What happens to all Cardholder accounts associated with a Managing Account at 90 days past due?

What happens to all Cardholder accounts associated with a Managing Account at 90 days past due?

• A. They are reopened automatically
• B. They remain active but flagged
• C. Automatically suspended
• D. Require additional documentation for extensions

Answer: (C)

When Cardholder accounts associated with a Managing Account reach 90 days past due, they are automatically suspended. This action is taken to mitigate financial risk and encourage timely payment. Suspending the accounts prevents further transactions, which helps protect both the government and the vendors from potential payment issues. Automatic suspension acts as a built-in control mechanism to ensure compliance with the guidelines governing purchase card usage. By suspending accounts at this specific point in time, the managing account leadership can focus on resolving overdue payments without the risk of additional charges being incurred during the period of late payment. Other options do not align with established processes for handling overdue accounts. Simply reopening accounts, leaving them active but flagged, or requiring additional documentation for extensions would not address the immediate issues of overdue payments and the associated risks effectively.

When Cardholder accounts associated with a Managing Account reach 90 days past due, they are automatically suspended. This action is taken to mitigate financial risk and encourage timely payment. Suspending the accounts prevents further transactions, which helps protect both the government and the vendors from potential payment issues.

Automatic suspension acts as a built-in control mechanism to ensure compliance with the guidelines governing purchase card usage. By suspending accounts at this specific point in time, the managing account leadership can focus on resolving overdue payments without the risk of additional charges being incurred during the period of late payment.

Other options do not align with established processes for handling overdue accounts. Simply reopening accounts, leaving them active but flagged, or requiring additional documentation for extensions would not address the immediate issues of overdue payments and the associated risks effectively.