In the case something goes bad with your receivable balances, some or just one balance, they’re to be written down at least. I say “at least” because one of the options is to also write them off, meaning taking them off the balance sheet entirely. This can be done after they’re written down just as well, but let it be said that writing something down means you consider there’s still some hope whilst writing the balances off means you don’t see any collection there to be made. 

Something I struggle to understand is people’s unwillingness to write balances down if they’ve gone “bad”, i.e. if we doubt we’d be able to collect them. It’s merely an accounting entry, an estimate or judgment we’re making and no real effect comes from it to our balance as it’s still collectable and the client is still obliged to pay it. Yes, since the entry is on one hand adding a negative balance on the balance sheet accounts and on the income statement creating an expense entry, some may see it as a loss in profits. I say that I’d rather see the loss as soon as possible rather than keeping something that’s going to create loss at some point on the balance sheet.

Writing down receivables that are doubtful should be a routine process in ones business. In case of slightest doubt just review the balance and whatever information you can find on the client, it’s payment discipline and so on and make your assessment. Note here that if the client ends up paying, this is a reversal of expense on your income statement so it’s all good from your profit perspective once again.