If you have ever worked with managing inventory, chances are you have encountered a perpetual inventory system. Such a system tracks and applies real-time updates to data such as prices and quantities when transactions are made. Inventory stocks are adjusted immediately when items scanned in or out.
In contrast, a periodic inventory system simply keeps a cumulative record of all transactions in or out, and at the end of the specified period (say, an accounting quarter) these records are reconciled.
The Advantages of a Perpetual Inventory System
In this light, the advantages of a perpetual inventory system are obvious. Tracking item flow in real-time allows for close monitoring of stock levels. When combined with effective PAR Levels, such a system could help prevent item shortages and control inventory spending.
Moreover, by monitoring item demand and usage, a perpetual inventory system can help your business respond quickly to market trends. This is especially important in dynamic markets where supply, demand, and prices are continually in flux. But even in more “traditional” sectors like health care, technology, market pressures, and uncertainty have increased the need for real-time data. Medical practices and facilities need to be able to respond not just to supplier price changes, which are often conveyed electronically over EDI, but also to item usage trends and patterns. In such a situation, a perpetual inventory system is critical to helping health care providers protect shrinking profit margins and maintain a path of healthy growth.
As you consider software options, there are various options available, but a perpetual inventory system can provide the data and control you need to manage your practice, and set you on a healthy path of growth for the future.