If you need to cancel an order, you can do it quite easily from the order itself. Cancelling an order reverses any inventory movement/payment that was done, and also prevents the order from being edited any further.
You can find the Cancel Order button at the top of the toolbar in the order. This works for sales quotes, sales orders, work orders, and purchase orders:
If you need to re-open the order, it’s also the same button; an already cancelled order will have that button show as Re-open Order instead of Cancel Order. The order will now be available for editing and will be in the same status as before the cancellation. You can manually click Unfulfill or Unpay to reverse inventory movement/payment without cancelling the order entirely.
Cancelled orders don’t show up in reports / order lists. If you want to re-open a previously cancelled order, see how to find a cancelled order.