What Is A Perpetual Inventory Listing?

Perpetual Inventory Listing

Your business depends on inventory. There shouldn’t be too much inventory in stock to overcharge for storage, but not too little so that you’re under capitalizing. Inventory management can help in that regard. Real-time inventory tracking can be accomplished with a perpetual inventory listing. Please continue reading this article to discover how perpetual inventory systems work and if they can be used for you.

If you have more queries about the perpetual inventory systems or are looking for Amazon inventory management system to effectively manage your inventory, you can contact us at Inventooly. 

How does a perpetual inventory listing work?

The perpetual inventory listing is a method of inventory management in which events like sales and receipts of stock are recorded in real-time. It is done by using an inventory system that keeps track of them. Inventory changes the cost that is recorded by perpetual inventory systems when transactions occur.

Perpetual inventory systems work in what way?

As goods are purchased and sold, inventory counts are updated continuously in perpetual inventory systems. A periodic inventory system cannot provide the same level of accuracy and efficiency as this method of inventory management. Using this type of inventory system is explained in step-by-step detail. 

Step 1. Stock levels are updated by the point-of-sale system

The POS (point-of-sale) system automatically debits the main inventory each time a product is sold via the inventory management system. This process can be accomplished quickly and easily with barcode readers or RFID scanners.

Step 2. Product costs are automatically updated

The cost of goods sold (COGS) is updated whenever a product is sold or received.

Step 3. Changes are made frequently to reorder points

In perpetual inventory systems, reorder points are automatically adjusted based on historical sales data to keep inventory levels optimal. 

Step 4. Automated orders are generated for purchases

A new purchase order will be generated and sent to your supplier whenever your item or SKU reaches its reorder point.

Step 5. Scan the products into inventory once they have been received

Using warehouse management software (WMS), your warehouse employees will scan the items when they arrive. You can make these products available for purchase on all or specified sales channels by doing so, and they appear on your inventory management dashboard.

What are the advantages of maintaining a perpetual inventory list?

All types of eCommerce businesses can benefit from perpetual inventory systems. Additionally, it helps eliminate labor costs and human errors by tracking inventory data in real-time. In this article, we will explore why eCommerce businesses use perpetual inventories.

Real-time recording of data

Inventory updates and movement are recorded by a perpetual system as they occur. Consequently, you will always be able to trust the accuracy of your inventory counts. 

Documents every step of the process

Having a perpetual inventory tracking system helps your eCommerce business keep track of inventory movements and interactions. Your supply chain can be optimized with this information, as it will help you identify bottlenecks in your procedures.

Costs associated with inventory management are  reduced

Stock holding costs and inventory replenishment can be minimized and controlled with real-time updates. Automating manual tasks with perpetual inventory systems reduces labor costs because it automates many tasks that would otherwise be performed manually. 

At the end of the year, the balance of inventory is calculated

With perpetual inventory, your inventory balance at the end of each year is determined instantly since you are keeping inventory continuously. Accounting purposes require accurate inventory numbers. This helps ensure you have accurate information. 

More accurate demand forecasts

It is easy to forecast demand with a real-time inventory system. The inventory and sales data from the past can help predict future sales cycles and ensure a sufficient amount of inventory throughout each season. 

Why is it necessary to maintain a perpetual inventory system?

Business owners without the need to deal with the manual process required for periodic inventory systems can track stock levels at any time. A perpetual inventory system automates processes, freeing up capital and time.

What makes a perpetual inventory system different from a periodic inventory system?

Ecommerce businesses can monitor and track their inventory using periodic and perpetual inventory systems. Periodic inventory systems are often not as advanced as perpetual inventory systems.

Inventory data is centrally managed in a perpetual inventory control system. Utilizing inventory data, the system forecasts and calculates sales trends, calculates reorder points, and locates items that are out of stock.

FIFO, LIFO, and weighted averages are among the inventory valuation methods used to calculate COGS by using a periodic inventory system. Using a periodic inventory system, businesses calculate and report their current inventory counts at the end of each accounting period and financial year.

How to get your inventory management under control

In contrast to a manual inventory system that requires an excessive amount of time, a perpetual inventory system is the most efficient method of maintaining inventory. To optimize your inventory tracking system, it is important to have the appropriate technology. It is imperative to have an inventory management system in place for timely order fulfillment. A third-party logistics provider can handle warehousing, inventory management, pick and pack, and shipping for merchants so that fulfillment is outsourced. 


Ecommerce businesses with fast growth should use a perpetual inventory system. An inventory system based on periodic updates is likely to have discrepancies and weaker stock control. You can centralize inventory management through perpetual inventory systems and optimize stock levels, among other features.