Explain Why Invoice is Showing Back Ordered Items

Scenario

Items have an available quantity, but the Invoice is showing back ordered items. The item in the invoice is showing as back ordered because the item has not yet been fulfilled. Once the item has been fulfilled, the item will show 0 backorder.

Solution

Consider the following:

1. Check if the Invoice in Advance of Fulfillment preference is enabled
2. Navigate to Setup > Accounting > Accounting Preference 
3. Click Order Management 
4. Locate Invoice in Advance of Fulfillment 
5. The sales order was billed before fulfilling the items