To cancel a sales order or place it on hold, you can use the Amend allocations option in the Sales order module.
NOTE:
You can't cancel or hold items that have already been despatched. To correct this, follow the steps on how to reverse an incorrectly despatched sales order article.
Cause
Resolution
Select Sales orders and select the order you require then press Amend allocations.
Select Off Order then select Cancel Order or Held as required.