Is inventory decremented automatically? If yes, when?

[Will]

We have inventory tracking set up for several products.

During the day, as people order items, we capture payments, and ship them out, we're not seeing the inventory quantities decrease.

At what point in the process is this supposed to happen:

1. When customer puts it in their cart?
2. When customer submits the order?
3. When we capture payment?
4. When we ship the item?

Right now, it's not doing it at any of these points. We have to manually update the number each morning. I assumed it would be automatically decrementing the inventory numbers as people purchased the items -- at what point, I'm not sure.

Thanks.

[nickc]

In my testing, stock decrements when I capture payment and increments when a paid order is cancelled.

[AbleMods]

You control inventory increase/descrease via the individual Order Status codes. Each Order Status code allows you to decide whether inventory is subtracted (sold), added (cancelled) or nothing is done.