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Melissa,
There isn't a one-size-fits-all answer for this. Each organization operates differently and depending upon the level of service an organization has, different features may or may not be available to them.
I would recommend that you open a support ticket and discuss your needs one of our support specialists.
Warmly,
Michelle
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For example, I have a cat that needs foster and it needs medical treatment. Do I use 'Treatment' status, and make a custom group for needs foster, or the other way around? What is the benefit downside of either status vs custom group?