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We are working on integrating our ERP system with a Magento store. To this point, we have been developing a REST API connection to the store which is working fine. The goal is to be able to take orders from the Magento store, create them in the ERP system, and then update the store as the order is processed by our normal business processes.

Is it possible to update the order status directly from a back end admin connection via the REST API so that the order state is reflected correctly to the customer, or will we need to write an integration that lives on the server to move the order through the various states?

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Please have a look at these endpoints https://devdocs.magento.com/swagger/index.html#!/salesOrderManagementV1

to Cancel an order

post /V1/orders/{id}/cancel

to Hold an order

post /V1/orders/{id}/hold

to unHold an order

post /V1/orders/{id}/unhold

in case you want to change the order status from Pending to Processing, you have two options

  1. use standard Magento logic:

    a. when you create an invoice/shipment to a placed order, the status will be changed automatically to "processing"

    b. use this endpoint to add a comment with changing the status (I suggest to use this way)

post /V1/orders/{id}/comments

  1. Create your own endpoint

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