Hi Owen
Xero doesn’t allow inventory to go below zero (confusing terms!) so if Woo is also set to not allow back orders I cannot see how that can happen. Please email me the screenshots of the Xero inventory screen for that product and for Woo too. Ideally create a test product in both systems and check it with a test order.
How are you creating your orders only from the front end shop or also from the back end order screen?
Thanks
Pete