example of problem solving skills in accounting

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Accountants as Problem Solvers

August 01, 2020

By: Linda McCann DBA, CMA, CPA ; David Horn CPA ; Jennifer Dosch CMA

example of problem solving skills in accounting

Managers often complain that accounting graduates aren’t prepared for today’s business environment. The complexity of our global economy and the increasing influence of, and reliance on, technology leads to practitioners and instructors questioning if undergraduate accounting programs focus on the right curriculum to prepare students for careers.

One soft skill that can help prepare accounting students for their careers is problem solving. Management accountants need to be able to work cross-functionally to solve problems and provide meaningful analyses. Many colleges, universities, and accrediting bodies in academia incorporate strategic goals requiring curriculum that facilitates problem-solving skills.

As instructors, we teach technical accounting skills by demonstrating and providing practice with accounting concepts and structured problems, which we assess via homework and exams. Teaching soft skills, such as unstructured problem solving, poses greater challenges that are more difficult to incorporate into the curriculum. How can students learn and approach unstructured problem solving?

A SLOW-THINKING APPROACH

Recent scientific discoveries into the brain reveal that humans employ fast and slow thinking to solve problems. The brain especially prefers making decisions and solving problems quickly based on recognized patterns, visual and verbal cues, prior knowledge, routines, familiar preferences, prejudices, and emotions.

In contrast, decision making and problem solving often require slow thinking to digest new information, hypothesize alternatives, employ quantitative mathematical and statistical analysis, overtly recognize and break free from cognitive biases, challenge preconceived notions, synthesize ideas, and create new knowledge. To support this kind of slow, rational thinking, accountants can learn a methodical process for problem solving (see Table 1).

Many common business models—such as Six Sigma, A3 Lean, and Appreciative Inquiry—and the Association of American Colleges and Universities value problem solving, and critical-thinking grading rubrics describe specific steps for rational (i.e., slow thinking) problem solving. Business students, however, learn and apply these models in various courses, typically with no thread that ties them specifically to the accounting profession. Students learn bits and pieces of rational thinking throughout their undergraduate coursework, but instructors often don’t teach a common framework to apply these skills in a relevant and value-added way (see “Survey of Practitioners”).

To help address this issue, we developed a problem-solving rubric for accounting students (see Table 2). The three of us are faculty members from Metropolitan State University in Minneapolis/St. Paul, Minn., and represent three different parts of the curriculum (auditing, business taxation, and management accounting), so it was important that it could be used across the entire accounting program.

The rubric assesses learning in an organized way, providing a common framework (criteria) for students to consistently approach problem solving. The criteria include problem identification, analysis, and communication of results. It guides students through a series of problem-solving steps using terms and vocabulary specific to the accounting profession. The rubric also reminds us, as instructors, to create a learning environment where problem solving can occur (see “Setting the Tone”).

STEP 1: PROBLEM IDENTIFICATION

The iterative and looping nature of problem solving confounds inexperienced accountants. Where does one begin? Students tell us using a rubric provides a starting point.

To implement the rubric, we assign students projects with unclear goals, incomplete information, and more than one possible solution. Assignment topics vary. It could have students develop a cost-benefit analysis between adding employees or adopting Lean manufacturing techniques, analyze tax outcomes of business decisions, create a risk assessment and audit response for a fictitious client, or some other accounting-related issue.

Students begin by developing one or several hypotheses as to the nature of the problem. To generate ideas, we assist students in their brainstorming discussions. The rubric leads students to consider the environment, strategy, unexpected observations, overall importance, and risk assessment. At this stage, the identified problem may change, but the original hypothesized problem gives direction for next steps. Upon completing the assignment, we assess students on how they identified the problem.

Metropolitan State University’s business taxation course used the rubric in a case study that involves assessing the implication of the Wayfair v. South Dakota U.S. Supreme Court decision on a company’s sales tax collection. Prior to Wayfair , companies operated under a physical presence nexus established in Quill v. North Dakota . The Quill decision required companies to have a physical presence in a taxing jurisdiction in order to require collection and remittance of sales taxes on transactions.

In Wayfair , the U.S. Supreme Court overturned Quill in favor of an economic nexus standard, where companies only needed to have a certain level of economic activity. For example, in South Dakota, the threshold economic activity is 200 transactions or $100,000 in sales. The change from Quill to Wayfair was a major development in how companies operate and collect sales tax. It required companies to assess all jurisdictions in which they operate and evaluate how the change in the nexus standards impact its operations.

To apply this rubric to the change, students learn about a fictitious company that sells inventory to multiple states and collects and remits sales tax under the Quill physical presence nexus standard. We give students a subledger with all sales data for the given year. The rubric leads students to ask about implications of the Wayfair decision on the company, how the ruling impacts the company’s strategic objectives, and risks to the company because of the change in the law. Using the rubric, students are guided to discover the issue at hand, which is whether the company will have a significant number of new sales tax jurisdictions requiring collections and remittance from its customers.

Students tell us that without the rubric, they often feel like they have no road map at the beginning of a project or case study; identifying the problem seems too big and undefined to tackle. Many students initially resist engaging with unstructured problem-solving assignments because they differ from past assignments. Similar to what one might find in cross-functional teams opposed to change, students show their displeasure with crossed arms and distant body language.

Many college courses still rely on testing facts and use formulas and calculations, an approach that doesn’t put the student in the decision-making role but is familiar to them. With a rubric, students see smaller doable steps, where the assignment is heading, and how they can move forward and loop backward, when necessary. The rubric breaks down the initial intimidation students feel with unstructured problems.

STEP 2: ANALYSIS

Next, the rubric guides students through analyzing the problem using accounting-specific skills they’ve acquired in each course. For example, students consider tax laws, financial reporting and audit principles, or cost accounting techniques.

Continuing the sales and use tax example, at this stage, students apply the rubric to perform a complete analysis, enabling them to form a conclusion to communicate. What are the relevant facts to determine Wayfair ’s impact? What facts are irrelevant? What primary and secondary tax authority is needed to conduct research? Are there alternatives and exceptions to applying Wayfair ? Have all states adopted an economic nexus standard? Have all states adopted South Dakota’s transactional thresholds? What’s the quantitative impact to the company? Are there financial accounting implications to the Wayfair decision? What’s the scope of the necessary research, and are there limitations, constraints, and so on? Through the rubric, students formulate and answer questions and perform analysis to solve the problem at hand.

We assess students on their ability to gather and identify relevant facts, research any applicable rules and laws, assess alternatives, and perform any needed qualitative and quantitative analyses. At this stage, students apply theories and best practices learned in specific course fields, such as management accounting, taxation, and auditing.

To encourage elaboration, the rubric uses words such as curious, skeptical, model, assumption, authoritative, best practices, relevant, and sufficient sources. Like many accountants, students want to get their work done quickly, but problem solving takes time and slow thinking. Thanks to the rubric, more students turned in papers with greater depth, less “cut and paste,” and more relevant supporting details.

As in the real world, students often discover their original hypothesis or identified problem is incorrect, incomplete, or irrelevant. They confront the iterative nature of problem solving as they work through the analysis stage and build evidence to support their hypothesis. When evidence doesn’t support an identified problem, students go back and redefine their problem, gather new evidence, explore new alternative solutions, and build a case for their conclusion.

STEP 3: COMMUNICATION

Finally, students present their results in a memorandum to a hypothetical manager or audit partner. The memorandum mirrors common styles, such as IFRAC (issues, facts, rules, analysis, and conclusion) and BLUF (bottom line up front). Students state the problem and include the conclusion (i.e., solution) up front along with a summary of relevant facts and assumptions. Supporting documentation presents additional in-depth analysis.

This format familiarizes students with a presentation style that allows management to quickly understand conclusions while also providing more depth to support the up-front conclusion. We expect students to write and present findings in a clear and concise manner as if in a professional accounting setting. The rubric grading criteria helps students solve problems using rational thinking and delivering a memorandum that directly supports management decision making.

In the Wayfair case study, students draft a memorandum to management addressing the implications of the sales tax nexus precedence change. The facts section should discuss the company’s current sales and use tax policies. Students identify the issue as the change from physical presence nexus to economic nexus. The up-front conclusion should identify new jurisdictions from which the company needs to register and collect sales tax and quantify the volume of sales tax it expects to collect. Finally, the analysis provides an in-depth discussion of the change from Quill to Wayfair . Students should discuss how they determined new jurisdictions, limitations, and further required resources for the company.

PREPARING STUDENTS FOR THEIR CAREERS

We use the rubric format for projects or cases at different stages throughout the accounting curriculum. The problem-solving rubric measures student learning and reinforces rational thinking with each assignment. The projects that use the rubric vary in length, depth, and complexity as students move from management accounting to tax and then finally to audit. We find the rubric flexible enough to adapt to an instructor’s needs, yet it provides consistent core steps—identify the problem, analyze, and communicate—to solve problems.

The rubric helps students organize their communication through the memorandum. Setting up a memorandum so the problem and solution appear “up front” highlights mismatches between the problem, evidence, and conclusion. Further, it encourages students to decide—rather than ramble and include information that isn’t relevant. We find students often get to the communication stage and realize that their analysis doesn’t support their conclusion or identified problem. Fortunately, the rubric allows them to loop back and redefine and reanalyze.

By using the same grading criteria in multiple courses, we provide students with a familiar approach to problem solving that turns fast thinking to slow, rational thinking. The process and steps become routine and less daunting for the student. While each step still requires arduous thinking, the approach itself is a recognized pattern for students.

From our point of view as accounting instructors, the rubric helps provide consistent and fair grading. We provide separate points for milestones in problem identification, analysis, and communication, which further encourages students to go through each step of the process. Metropolitan State University plans to expand the use of this rubric in the accounting curriculum. This common framework provides students with a process to identify problems, research and investigate facts, conduct analyses, and communicate results across all accounting disciplines.

This process reinforces the problem-solving skills that students will need in their professional careers. These capabilities will help them perform their roles in today’s strategic, fast-paced business environment. Solving problems is critical for today’s management accountant. Through implementing the rubric, instructors can help students systematically apply a problem-solving process that they can take with them as they move from student to management accountant.

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10 Accounting Problem Solving Skills and How To Improve Them

Discover 10 Accounting Problem Solving skills along with some of the best tips to help you improve these abilities.

Accounting is an important skill for anyone who wants to be financially successful. Without a basic understanding of accounting, it can be difficult to make sound financial decisions. However, even if you have a strong understanding of accounting principles, you may still encounter occasional accounting problems.

When these problems arise, it is important to have strong problem solving skills in order to find a resolution. In this guide, we will discuss some tips for solving accounting problems. We will also provide an overview of some common accounting problems so that you can be prepared in the event that one arises.

Financial Statements

Regulatory filings, revenue projections, account reconciliation, general ledger, business knowledge, problem solving.

Financial statements are important because they provide a snapshot of a company’s financial health. They can be used to make decisions about whether or not to invest in a company, and they can also be used to track a company’s performance over time. Financial statements include the balance sheet, income statement, and cash flow statement.

Payroll is an important skill for accountants because it allows them to process and manage employee compensation and benefits. Payroll processing includes calculating gross wages, deductions, and net wages; preparing payroll tax returns; and managing benefits such as health insurance, retirement plans, and paid time off.

Accountants who can effectively manage payroll can help businesses save time and money. They can also help businesses comply with federal and state tax laws and regulations.

Regulatory filings are important because they are required by law. Companies must file certain documents with government agencies in order to operate. These filings include tax returns, annual reports, and shareholder communications. Failure to file these documents can result in penalties or even the closure of a company.

Regulatory filings are important because they provide transparency. By law, companies must file certain documents with government agencies. These filings are public, which means that anyone can access them. This transparency allows investors and other stakeholders to see how a company is operating.

Revenue projections are important for businesses because they help businesses plan for future income. Revenue projections can be used to determine how much money a business will need to operate and grow. Revenue projections can also be used to help businesses raise money from investors.

Revenue projections are important because they help businesses plan for future income. Revenue projections can be used to determine how much money a business will need to operate and grow. Revenue projections can also be used to help businesses raise money from investors.

Account reconciliation is the process of ensuring that all transactions in a company’s books are accurate. This process is important because it helps ensure that the company’s financial statements are accurate and can be relied upon by investors, creditors and other stakeholders.

Account reconciliation involves comparing the company’s books with the records kept by its banks, vendors and other parties with whom it does business. If there are any differences, they need to be investigated and resolved. This process can be time-consuming, but it is important to ensure that the company’s books are accurate.

Compliance is the process of ensuring that you are in compliance with the laws and regulations that apply to your business. It is important for businesses to be compliant because it helps to protect them from penalties and fines. Compliance also helps to build trust with customers and regulators.

To be compliant, businesses need to understand the laws and regulations that apply to them and then take the necessary steps to ensure that they are following the rules. For example, businesses that sell products to consumers need to be aware of the consumer protection laws that apply to them. Businesses that operate in certain industries, such as healthcare, need to be aware of the regulations that apply to them.

General ledger is an important accounting problem solving skill because it is used to track and report financial information for a business. The general ledger is a summary of all of the accounts that make up the financial statements, and it is used to keep track of the money coming in and going out of the business. The general ledger is also used to prepare financial statements, and it is important that the information in the general ledger is accurate and up to date.

Quickbooks is an important skill for anyone in the accounting field. Quickbooks is a software program that helps accountants and business owners keep track of their finances. Quickbooks can help you track invoices, manage payroll, and create financial reports. Quickbooks is a valuable skill because it can save you time and make your job easier.

Business knowledge is important for accounting problem solving because it helps accountants understand the context of the problem they are trying to solve. It also helps them identify the root cause of the problem and develop a solution that will be effective in the real world.

Accounting problem solving often involves looking at a company’s financial statements and trying to identify where the company is spending too much money or where it is making mistakes in its accounting practices. To do this, accountants need to understand the company’s business and the industry in which it operates. They also need to be familiar with the latest accounting standards and best practices.

Problem solving is an important skill for accountants because they often have to solve complex problems. Problem solving requires the ability to identify the problem, gather information, develop a plan and implement the plan. Accountants must be able to think critically and creatively to solve problems.

Problem solving often requires good communication skills. Accountants must be able to explain the problem, gather information and develop a plan with the client. They also need to be able to follow up to make sure the plan is working and to troubleshoot if there are any issues.

How to Improve Your Accounting Problem Solving Skills

1. Understand the basics of accounting If you want to improve your accounting problem solving skills, it is important to have a strong foundation in accounting principles. You should be able to read and understand financial statements, as well as have a working knowledge of payroll, regulatory filings, revenue projections and account reconciliation.

2. Be well-versed in accounting software In order to be an effective problem solver, you need to be well-versed in accounting software. This will allow you to quickly and efficiently find solutions to accounting problems.

3. Stay up-to-date on accounting news and changes It is also important to stay up-to-date on accounting news and changes. This will help you anticipate problems and find solutions more quickly.

4. Be proactive in solving problems When you encounter an accounting problem, it is important to be proactive in solving it. This means taking the time to understand the problem and researching potential solutions.

5. Communicate effectively with your team When you are working on a team, it is important to communicate effectively. This means being clear about what you need from your team members and keeping them updated on your progress.

6. Be organized and efficient When solving accounting problems, it is important to be organized and efficient. This means having a system in place for tracking your progress and keeping your work area tidy.

7. Practice problem solving One of the best ways to improve your accounting problem solving skills is to practice. This can be done by working on practice problems or by taking on small projects in your personal life.

8. Seek out feedback When you are working on solving accounting problems, it is important to seek out feedback. This can be done by asking for feedback from your team members or by seeking out feedback from a mentor.

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good examples of problem solving for job interviews and cover letters

Employers like to hire people who can solve problems and work well under pressure. A job rarely goes 100% according to plan, so hiring managers will be more likely to hire you if you seem like you can handle unexpected challenges while staying calm and logical in your approach.

But how do they measure this?

They’re going to ask you interview questions about these problem solving skills, and they might also look for examples of problem solving on your resume and cover letter. So coming up, I’m going to share a list of examples of problem solving, whether you’re an experienced job seeker or recent graduate.

Then I’ll share sample interview answers to, “Give an example of a time you used logic to solve a problem?”

Examples of Problem Solving Scenarios in the Workplace

Problem Solving Examples for Recent Grads/Entry Level Job Seekers

You can share all of the examples above when you’re asked questions about problem solving in your interview. As you can see, even if you have no professional work experience, it’s possible to think back to problems and unexpected challenges that you faced in your studies and discuss how you solved them.

Interview Answers to “Give an Example of an Occasion When You Used Logic to Solve a Problem”

Now, let’s look at some sample interview answers to, “Give me an example of a time you used logic to solve a problem,” since you’re likely to hear this interview question in all sorts of industries.

Example Answer 1:

At my current job, I recently solved a problem where a client was upset about our software pricing. They had misunderstood the sales representative who explained pricing originally, and when their package renewed for its second month, they called to complain about the invoice. I apologized for the confusion and then spoke to our billing team to see what type of solution we could come up with. We decided that the best course of action was to offer a long-term pricing package that would provide a discount. This not only solved the problem but got the customer to agree to a longer-term contract, which means we’ll keep their business for at least one year now, and they’re happy with the pricing. I feel I got the best possible outcome and the way I chose to solve the problem was effective.

Example Answer 2:

In my last job, I had to do quite a bit of problem solving related to our shift scheduling. We had four people quit within a week and the department was severely understaffed. I coordinated a ramp-up of our hiring efforts, I got approval from the department head to offer bonuses for overtime work, and then I found eight employees who were willing to do overtime this month. I think the key problem solving skills here were taking initiative, communicating clearly, and reacting quickly to solve this problem before it became an even bigger issue.

Example Answer 3:

In my current marketing role, my manager asked me to come up with a solution to our declining social media engagement. I assessed our current strategy and recent results, analyzed what some of our top competitors were doing, and then came up with an exact blueprint we could follow this year to emulate our best competitors but also stand out and develop a unique voice as a brand. I feel this is a good example of using logic to solve a problem because it was based on analysis and observation of competitors, rather than guessing or quickly reacting to the situation without reliable data. I always use logic and data to solve problems when possible. The project turned out to be a success and we increased our social media engagement by an average of 82% by the end of the year.

Answering Questions About Problem Solving with the STAR Method

When you answer interview questions about problem solving scenarios, or if you decide to demonstrate your problem solving skills in a cover letter (which is a good idea any time the job description mention problem solving as a necessary skill), I recommend using the STAR method to tell your story.

STAR stands for:

It’s a simple way of walking the listener or reader through the story in a way that will make sense to them. So before jumping in and talking about the problem that needed solving, make sure to describe the general situation. What job/company were you working at? When was this? Then, you can describe the task at hand and the problem that needed solving. After this, describe the course of action you chose and why. Ideally, show that you evaluated all the information you could given the time you had, and made a decision based on logic and fact.

Finally, describe a positive result you got.

Whether you’re answering interview questions about problem solving or writing a cover letter, you should only choose examples where you got a positive result and successfully solved the issue.

What Are Good Outcomes of Problem Solving?

Whenever you answer interview questions about problem solving or share examples of problem solving in a cover letter, you want to be sure you’re sharing a positive outcome.

Below are good outcomes of problem solving:

Every employer wants to make more money, save money, and save time. If you can assess your problem solving experience and think about how you’ve helped past employers in those three areas, then that’s a great start. That’s where I recommend you begin looking for stories of times you had to solve problems.

Tips to Improve Your Problem Solving Skills

Throughout your career, you’re going to get hired for better jobs and earn more money if you can show employers that you’re a problem solver. So to improve your problem solving skills, I recommend always analyzing a problem and situation before acting. When discussing problem solving with employers, you never want to sound like you rush or make impulsive decisions. They want to see fact-based or data-based decisions when you solve problems. Next, to get better at solving problems, analyze the outcomes of past solutions you came up with. You can recognize what works and what doesn’t. Think about how you can get better at researching and analyzing a situation, but also how you can get better at communicating, deciding the right people in the organization to talk to and “pull in” to help you if needed, etc. Finally, practice staying calm even in stressful situations. Take a few minutes to walk outside if needed. Step away from your phone and computer to clear your head. A work problem is rarely so urgent that you cannot take five minutes to think (with the possible exception of safety problems), and you’ll get better outcomes if you solve problems by acting logically instead of rushing to react in a panic.

You can use all of the ideas above to describe your problem solving skills when asked interview questions about the topic. If you say that you do the things above, employers will be impressed when they assess your problem solving ability.

If you practice the tips above, you’ll be ready to share detailed, impressive stories and problem solving examples that will make hiring managers want to offer you the job. Every employer appreciates a problem solver, whether solving problems is a requirement listed on the job description or not. And you never know which hiring manager or interviewer will ask you about a time you solved a problem, so you should always be ready to discuss this when applying for a job.

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Biron Clark

Biron Clark is a former executive recruiter who has worked individually with hundreds of job seekers, reviewed thousands of resumes and LinkedIn profiles, and recruited for top venture-backed startups and Fortune 500 companies. He has been advising job seekers since 2012 to think differently in their job search and land high-paying, competitive positions.

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Problem Solving in Accounting

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accounting department focusing on problem solving

Problem-solving in accounting is a critical skill that can always be improved upon. Master problem-solver and CFO at Musselman & Hall Contractors LLC, Adam Porter, shares his insight and experience with us in the latest episode of CFO Weekly.

What Makes a Great Problem-solver?

If you know, you know, right? Adam instinctively knew he was a problem-solver when he was younger. Something as simple as going from point A to point B became an opportunity to experiment with which route got him to his destination quicker. And his quest for discovery hasn't stopped.

“If we don’t understand the ‘why’ behind the actions we take, how do we know if we’re really doing the right thing,” Porter said.

To solve is to correct or optimize, and none of us can do that if we don’t first recognize an opportunity to get involved. Problem-solving goes hand in hand with the willingness to roll up your sleeves and get stuck in, take an active role in, and see through the potential outcome. Adam empowers each of his team members to become (and grow as) problem-solvers, by recognizing them and their contributions to identifying and solving issues.

Involving people in the problem-solving process and connecting the dots for them, showing them how they make the business a better organism, is how you create more great problem-solvers and amplify your ability to tackle problems as they appear.

Accounting Problem-solving in Action

Problem-solving is a term that gets thrown around in interviews and on resumes quite a bit. When the time comes, real problem-solvers like Adam approach things in a specific way.

System Upgrades

If you’ve navigated a system change and survived to tell the tale, some would say you have superpowers. Upgrading something like an ERP system is a mammoth task, even for a seasoned team of executives. During a project like this, you’re reviewing and possibly amending every single organizational process.

You’re also required to identify how everything you do during this project starts to affect other areas of the business: finance, accounting, HR, IT and so on.

Adam’s own experience with one such project led him through a GL restructure. At the end of a six-month series of efforts, with the support of a Controller whom he had brought it to, Adam succeeded and was able to present information back to the business, which could be used to inform business decisions.

The domino effect: once more information became available, and it was clear how it related to each portion of the business, the people in charge of those respective portions became more engaged and more curious and more willing to work with that information.

Problem-solving is just one of those skills where nobody needs to formally identify the need for it. It’s the problem-solvers who are constantly on the lookout for opportunities to apply themselves.

The result is that everybody benefits.

The Problem-solving Process in Accounting

Adam’s very first step in his problem-solving process is to absorb as much information from as many sources as he can. Whether it’s listening to the news every day or speaking with different people inside the business, there’s this ongoing effort to find out more, learn about topical challenges that others might be facing, and use that to drive questions internally about further opportunities to solve problems.

It doesn’t necessarily need to reach the state of being a ‘problem’ to receive attention for optimization. You just need to listen and pay attention to where things might be slower, costing more than usual or requiring manual input from too many people.

Once you have this information, you can gather the right people into the room to start looking at that information, gathering more of it from different sources.

One of the key components of fully resolving any issue is to understand the full scope and depth of its current and future impact: What happens if you leave it alone, or if it gets worse, or if it’s completely resolved? Who gets more time in a day when you resolve something? Whose budget gets some breathing room? Can you reduce the amount of manual input that everybody’s required to give?

Finding the Right People to Solve the Problem in Your Accounting Department

So, once you know what the problem is, you need to get the right people in to solve it.

How do you know who that is? The team behind your solution is critical. As a CFO, you have the responsibility of setting your team up for success when they’re working on solving problems. All execs have this responsibility.

In any organization, cross-functional training is the quickest way to widen perspectives when approaching any problems. If your execs are regularly making time to get down to the operational level, and understand how and why things work a certain way, it becomes so much easier to strategically recommend a resolution when one is needed.

Problem-solving isn’t a one-way road.

Solve the Problem, Not the Symptom

How do you know when you’re solving the right thing? So many times, we see something blatantly creating a bottleneck in an operation and we’ll head right toward that point to clear the blockage. Is that really solving the problem, though?

Most times, it isn’t. Once you clear the blockage, if you don’t look a little deeper or follow it upstream, it’s probably going to reappear not long after you put in all that effort.

Adam explains that sometimes, you already know what the real root cause is, of one or more bottlenecks in the business. Sometimes it’s trial and error. Always, though, it requires you to dig deeper, uncover more detail, more links and connections to other parts of the business operation or the stakeholder network.

Adam goes on to say that getting to the root of the issue can also be achieved by just getting the right people in the room with you. Musselman & Hall Contractors does a great job of this, getting executives together at least once weekly, to just help others on the team evaluate elements, ask more questions, different questions, and gain a different perspective on things that can be missed during the daily routine.

Dealing with Resistance

Resistance is natural. Inertia affects every company in the world to some degree. When problem-solving, it’s likely that this will occur too.

You need to follow the process and listen as much as you convey messages. Cultivate the mindset within your business that someone else learning about your job is a positive thing. Take the time to explain that it’s because a fresh pair of eyes and a fresh mind might ask a different question that can enable you to work faster, reduce manual input, take on more responsibility, and actually achieve a promotion.

The right mindset about problem-solving enables it to benefit everyone on the team. No matter who is working on which problem or when, another major benefit to your business is to thoroughly document your procedures and changes thereto. It enriches the context of every issue that gets identified and resolved now and in the future, creating even greater efficiency for you as time passes.

Overcoming resistance is made possible by including and involving the right people, and enabling regular two-way communication with them through the problem-solving process.

For more interviews from the CFO Weekly podcast, check us out on Apple or Spotify or your favorite podcast player.

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Problem Solving for Accountants

by Alan Nelson

This course will help you to develop one of the key skills of the accountant of the future. Learn how to establish the root causes of problems and master a variety of problem-solving techniques to help you develop, propose and implement effective solutions for your organisation.

Look inside, this course will enable you to.

About the course

As the reporting of historical performance is increasingly automated, accountants can add more value by identifying problems in organisations and proposing solutions. This involves a level of creativity that many find scary, but which we can all develop if we make the effort to do so.

This course will help you get better at identifying and solving problems in your organisation. You'll discover how to establish the root causes of problems and how you can use a variety of problem-solving techniques to develop and implement suitable solutions. The course highlights the importance of data analysis and creative thinking as well as deciding who to involve in the process. It will help you to ensure that you propose solutions that achieve the best outcomes for those affected.

Alan Nelson

After studying economics, Alan began his career in accountancy before moving into senior management positions in the book trade. He founded Nelson Croom, the publisher of accountingcpd.net which he has run ever since. He is currently Chair of ICAEW�s Practice Assurance Committee and a member of IFA�s Regulatory Committee.

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Problem Solving Skills & Examples

Updated January 11, 2023

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There are many definitions of problem-solving – but at a basic level, it focuses on the ability to accurately assess a situation and arrive at a positive solution.

Solving problems is an analytical skill that many employers look for when reviewing candidate application forms.

This particular skill isn’t restricted to a single sector, industry or role, though employers in the engineering and legal industries, in particular, tend to look for proficiency.

Consequently, questions about your problem-solving ability are commonplace in interviews.

Strong problem-solving skills can be hugely beneficial for your career. In every sector, problems are inevitable and will arise in one form or another as you go about your day-to-day duties.

When problems do occur, employees are expected to use their initiative and develop suitable solutions to avoid the situation escalating into something more serious.

What Kind of Problems Typically Arise in a Professional Context?

There are many situations where problems could present themselves in the workplace, from a client's concern through to assisting a technical team resolve a website or database error.

The issues that you come across will often vary in complexity, with some situations requiring a simple solution and others demanding more thought and skill to overcome.

Business managers will spend a lot of their time solving problems and consequently require their employees to be creative and intuitive when it comes to addressing them.

Being confident in your approach is really important, and as you learn which processes are most effective to overcome obstacles, so your confidence will grow.

Without suitable processes in place, your solutions may fail or they could even create additional problems.

A good problem-solving process involves four fundamental stages: problem definition , devising alternatives , evaluating alternatives and then implementing the most viable solutions .

Managers are looking for recruits who can be creative and intuitive when it comes to addressing business problems.

How to Improve Problem-Solving Skills

There are several ways you can improve problem-solving skills. It helps to approach each problem through a series of logical steps.

First, identify what the problem is. This requires examining a particular situation to determine what specifically is causing the problem.

Rather than looking at a problematic situation as a whole (for example, a customer is upset), try to break it down and determine the cause of the problem (why is the customer upset?).

The Five Whys (or 5 Whys) technique can be helpful here, which essentially involves asking 'why' five times to determine the root of a problem.

There may be several elements causing the problem or one specific element. Either way, breaking a problem down into smaller parts makes it much easier to solve each of the elements or issues contributing to the problem.

Next, come up with a range of potential solutions. Techniques such as problem tree analysis and mind mapping can help to lay out problem elements and potential solutions.

Some of the potential solutions won't be as effective as others, and that's okay. The goal at this stage is to evaluate each potential solution and determine which one is likely to be the most effective at solving the problem. You may require several different solutions to solve different elements of the problem as a whole.

Once you have decided on a solution, follow a step-by-step plan to implement that solution. Just as breaking down a problem into key elements makes it easier to identify solutions, an action plan with various steps makes it easier to implement those solutions.

What Are Problem-Solving Questions?

Questions about problem-solving will typically arise within a competency -based interview and will require you to demonstrate your particular approach.

Questions about problem-solving can be asked in a range of different ways, but some common examples of problem-solving are:

Why Are Employers Interested in Testing Your Problem-Solving Skills?

Effective problem-solving requires a combination of creative thinking and sound analytical skills . Employers look for hires who can demonstrate each of these skills in the workplace to deliver positive outcomes.

Managers would far rather employ a member of staff who can take action to resolve a problem than someone who doesn't act and relies on someone else to think of a solution. Even if it isn't outlined as a requirement in a job description, many employers will still be evaluating your problem-solving ability throughout the application process.

Effective problem solvers are those who can apply logic and imagination to make sense of the situation and develop a solution that works. Even if it doesn't prove as successful as you had hoped, resilience is important, so you can reassess the situation and try an alternative.

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What Form Do Problem-Solving Questions Take?

If problem-solving skills are an integral part of your role, it is likely that you will have to complete some kind of assessment during the application process. There are a number of forms that a problem-solving question can take, but the majority of them will be scenario-based .

Employers may base problem-solving questions around three main areas:

Past Challenges

Some employers believe that the way you approached a situation in the past is a good indicator of how you will approach a challenging situation in the future. Therefore the best way to understand how someone would respond to a specific scenario is to ask a question such as 'explain an occasion when…’

As the employer wants to assess your problem-solving skills, they may ask you to outline a situation where something went wrong and what happened. This could be an example of a time when you faced something unexpected, or you were approached by a client about a concern.

Situations Specific to the Job

Managers will often relate one or more questions to the role you are applying for. Sometimes this may take the form of a question about what the applicant would do if they had too much or too little work to complete.

These types of questions usually begin with the recruiter asking how you would deal with a specific situation followed by some kind of challenge. For example, how you would deal with a colleague who was relying on you to do all of the work or falling short of a target.

Questions Throughout the Application Process

Although these aren't questions as such, they may be used by some recruiters to see how you handle unexpected changes. This could be rearranging the time of your interview or sending an email without attaching something important. Both of these - even if they are unintentional - could be used as a way to assess how you approach something that is unforeseen.

How to Answer Problem-Solving Questions

If you know that you are likely to face problem-solving questions in the application process, it’s good practice to research the typical questions and scenarios that candidates are presented with.

This will not only increase your confidence but also help you to refine your answers and provide a stronger response.

In this section we provide three examples of common questions and suitable responses:

You have been asked to schedule in a rush project but you cannot complete the piece of work you need to, since you require information from another colleague who is not currently available. How would you deal with the situation?

You are working on a project and halfway through you realise that you have made a significant mistake that may require you to restart the project to resolve it. How would you approach this so you still met the deadline?

How would you deal with a customer who wasn't happy with your service, even though you haven't done anything wrong and it is the customer who has made the mistake?

Tips, Common Mistakes and Further Practice

When it comes to answering questions about problem-solving skills, we recommend the following;

Select a strong example that truly demonstrates your problem-solving ability in a positive manner.

Choose examples that are relevant to the job you are applying for . If you are applying for a project-based position, give an example of how you resolved a problem with a work or academic project.

Be specific with your responses and use an example with enough detail to show how you approach situations and the way you think. Take the time to come up with possible answers and scenarios before the interview .

Make sure the problem is unique . If you have a problem, simply calling someone else to solve it is not impressive. The best answers will show tailored solutions to tasks that may seem mundane.

Make sure the problem is simple . If you have switched from a legal career to an engineering career and your problem is legal in nature, ensure your problem is easy to understand and explain it to your interviewer without using jargon.

Choose a weak or boring problem , or one that reflects you in a negative way.

Generalise your answers with responses such as ‘you consider yourself to be a great problem solver’ or ‘you regularly solve problems’. You need to demonstrate how you solve problems effectively.

Raise any areas of concern by giving examples of negative situations that were a result of your own actions , even if you solved a problem successfully.

No matter how interesting the story that you have to tell is, don’t spend too much time providing too much detail , because the recruiter will soon get bored. Keep your answer short and to the point.

How to Demonstrate Problem-Solving in Your CV or Cover Letter

During your written application and at interview, employers will expect you to evidence your problem-solving skills. In your written application you should demonstrate them via relevant keywords, statements and achievements. If you solved a problem and it had a positive impact on the business – such as improved customer service standards or resource savings – say so on your CV.

If you are invited to an interview try to use the STAR technique to structure your answers. This technique focuses your responses on a Situation, Task, Action and Result. Following this process will help your answers to be focused, concise and strong.

Where problem-solving is a main element of your role, an employer may incorporate a relevant psychometric test and/or an activity to carefully assess your problem-solving skills.

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Problem-Solving Interview Questions and Answers

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Problem-solving in 5 easy steps

Author: ICAEW Insights

Published: 06 Jan 2021

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When it comes to analysing a situation and deciding on a course of action, Bransford and Stein’s IDEAL method can help you tackle even the most stubborn problems

1. Identify

What exactly is the nature of the problem? And is there just one problem, or a number of smaller issues? Have you encountered something similar before that may help you in your approach to this situation? Taking the time to identify the problem clearly will not only help you understand it yourself, but also enable you to communicate it effectively to others where necessary.

Analysing the problem involves thinking about all the various factors that have led to this point, as well as identifying the ideal outcome. What went wrong, when and how? Gather together all the relevant information in order to build up a full picture. Then think about what the solution would look like – what do you ideally want to happen?

The next step is to explore potential solutions. There may be one obvious answer, but many problems benefit from an open-minded, flexible approach and a bit of creative thinking. It may not be just up to you to solve the problem, so involve others and get their ideas and opinions too. Assess the merits and feasibility of each possible solution before deciding on a course of action.

Once you’ve decided on the best solution, it’s time to put it to the test. But before you dive in, take some time to think it through and ensure you’ve considered all the practicalities and possible scenarios. Then draw up a plan of what needs to happen when, and who is responsible. It may be that you need buy-in from others; if so, champion your idea with confidence to make things happen.

5. Look Back

Looking back is about learning from the experience. Did your solution work? If not, you may need to go back and repeat the process to find an alternative. What have you learned – how will you do things differently next time? Make sure you ask for feedback from any others involved too. As with all skills, practice makes perfect, so don’t be afraid to put yourself in new situations and look for opportunities to solve problems.

Professional development is one of four parts of the ACA. Our professional development ladders prepare you to successfully handle different situations that you’ll encounter throughout your career.

Find out more about our professional development ladders

Visit Careers+ for more career development advice. It’s an ideal place to help you start your career in accountancy, or if you’ve already started your journey as an ICAEW CFAB or ACA independent student and are looking for the next step

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COMMENTS

Problem Solving Skills For Accountants
Problem solving skills for accountants are so valuable because businesses are full of problems that need solving – and almost all business problems have
The joys of problem solving
'The requirement for problem-solving skills is part of this transition as, by mining data and analysing trends, accountants are now translating numbers into
Accountants as Problem Solvers
Management accountants need to be able to work cross-functionally to solve problems and provide meaningful analyses. Many colleges, universities
5 Accounting Problem Solving Skills
1. Positive Attitude Skill You should have the positive attitude for solving the accounting problem. · 2. Focus on Your Accounting Problem Skill · 3. Take
10 Accounting Problem Solving Skills and How To Improve Them
Financial Statements · Payroll · Regulatory Filings · Revenue Projections · Account Reconciliation · Compliance · General Ledger · Quickbooks
26 Good Examples of Problem Solving (Interview Answers)
Solving any problems related to money, customer billing, accounting and bookkeeping, etc. Taking initiative when another team member overlooked or missed
Problem Solving in Accounting
The right mindset about problem-solving enables it to benefit everyone on the team. No matter who is working on which problem or when, another
Problem Solving for Accountants
Contents · Combining data analysis and creativity · Involving people in the solution · Selecting the right solution · Choosing and selling your solution
Problem Solving Skills: 3 Examples (Great For A Resume)
Rather than looking at a problematic situation as a whole (for example, a customer is upset), try to break it down and determine the cause of
Problem-solving in 5 easy steps
Problem-solving in 5 easy steps · 1. Identify. What exactly is the nature of the problem? · 2. Define. Analysing the problem involves thinking