Perpetual inventory
In Arabic الجرد المستمر
Perpetual inventory is a method of stock accounting in which every receipt, issue and adjustment updates the quantity and value of stock as it happens.
In plain words
Under a perpetual system the books always show what should be on the shelf and what it is worth. Cost of goods sold is booked with each sale, not worked out at month end, so margins and stock value can be read on any day without waiting for a count.
It differs from a periodic system, where purchases are recorded but stock is only valued by counting at period end. It is also not the same as stock valuation: perpetual inventory is how the figures are kept, and valuation is the money figure they give at a point in time.
The common mistake is thinking a perpetual system removes the need to count. Breakage, theft and wrong picks never post themselves, so the books drift from the shelf. Counts are still needed; they correct the figure rather than create it.
- Received 100 at SAR 4.00
- SAR 400.00
- Sold 60, cost booked at once
- SAR 240.00
- Left in stock
- 40 units
- Stock value in the books
- SAR 160.00
In Axon Suite
How Axon Suite handles it
In Axon Suite receipts, issues, transfers and count adjustments each post their cost to the inventory accounts, valued by the costing method set on each item.
Feature
Five costing methods per item
Each item carries one of five costing methods: weighted average, FIFO, first expiry (FEFO), standard or specific cost. Every issue is valued by that method and posted to the ledger, and voiding a document reverses it at the cost it was recorded at.
Open: Five costing methods per item