Physical negative inventory functionality is mainly used for issuing the stock for insufficient inventory. If Physical inventory checkbox is selected then system will allow to issue an item though stock is not available into inventory.
Path: Inventory Management > Setup > Inventory > Item Model Group
Below is example how to issues stock if there is insufficient inventory.
- You can see the below item for which On Hand inventory is not available though I want sale these stock.
- Create the sales order and enter item, quantity, Unit cost and confirm the sales order.
- Post the Packing slip to sell or issue the stock.
- Check the On hand inventory after posting Packing slip. You can check On Hand Quantity is showing negative.
These functionality helps to issue stock through sales order, Production order, adjustment journal though stock is not available or insufficient.