Another option is to set a clip shape on the object:
Draw your object.
Create a shape that overlaps all of your object except the parts you want to cut out.
Make sure that the clip shape is arranged above the object to be clipped. (The clip tool chooses the topmost object to use as the clip shape.)
Select both your object and the clip shape, and then select Object → Clip → Set from the menu.
In the illustration above, the middle image shows the object to be clipped (green rounded rectangle) and the clip shape (translucent square with a hole cut in it, created using Path → Difference from the square and the circle in the image on the left), while the image on the right shows the resulting clipped shape.
You can also use the same method to clip more complex objects, including groups and bitmap images.