Advantages of perpetual Inventory System

Advantages of perpetual Inventory System

The perpetual inventory is basically a system which update the inventory record in real time. it means that inventory level changes with each purchase and sold transaction. The perpetual inventory system is gaining popularity with each day passing for the following advantages.

1. Easy to prepare the financial system without any delay. The stock form an important part of financial statements . The availability of stock figures from the books of accounts make the task of accountant very easy to prepare the financial statement.
2. Time Saved :- The inventory count in periodic system of inventory consumes a lot of time . The perpetual system saves the time as the inventory figure are already available and only needs to be confirmed by physical count.
3. Act as control Procedure :- This system is really helpful to identify any mistake or fraud in the inventory . the management can identify the mistake by the comparison of figures of physical count against figures of perpetual system.
4. Re order decision easier :- The stock level are available at all time so management can easily decide about the re order quantity.