Hi @Keith908,
Welcome to the community.
Do not cancel the reservation. Each host cancelation is penalized by the system. You may see the full penalties here https://www.airbnb.com/help/article/990
Payment collection is done by Airbnb. Depending on some factors, they may be given an option for a payment plan that allows them to pay in two parts - partially during the booking process and on a scheduled date. This is collected 12-14 days before check-in. If the second payment fails and the guest is unable to pay it within the additional period given to them, the reservation will be canceled and your cancellation policy will be applied.
You may read the full payment plan details in this article https://www.airbnb.com/help/article/2143
Short-term bookings or those no more than 27 days are fully paid before they check-in
Hope this helps.
Warm regards.