There are two main ways in which companies manage inventory: periodic systems and perpetual systems. Let’s take a look at the difference between the two.

What is periodic inventory?

Periodic inventory is a way of managing stock that relies entirely on stock taking. Businesses with a periodic system count their stock regularly — say, every 3 to 6 months — to verify stock accuracy, checking whether stock levels match up to sales figures.

What is perpetual inventory?

Perpetual inventory is a system that involves tracking stock levels as goods are receipted, produced, sold, or returned to the store. Perpetual inventory systems tend to deliver the most up-to-date inventory figures, with less dependence on stock takes for accuracy.