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LogoutAlso referred to as a fixed time period inventory system, the inventory on hand is counted at specific time intervals, for example, every week or at the end of each month.After the inventory in stock is determined, an order is placed for an amount that will bring inventory back to a desired level. Inventory level is not monitored during the time intervals between orders;that means the advantage of no record keeping.
Periodic inventory system
We do not track the inventory so closely on a day-to-day basis. we just, sell it (and receive shipments). At the end of the period (month, year, whatever), we go into the warehouse, count the inventory, value it, and then (and only then—a moment in time later, your snapshot is out-of-date), we know its value (and thus, the cost of everything you sold—the cost being, the opening inventory, plus purchases, minus the closing inventory we just counted and valued).
Periodic inventory means that you only update your inventory levels whenever you run a cycle count. Think of it like taking a picture of your stock levels and stock value every X number of days. Whenever someone wonders how much is in stock, they’ll have to reference the last time the inventory was counted.