First off let me explain what each option means. When we’re talking about writing down something, say receivables, what we mean is that you create an allowance account with an opposite sign onto the balance sheet so that it decreases the receivable account. Now as to writing balances off means that they’re taken off from the balance sheet completely. Note that the opposite entry for both is an expense entry on the income statement. It’s just all about what’s left or not left onto the balance sheet. 

As to whether to write down or off, it’s judgmental, but there are conditions to consider.

Is it just bad payment discipline and irregular payments you’re already aware of or is it all of a sudden really bad situation your customer is in and is it possible they’re going into bankruptcy? It’s one or the other, which defines how bad the situation, really is with your balance.

At the end of the day it comes down to a question how doubtful you see the collection to be. If it’s more probable that you’ll get paid than not, it’s write down and not write off you should do. Note that the client is still obliged to pay regardless what you decide to do. It’s more of how fair and true you want to keep your accounts really. There’s no real reason to keep a balance that’s likely not to be collected on the balance sheet, is there?