1.0. Overview Periodic Versus Perpetual
Periodic Inventory System
Periodic inventory counts (such as once a month, or at the beginning and end of each year), and does not have an accurate record of the inventories in between these points
This system does not keep continuous, moment-to-moment records of inventories. Records are updated periodically – meaning, at certain points in time – when actual counts are done.
Perpetual Inventory System
Perpetual means continuous. This is a system where a business keeps continuous, moment-to-moment records of the number, value and type of inventories that it has.
OCi Accounting system – where each item of inventory is linked to the accounting entries – creates a perpetual system. Inventory levels are automatically decreased as soon as the invoice has been entered and completed at the till.
OCi Accounting system – where each item of inventory is linked to the accounting entries – creates a perpetual system. Inventory levels are automatically decreased as soon as the invoice has been entered and completed at the till.
Advantages & Disadvantages
Perpetual Inventory System
- Allow for Accurate Restocking
- Uncovers Shrinkage & Theft
- Accurate Interim Financial Statements
This method ensure real-time recording of stock movement, hence able to give a accurate report.
Periodic Inventory System
- Simple Calculations
- Easy Record System
As stock is only adjusted during year-end, interim control is difficult and reports are outdated.
OCi Accounting system adopt the moreaccurate Perpetual Inventory method
Modules With No Impact On Stock
Transactional Modules that have totally no impact on Inventory Stock Calculation:
- QUOTATION
- PURCHASE ORDER
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