Answer:  Negative Stocks allowed can be activated at Valuation Area and  Storage Location level. This is useful when business wants to use the Physical stock although the Goods Receipt in the system is not yet happened due to any other reasons. Business can issue the stock in the system to Production or Cost Center etc.

System will update negative stock in the system and we can see in stock overview. It will be updated once the Goods Receipt is done.

Negative stocks in valuation area allowed

Specifies that negative stock balances are allowed in the valuation area.

Dependencies

Negative stock balances can only result if they are allowed at the following levels:

• Valuation area level

• Storage location level

• Material level (plant data in the material master record)

Negative stock levels are already allowed for special stocks if negative stocks have been activated in the valuation area and for the special stock in question in the plant. You do not have to activate them in each material master record.

You can have negative balances in stocks of the types Unrestricted and Blocked

Negative balances are possible in the following special stocks:

• Vendor consignment (K)

• Stock of material provided to vendor (O)

• Consignment stock at customer

• Sales order stock (E)

• Project stock (Q)

• Returnable packaging stock at customer (V)

• Returnable transport packaging (M)

Configuration : Negative Stocks allowed activation for Valuation Area and Storage Location

Negative Stocks allowed at Material : 

Regards,

Ganesh