exchange or by the use of standardized data records (SWIFT). In addition, there is a remote data transmission system for large cross-border payments.

17. What Is Currency Transaction Risk?

Currency transaction risk as a term is often mixed with the more common term exchange rate risk. This is the risk that foreign exchange has to be bought or sold at a different rate than the expected rate at a known date in the future. This can have negative (of course also positive) effects on the company’s profitability and planned liquidity. Avoiding this exchange rate risk affecting liquidity is the main task of short-term currency management.

18. List Risk-Avoiding, Risk-Compensating, And Risk-Reducing Measures

The risk-avoiding measures include the choice of invoicing currency, hedging clauses, or currency clauses, as well as parallel financing and currency swaps.

Risk -compensating measures are forward exchange transactions, financial hedging, leading and lagging, factoring, exchange rate insurance, and international leasing.

Risk-reducing measures include advance payments, down payments and partial payments, currency option rights, and currency baskets.

19.  What Mistakes Should Payments And Cash Management Avoid?

The complexity of cash management leaves a lot of room for error. Although usually, a few measures can iron errors out, this costs time, nerves, and, above all, money. You can avoid these typical mistakes from the start:

  • Calculating just one or two situations: Many situations are typical for companies, e.g. reduced revenue, unpredictable costs, strong currency fluctuations, the loss of a supplier, etc. Therefore, it makes sense to be prepared for as many scenarios as possible to find solutions quickly.
  • Recognizing situations too late: The first signs of a financial bottleneck appear, but it does not look that bad yet. There is no reaction to this change. Here is the mistake. The longer you wait to take action, the less time you have to make up the deficit.
  • Do not let the surplus work for you: You should invest part of your surplus in a call money account so that you can access it at any time. Investing the remaining money sensibly, for example, in stocks or money market funds, is taking advantage of the opportunity for higher returns.

20. How Can You Optimize Your Payments And Cash Management?

For payments and cash management to carry out their tasks optimally and for good liquidity management to be guaranteed, a company should use suitable software. Several different cash management systems make it almost impossible to keep track. The classic Excel spreadsheet is often used for cash flow management in a small company. However, typographical or formula errors can quickly creep in here. if you want to take the first step towards successful cash management you need to have an advanced cash management system as a basis.

As the responsible person for cash management, create a comprehensive liquidity plan. That plan offers solutions for various business scenarios. This allows you to react quickly if the first signs of a financial bottleneck appear. Actively control payment transactions and identify superfluous cost items, such as rarely used accounts. Do not just keep the surplus in a business account, but split it between different investments. The call money account is suitable for short-term reserves, and the fixed-term deposit accounts for long-term.

21. What Tips Do You Use In Payments And Cash Planning?

I plan realistically – for slow revenue growth and higher costs to avoid a cash squeeze. Then, I consider a financial buffer so that financiers can see that the company is prepared and ready for bottlenecks. I check the financial plan. Try to avoid calculation errors as much as possible. I make planning comprehensible. After all, the financial plan must contain the appropriate explanations in addition to the figures. I also take advice. Especially at the beginning, I seek support. Numerous funding programs offer consultations.

22. How Can A Business Avoid Negative Interest?

Many businesses affected by negative interest rates are considering switching banks. They turn to a bank that does not charge penalty interest. If you have a large amount of money in your account, it may make more sense to split the money between different accounts in different banks. Usually, the savings deposit at each bank should not exceed the exemption amount for charging penalty interest. An attractive alternative is to open a time deposit or call a money account. When concluding a contract for a fixed-term deposit account, conditions are agreed upon that apply over the entire term. The interest rate of a call money account is variable.

23. What Tasks Do You Expect To Take?

As part of my job, I think my main tasks will be:

  • Weekly preparation of a liquidity plan with reporting to the next higher level or management
  • Planning and, if necessary, execution of outgoing cash flows
  • Management of various bank accounts and foreign currencies
  • Market observation and evaluation of trends in the financial market, but also legal provisions and requirements
  • Further development of existing processes and tools
  • Contact person for internal (accounting, head of treasury or management) and external (banks, savings banks) interested parties

24. What Motivates You?

I am motivated to engage with data. Give me a spreadsheet and questions, and I am excited to find out what is behind the numbers. In my current position, I prepare the monthly analysis report on sales. The data from these reports will help you figure out how the company is charting its next steps and setting sales targets for the months ahead. Providing this vital information is motivating.

25. What Is Your Weakness?

I have attention to detail. Sometimes this can lead to a tendency toward perfectionism. In the past, I have found myself triple-checking each item in a spreadsheet. And carefully proofread emails to ensure I have been communicating what I am trying to convey concisely. Or playing around with the layout of a presentation to make sure it is perfect. Since then, I have learned to successfully budget my time and assess which tasks require that level and precision and which do not. I will not spend time on tasks that do not benefit from it.

26. Describe Your Working Style

I am reliable. I have rarely missed a day of work and come early and stay late to get important work done. This is what gets results. This reliability also extends to my collaboration. For example, on my most recent project, a teammate was having trouble completing his assignment for the team. I stayed late every day that week to help him not only complete his assignment, but ours as well exceeding the originally estimated turnaround time for the project.

27. Are You Good At Working With Other People?

I am a patient listener and a clear communicator, which is essential for a successful salesperson. I get frequent calls from clients with complaints and concerns. My ability to patiently listen and empathize makes them feel valued. I then work with them to come to a solution. I believe my communication skills are why I won the best manager at my previous company three years in a row.

28. How Do You Deal With Stress?

Pressure is beneficial to me. The work pressure can be positive, like a bunch of assignments or an upcoming deadline. That helps me stay motivated and productive. Of course, there are times when too much pressure can lead to stress. This skill is very adept at balancing multiple projects and meeting deadlines. Being able to do this keeps me from feeling overly stressed. For example, I once had three big projects due in the same week. That was a lot of pressure and nervousness. However, having created a schedule detailing how I would break down each project into small tasks, I finished all three projects ahead of time and avoided unnecessary stress.

29. What Challenges Do You Expect To Face?

I know your organization values ​​setting high goals for every team, so I look forward to being part of a team that aims high. I have a lot of experience in teamwork and working on big projects with tight deadlines. My ability to work well in a team and manage my time makes me a valuable team member in that kind of environment.

30. Tell Me About Your Experience

I have commercial training as a bank clerk. I studied business administration with a focus on finance and control. I have several years of professional experience behind me. I worked in the field of finance and banking. I possess IT knowledge of payment systems such as Star Money, UC embanking, Multi  Cash, and MS Office applications (especially Excel).


An invitation to an interview means that you have aroused interest with your application. Now you are off to the next step. You will have a personal conversation with HR and need to be convincing. The person that is doing the interview will examine your motivation, way of working, and personality more intensively. That is why it is good to prepare yourself with these usual interview questions in advance of the appointment. Have a good luck!

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