periodic inventory system

periodic inventory system is an inventory management method where inventory levels are updated at regular intervals, rather than continuously. Businesses using a periodic inventory system count their inventory at specific periods (e.g., weekly, monthly, or quarterly) and update their financial records based on that count. This method is more cost-effective for small businesses with low transaction volumes or those selling fewer items. While periodic inventory systems are easier to manage, they provide less real-time visibility into stock levels compared to perpetual inventory systems, where inventory is updated continuously as sales and purchases occur.