From an accounting perspective, we recommend creating a credit note to cancel an invoice.
You can also consider an invoice to be canceled by marking it with the status “Canceled”.
If the invoice has already been paid, you can register a negative payment by selecting the “Refund” option from the “Payments” tab in the contextual menu located on the right of the page listing the invoices.
Link to this article:http://toolcie.com/en/support/k/how-do-i-cancel-invoice