Among the systems within the accounting area, we find those related to the registration of goods in warehouses with the two main types of it. These allow you to keep track of the amount of merchandise stored to know what is there and what you can count on.
Most companies opt for one of these systems, whichever is most convenient for inventory registration, to maintain such control. There are differences between the two that lie in the form of registration made. If you want to know those differences, here we explain them briefly.
What is the perpetual inventory system and what are its advantages?
In the first case we have the perpetual inventory system, which in many places is also known as the constant or permanent inventory system. It is preferred by most companies and its effectiveness is one of the most notable aspects.
It is a computerized inventory system, where all the assets in stored merchandise are registered in software to maintain control of each item in the merchandise, and automatically ensure the accuracy of what is left in inventory, with basic mathematical calculations.
With this comfortable system, the evaluation of the results can be made easier, even the same analysis of the results in the sales of a company, establishing a saving of time and simplicity for the accountants and administrators at work. This is a highly regarded advantage in company affairs.
Another advantage is one of its characteristics: it is a constant system that has the possibility of registering the existing inventory permanently, that is, the registered operations go to a history, with a list, which has the transactions registered at all times, And not just on a certain date.
It is good that you know the importance of having an inventory system for your company, and of having centralized control and adjusting to the type of system that best suits you for the control you require of your inventory.
What is the periodic inventory system and what are its advantages?
The periodic inventory system, or known as intermittent or temporary, is the other system in question. It is the least recommended between the two within this world of automation and control through software and inventory registration programs.
This system allows knowing in a given time the amount of inventory that is held, making a physical count periodically, which can be monthly or quarterly, and in some cases, even annually.
It can be said that it is a simple system, it does not require a computerized control, and it is carried out through the physical counting method of the merchandise stored or placed in stock. It is then, easy to manipulate but very prone to failures and losses in said profits, since there is no exact control, without errors, of the inventory. In other words, this system lends itself to some theft by company employees, since the control we are talking about is not rigorous or strict in many ways.
However, for small businesses, in the accounting treatment of micro-enterprises, it is very useful because they are stores or warehouses with a small amount of assets in the form of merchandise, and implementing this system is the easiest and most comfortable method for workers, who they are few.
What are the differences between perpetual and periodic inventory systems?
Knowing already the two types of inventory systems that are used in companies today, and noting each of the advantages and disadvantages that these inventory systems present, it is possible to establish what the differences are between them, so that in that way know how to choose the system that best suits you for your company.
Among the main differences is the fact that one of them is computerized, and the other is not. In addition, the perpetual system does not require a physical count, and merchandise purchases are recorded in the well-known assets account, which is contrary to the periodic system.
It should be noted that the perpetual allows constant updates. And in the case of the newspaper, those updates are the same counts.
