Family balances fall into two very different groups:

• Late but paying: a family that is always a few weeks behind but always catches up. This needs a conversation and possibly a payment plan.
• Stopped paying: a family whose balance keeps rolling into older buckets with little or no payment. This needs action quickly, under a written enrollment and payment policy.

When a balance is unlikely to be collected, the program records an allowance for doubtful accounts or writes the balance off. Either way, it becomes bad debt expense on the P&L.