If you try to uncheck the Inventory Item checkbox on one of your inventory items and you receive the 3504-20 error message, it’s because you cannot change this checkbox once there are transactions related to that inventory item. This is a safeguard against ending up with inaccurate reports.

Instead, to make an inventory item inactive, use the radio buttons in the bottom left corner of the Item Master Data screen.

Active Inactive Radio Buttons Item Master Data Screen SAP Business One

Inventory Item Checkbox Item Master Data Screen SAP Business One