In IM Options a user can specify whether negative on-hand balances will or will not be allowed in their system. If the decision is to allow negative balances, Sage 500’s Negative On-Hand report allows users to research and to correct any remaining negative on-hand balances at the end of each business day.
Remember that items using Lot, Serial or Both track method will not allow negative quantity on hand even if the inventory module is set to allow negative quantities on hand. (irrespective of IM Options.)
Also there is only one negative cost tier per inventory item (using Average, Landed, Last, Replacement, or Standard Cost) , except for Standard costed items. Standard costed items use the same tier for positive and negative quantity on hand. The Negative Cost Tier Method is selected in IM Options and all inventory items in a company will use the same negative cost tier method in every warehouse.
In order to switch from Allow Neg Qty On Hand to not to allow it all inventory items must show positive quantity on hand in Stock Status and Inventory Cost reports. The easiest way to accomplish this is to process a physical count batch.