There's an "On Hold" checkbox on the order screen, right next to Order Date

My understanding is that checking that box puts the entire customer on hold?

No, just that order.

If you put a customer on hold in AR, their orders are on hold.  But you can put an Order on hold without affecting the Customer status.

By checking that box to put it on hold, it won't have an impact on our inventory and the customer's AR?

Correct.  Try it - in your live data or sample data:  Check Location Details quantity on Sales Order for an item, then enter an Order for that item and check again:  Quantity on Sales Order has been updated.  Now put that order on hold and go back to Location Details:  Quantity on Sales Order is back where you started.  Note that the Location Details screen does not refresh automatically; you have to scroll to the next item and back again to see the new values.

Thanks I'll have my CSR test it out next week!