Allow Negative Inventory means this product can be sold even though the inventory for it is less than or equal to zero. For example, you physically have the product, but it has not yet been entered as received in the system. This functionality can be used with three types of transactions:
On Sale
On Sale refers to Make Sale transactions.
On Sales Request
On Sales Request refers to Make Sale Requests transactions.
On Fulfillment
On Fulfillment refers to Fulfillment Requests.
Check the transaction types to allow negative inventory.
If none are checked, this product cannot be sold if it is not listed in your inventory.
Note
These options are available when Is Inventoried is checked.