Cancelling an order in QuoteMachine requires two steps.
First, set the order status to 'cancelled'. (to create custom order statuses, see here)
Next, delete the order.
Now, the order is canceled. On your order screen, you can use the filters to show you all of the cancelled orders.
Deleting the order will update your inventory in lightspeed if any of these items had been reserved. To understand more on how orders interact with your light speed inventory click here.