Hello @Christopher1773
Has this person cancelled their stay with you? Whatever you do don't cancel FOR them - let them do it their end and depending on your cancellation policy they will see how much they get back. Any cleaning cost is automatically refunded of course.
Airbnb will contact you to ask you if you accept the cancellation but bear in mind that it is Airbnb who handle the payment side. Have you been paid yet? If not do not refund until that happens as the money is not yet in your bank account.
Depending on the reason for the cancellation, some guests will be covered for a change in plans/sickness etc either through their travel insurance or via their credit card company.
If the cancellation is far out and doesn't leave you unable to find another booking at short notice then it's generous of you to accept this cancellation. Some hosts explain to their cancelling guests that if they can rebook then they will refund all or a percentage of the stay.
All the best
Joëlle