What Is Perpetual Inventory?
Perpetual Inventory is a real-time inventory management system that provides continuous tracking and accurate recording of stock levels. It eliminates the need for periodic physical counts by automatically updating inventory quantities with each transaction.
Integrated with other business systems, it ensures seamless data synchronization and offers advantages such as enhanced accuracy, reduced stockouts, improved efficiency, and informed decision-making. With Perpetual Inventory, businesses can streamline operations and provide better customer service.
Key Features of the Perpetual Inventory System
The Perpetual Inventory System has several essential features that enable businesses to manage their inventory efficiently in real-time. Here are the key features that make the system a powerful tool:
Know The Difference Between Perpetual Vs Periodic Inventory Method
Perpetual and Periodic Inventory Methods are two distinct approaches to managing inventory. Understanding their differences can help businesses choose the most suitable method for their needs. Below is a comparison of Perpetual and Periodic Inventory Methods:
Perpetual Inventory Method
Ongoing and perpetual
Continuous & Automated
Businesses requiring real-time visibility, fast-paced industries
Relies on automated systems (barcode scanning, RFID)
Periodic Inventory Method
Periodic Physical Counting
Periodic Manual Recording
Updated Through Counts
Susceptible To Discrepancies
Small Businesses, Simpler Inventory Management Needs
Manual Counting And Recording
Benefits of Perpetual Inventory System for Your Business
Implementing a Perpetual Inventory System can bring numerous benefits to your business. Below are the key advantages of adopting a Perpetual Inventory System:
When to Use Perpetual Inventory System?
The decision to implement a Perpetual Inventory System depends on various factors and business needs. Here are key scenarios where adopting a Perpetual Inventory System is particularly advantageous:
How Can You Calculate Perpetual Inventory Using this System?
Calculating perpetual inventory involves continuously monitoring and updating inventory levels in real-time. Here are the steps to calculate perpetual inventory with this system:
- Enter Initial Inventory: Input the starting inventory quantities into the system.
- Track Purchases: To update inventory, and record purchase transactions, including quantity and cost.
- Track Sales: Enter sales transactions, deduct sold quantities, and calculate COGS.
- Adjust for Returns: Record return transactions to adjust inventory quantities accordingly.
- Adjust for Transfers: Record transfer transactions to reflect inventory movement.
- Obtain Ending Inventory: The system provides real-time ending inventory quantities.
- Calculate COGS: The system automatically calculates COGS based on sales and costs.
- Determine Gross Profit: Subtract COGS from net sales to calculate gross profit.
Implementing a Perpetual Inventory System
Implementing a Perpetual Inventory System involves several steps to ensure a smooth transition and successful integration into your business operations. Here's the implementation process:
Assess Your Needs
Evaluate business requirements and select a suitable system.
Research & Select
Choose a compatible and cost-effective Perpetual Inventory System.
Organize and clean existing inventory data for migration.
Customize the system to align with specific business needs.
Provide comprehensive training on system usage and data entry.
Conduct thorough testing to validate system functionality.
Transfer existing inventory data to the new system accurately.
Integration & Testing
Integrate with other systems and conduct compatibility testing.
Go Live & Monitorn
Launch the system and monitor its performance.
Regularly assess system effectiveness and make improvements.
Why Choose Silent Infotech for a Perpetual Inventory System?
When it comes to selecting a provider for your Perpetual Inventory System, we offer several compelling reasons to choose us as your trusted partner. Here's why: