WooCommerce glossary
What are excluded statuses in WooCommerce Analytics?
Excluded statuses are the order statuses that WooCommerce Analytics ignores, so orders with those statuses don't count in any report.
How WooCommerce uses them
You set them under Analytics › Settings › Excluded statuses. Tick a status and every Analytics report (Revenue, Orders, Products, Categories, Coupons and the rest) leaves out orders with that status. The same settings page has Actionable statuses (the statuses that show as needing attention) and the Date type used for reports.
Defaults have changed between WooCommerce versions, so check your own settings rather than assuming. Custom statuses added by plugins, such as "Shipped" or "Awaiting pickup", need checking too: depending on your settings they may or may not be counted.
A worked example
Say in May your store had 200 orders: 170 Completed, 20 Processing, 6 Failed and 4 Cancelled. If Failed and Cancelled are excluded, Analytics counts 190 orders. If you also excluded Processing, it would count only 170, and your May sales would look lower until those orders were marked Completed.
Why it matters
This setting decides what "sales" means in your store's reports. If Analytics and the Orders list disagree, excluded statuses are one of the first things to check. Any tool that reads through Analytics, Askshelf included, follows the same setting. The guide on why Analytics numbers don't match your orders walks through this and other causes, and WooCommerce sales reports explains the reports it affects. See also WooCommerce Analytics.