Availability is calculated by subtracting product quantities associated with unposted transactions. If availability is negative, you have more being required on unposted transactions than you have in inventory and probably need to order more.
Acctivate allows users to sell items into negative quantities based on user permissions. When a user has the ability to Override Scheduled Qty on a sales order, they have the ability to schedule an item into negative availability, as well as invoice an item causing negative on hand quantities. Instead of only considering On Hand quantity, Acctivate will calculate an "Available" quantity, which consists of:
Net Available Quantity = On Hand Qty - Reserved Qty - Scheduled Qty - Backordered Qty - Assembly WIP Qty - Transfer Qty (+ On PO Qty)*
Selling into the negative can occur when you have less quantity available than there is on hand or overriding the scheduled quantity on a sales order. The example below illustrates this concept further:
When this product is placed on a Purchase Order, the On PO quantity will increase, bringing the Available quantity closer to zero. If a receipt is posted against the PO, the On Hand quantity will increase and the On PO quantity will decrease by the amount of product received. The On Hand quantity can go into the negative when a user overrides the Scheduled quantity on a Sales Order and releases the invoice. If the overridden quantity is greater than the current On Hand quantity, the product will show negative on hand. In the example above, the user would need to invoice at least 751 of this product for the On Hand quantity to be negative. There are many different scenarios in which users would see negative quantities in the Available and On Hand columns. Although these simple example do not take into consideration any assembly transactions or purchase orders, the calculation will always follow the above formula.
For further details on the availability calculation and the difference between availability and on hand quantities, check out this article!