If you want to make an inventory item inactive inside the SAP Business One system, follow these steps:
1) In the modules menu inside SAP Business One, single click on Inventory to expand the options below it. Then double-click on Item Master Data to open the Item Master Data window.
2) Once inside the Item Master Data window, locate the radio buttons in the lower left hand corner of the open screen that read: Active, Inactive, and Advanced.
3) Click the “Inactive” option. Click OK to save your changes.