Perpetual Inventory??

[Packer]

Excuse me being dumb.....

I hear the term perpetual inventory a bit. Is that something to do with cycle counting and stock taking ??

[Red Hot]

Excuse me being dumb.....

I hear the term perpetual inventory a bit. Is that something to do with cycle counting and stock taking ??

Simple answer :-)

Definitions of Perpetual inventory on the Web:

a method of keeping up to date records on all inventory items by recording every time an item enters or leaves inventory.
http://www.cfdccariboo.com/glossary.htm

Inventory amounts on hand determined by what was sold. Does not account for theft, spillage, and overpouring.
http://www.accubar.com/Products/glossary.asp

A system whereby the inventory of units of property or product at any date may be obtained directly from records, without resorting to a physical inventory, that show quantities; descriptions, including units of measure and price; and value of property or products.
http://www.doe.k12.ga.us/schools/nutrition/qmgloss.asp

[Starbucks Junkie]

There is an excellent book that is available at Amazon on the subject, it is called "Inventory Recording Accuracy - Unleashing the power of cyclecounting"

It gives you a three step guide in implementing an excellent PI programme.

Hope this helps.

[cocojambo]

there are 2 types of inventory systems, perpetual which is computerized and more advanced and accurately reflects inventory, the other one is periodic where inventory is closed at year end and an inventory count must be done at the end of the year. Here is a definition of perpetual inventory

A perpetual inventory system, as the name suggests, gives a continuous record of the amount of inventory on hand. A perpetual inventory system adds up all the merchandise purchases in the Inventory account, and removes them from this account when an item is sold, and transfers it to Cost of Goods sold. Therefore, a merchandise piece sits as Inventory on the balance sheet of Costco when it is not sold. However as soon as it is sold, it is moved from the Inventory account to Cost of goods sold, an expense item on the Income statement. The advantage of using a perpetual inventory system is that at any given point in time, we can see the amount of merchandise inventory on hand without doing any calculations. The perpetual inventory system has become popular due to advancements in computer technology that continually post inventory transactions and keep an updated account. Doing this on paper or by hand using human accountants is impossible, especially for a large company such as Costco Wholesale. Perpetual inventory systems therefore provide more timely information to investors, are currently widely used across all businesses