Perpetual vs Periodic Inventory: Which Is Right for Small Business?
Perpetual inventory updates continuously as stock moves. Periodic inventory updates after scheduled counts. The right choice depends on how often inventory moves and how accurate your numbers need to be between counts.
What perpetual inventory means
A perpetual inventory system updates stock as items are received, sold, transferred, checked out, returned, or adjusted.
What periodic inventory means
A periodic inventory system updates counts at set intervals. Between counts, the business may not know the exact quantity on hand.
Which is better for small business?
Periodic is simpler at the start. Perpetual becomes better once inventory moves frequently, multiple people touch stock, or stockouts are costly.
Why barcode scanning changes the decision
Barcode scanning makes perpetual inventory practical because updates happen at the moment of movement with less typing and fewer errors.