Every item within an order has 4 item statuses: New, Processing, Cancelled and Backordered. The notes below explain how to use each status.
All items are marked as "New" when the order is placed. This is the default status for all items in a newly placed order.
Many clients will mark all the items within an order as "Processing" when the orders come in. When you hit "Save/Send" the shopper will be sent an email notification of the status change to their order. Moving items to "Processing" will give you a some time to fulfill the order.
Items should be marked as "Backordered" when you cannot ship them out in a reasonable time.
Items marked "Backordered" will be shipped UNLESS you remove it from the shipment.
You must uncheck the backordered item if you don't want that product to be shipped with the other items.
Click "Update" to update the order totals.
Items should be marked "Cancelled" when either you cannot ship that item or the shopper has asked you to remove the item from the order. When you mark an item as cancelled, the order totals will be updated.