How Magento 2 Order Fulfillment Works: The Full Workflow<\/h2>\n\n\n\n
Before diving into individual steps, it helps to understand how Magento 2 thinks about orders at a system level \u2014 because this is where most store owners get confused.<\/p>\n\n\n\n
Magento separates two concepts that sound similar but mean different things:<\/p>\n\n\n\n
Order State<\/strong> is a system-level condition that Magento uses internally to determine what actions are available on an order. You cannot create or customize states \u2014 they are fixed by Magento.<\/p>\n\n\n\n Order Status<\/strong> is the label that maps to a state and is visible to both admins and customers. This is what you can customize, rename, and extend to match your specific workflow.<\/p>\n\n\n\n Understanding this distinction matters because when something goes wrong with an order \u2014 when it’s stuck, when a customer sees an unexpected label, when an action isn’t available \u2014 the cause almost always traces back to a mismatch between state and status.<\/p>\n\n\n\n The complete order fulfillment workflow for Magento stores looks like this:<\/p>\n\n\n\n Order Placed \u2192 Pending \u2192 Payment Authorized \u2192 Invoice Created \u2192 Shipment Generated \u2192 Complete<\/strong><\/p>\n\n\n\n With two possible branches:<\/p>\n\n\n\n Each of these stages involves specific actions, some automatic and some manual, which we’ll cover in detail below.<\/p>\n\n\n\n When a customer completes checkout, Magento immediately creates an order record and assigns it the Pending<\/strong> status. Payment has not yet been confirmed \u2014 the order exists in the system, but no money has moved and no fulfillment action has been triggered.<\/p>\n\n\n\n To view new orders, navigate to Sales \u2192 Orders<\/strong>. You’ll land on the Order Grid \u2014 the central dashboard for all order management. At the Pending stage, three actions are available to you:<\/p>\n\n\n\n If you need to find a specific pending order quickly, use the Filters<\/strong> panel and filter by Status \u2192 Pending<\/strong>.<\/p>\n\n\n\n Inside the order view page, you’ll see the key sections that follow every order through fulfillment: order and account information, billing and shipping addresses, payment and shipping method, items ordered, order total, and comments history.<\/p>\n\n\n\n What to watch for:<\/strong> If your store allows guest checkout, the order will not be attached to a customer account. Make sure your order confirmation email is reliably configured for guest orders \u2014 it is often the only communication channel you have with that customer.<\/p>\n\n\n\n Once the customer’s payment is submitted, Magento communicates with your payment gateway to authorize the transaction. Authorization confirms that funds are available but does not yet capture or transfer them. The order moves into the Processing<\/strong> state.<\/p>\n\n\n\n This is an important distinction for store owners using offline payment methods<\/strong> such as bank transfer or check\/money order. With these methods, Magento cannot automatically confirm payment \u2014 authorization is manual, which means the order will remain in Pending until you take action.<\/p>\n\n\n\n Once payment is authorized, the next step is creating an invoice. This is the action that formally captures payment \u2014 it commits the funds from the customer’s account and creates an official financial record of the transaction.<\/p>\n\n\n\n For most online payment methods (credit card, PayPal, etc.), Magento can generate the invoice automatically upon payment authorization. For offline methods, you must create the invoice manually from the order view page<\/strong> by clicking the Invoice<\/strong> button in the top menu and submitting it.<\/p>\n\n\n\n If you process a significant number of orders or use multiple payment methods, manual invoicing quickly becomes a bottleneck. The Auto Invoice & Shipment Extension<\/a> automates this step based on rules you define \u2014 so invoices are generated immediately after payment confirmation without any admin intervention.<\/p>\n\n\n\n Once an invoice is created, the order cannot be edited. Make sure all order details are correct before invoicing.<\/p>\n\n\n\n With the invoice created, you can now generate a shipment. This is done from the order view page (Sales \u2192 Orders<\/strong>) by clicking Ship<\/strong>. The shipment record contains the delivery address, shipping method, and \u2014 critically \u2014 the carrier and tracking number.<\/p>\n\n\n\n Magento will send a shipment confirmation email to the customer at this stage, which should include the tracking number so they can monitor their delivery independently.<\/p>\n\n\n\n You can also edit the quantity to ship at this stage, which is useful for stores that fulfill orders partially \u2014 for example, when one item in an order is in stock and ready to ship while another is on backorder.<\/p>\n\n\n\n What to watch for:<\/strong> Not including a tracking number, or not sending the shipment notification email is the single biggest driver of “where is my order?” support tickets. One of our clients reported that implementing order tracking on their store reduced support requests by approximately 40%<\/strong>.<\/p>\n\n\n\n The Magento 2 Order Status & Shipping Tracking Pro Extension<\/a> keeps customers on your store by displaying real-time tracking information directly in their account \u2014 no redirects, no third-party sites.<\/p>\n\n\n\n Once a shipment is generated and submitted, Magento automatically updates the order status to Complete<\/strong>. This indicates that both payment and fulfillment have been finalized.<\/p>\n\n\n\n No further fulfillment actions are required at this stage, though you can still add internal comments to the order record and choose whether to notify the customer by email.<\/p>\n\n\n\n Returns and refunds are an inevitable part of running an online store. Refunds in Magento 2 are handled through credit memos<\/strong> \u2014 documents that adjust the financial record of a transaction and return funds to the customer.<\/p>\n\n\n\n There are two types of credit memos, and understanding the difference is important:<\/p>\n\n\n\n Using the wrong type \u2014 for example, issuing an offline credit memo for an online payment \u2014 will create a reconciliation problem where your Magento records show a refund that was never actually processed through the payment gateway.<\/p>\n\n\n\n If you want more flexibility beyond Magento’s default refund options, the Plumrocket Store Credit & Refund Extension<\/a> allows you to issue refunds as store credit rather than returning funds to the original payment method. <\/p>\n\n\n\n For a complete walkthrough of creating credit memos in Magento 2, including partial refunds and common edge cases, see our guide: How to Create Magento 2 Credit Memos & Refunds<\/a>.<\/p>\n\n\n\n As covered earlier, state is system-level, and status is what you and your customers see. Here is how the default statuses map to their corresponding states:<\/p>\n\n\n\n![\"How](\"https:\/\/plumrocket.com\/learn\/wp-content\/uploads\/2026\/04\/magento-order-fulfillment-1.1-1.png\")
<\/figure>\n\n\n\nStep-by-Step: Each Stage of the Magento 2 Fulfillment Process<\/h2>\n\n\n\n
Stage 1 \u2014 Order Placement & Pending Status<\/span><\/h3>\n\n\n\n
![\"Order](\"https:\/\/plumrocket.com\/learn\/wp-content\/uploads\/2026\/04\/magento-order-fulfillment-5-1.png\")
<\/figure>\n\n\n\nStage 2 \u2014 Payment Authorization<\/span><\/h3>\n\n\n\n
Stage 3 \u2014 Invoice Creation<\/span><\/h3>\n\n\n\n
![\"Invoice](\"https:\/\/plumrocket.com\/learn\/wp-content\/uploads\/2026\/04\/magento-order-fulfillment-2.png\")
<\/figure>\n\n\n\nStage 4 \u2014 Shipment Generation<\/span><\/h3>\n\n\n\n
![\"Shipment](\"https:\/\/plumrocket.com\/learn\/wp-content\/uploads\/2026\/04\/magento-order-fulfillment-3-1.png\")
<\/figure>\n\n\n\nStage 5 \u2014 Order Completion<\/span><\/h3>\n\n\n\n
Stage 6 \u2014 Credit Memos & Refunds<\/span><\/h3>\n\n\n\n
Order Status vs. Order State: A Practical Reference<\/h2>\n\n\n\n
![\"When](\"https:\/\/plumrocket.com\/learn\/wp-content\/uploads\/2026\/04\/magento-order-fulfillment-4-1.png\")
<\/figure>\n\n\n\n