HomeProductsInventoryAdvantages and Disadvantages of Perpetual Inventory System

Advantages and Disadvantages of Perpetual Inventory System

Using the best inventory system has become the basic need of all companies to achieve warehouse efficiency. The existence of the outstanding inventory system can be a superior solution to overcoming stock problems in the company. Stock control is a critical feature in a trading information system. In practice, the stock is difficult to control manually, especially if the number of products sold varies. The absence of stock, the length of transportation, and delivery delays are some obstacles that cause delays in filling stock in the warehouse. This lack of stock is a loss for the company because it cannot keep up with consumer demand. One way to overcome this problem is to apply the most refined perpetual inventory system.

Download Now: Inventory System Pricing Scheme Calculations

Perpetual Inventory System is a stock control method that updates items every time there is a transaction in your company. The transaction can be in sales, sales returns, purchases, or purchase returns. This method can track the position of your stock sold to avoid stock shortages. Implementing an integrated perpetual inventory system can help calculate inventory in real-time. Moreover, this system has become a practical choice for many businesses. Before you implement the integrated perpetual inventory system in your company, you must determine the strength of this system. This article has summarized all the advantages and disadvantages of a perpetual inventory system for you to consider. Read more below!

Also read: Top 5 Inventory Management Software Systems in Indonesia


Advantages of Perpetual Inventory System

perpetual inventory system advantages

You need to know that outstanding inventory management has become the basis for decision-making in the company. Usually, companies record inventory using the perpetual method. However, using the perpetual method requires companies to update their inventory data. That is why a system is needed to avoid manual work. The perpetual inventory system is a system that can update inventory levels in your warehouse continuously, quickly, and accurately. There are several reasons why you should implement the best perpetual inventory system. Here are four advantages of a perpetual inventory system:

Real-Time updates

The first advantage is real-time updates. You must always update inventory data in the company. That is why you must always update inventory data on an ongoing basis by implementing the latest inventory system. In addition, this system can automate and track purchases and sales instantly. You can also access inventory data whenever and wherever you need it.

More Informed Forecasting

By using a perpetual inventory system, you can understand your customers’ buying patterns. This system will assist you in finding new opportunities that can maximize the company’s sales strategy. By knowing customer buying patterns, you can prepare the stock you need as best as possible. In addition, this system will prevent you from excess or shortage of stock that can result in company losses.

Managing Multiple Locations Easily

One of the challenges in inventory is how to monitor inventory at various locations as effectively and efficiently as possible. You will be overwhelmed if you do manual inventory monitoring. Manual monitoring will only waste a lot of time and effort. Therefore, the  inventory system is here to manage multiple inventories in all locations easily. That way, you can track the inventory levels of all outlets quickly and efficiently. In addition, you can also find out the supply needs of each outlet, thus avoiding stock shortages.

Facilitates Preparation of Financial Statements

Finally, the last advantage you will get from the  inventory system is the ease of preparing financial reports. You need to understand that one of the components in financial statements is inventory value. Therefore, this system can speed up your preparation of financial reports. This is because the amount and value of the available stock are recorded directly in the system. That way, you can avoid error manual calculations.


Disadvantages of Perpetual Inventory System

Although the inventory system has many advantages, there are several things you need to pay attention to. By knowing the shortcomings in the system, you can avoid and anticipate these problems. But you need to note that the benefits of this system are very large for your company. Therefore, don’t hesitate to apply the best perpetual inventory system to your business. Here are the disadvantages of a perpetual inventory system that you must pay attention to:

Loss of items

The first disadvantage is the vulnerability to loss of items. This system does have a function to ensure quick and easy inventory recording. However, the absence of physical checks in this system has the potential for the loss of goods and can result in company losses.

Scanning errors

One of the important things that must be in a perpetual inventory system is that each item must have a barcode. The presence of a barcode or tag on each item is used to make it easier for you to scan all items. Suppose an error occurs in the scanning system or fails to be detected. In that case, the company will not record the item in the system.

Improper inventory tracking

The main problem in the inventory system is improper inventory tracking. If this happens, tracking the company’s goods and inventory in the warehouse or store will hamper your business operations. Therefore, you can use effective and efficient backups to support recording in the perpetual inventory system.


One of the things you need to be aware of when it comes to systems is hacking. Irresponsible hacking will threaten the security of all company data and information. This also applies to the perpetual inventory system in your company. Therefore, you should make sure to protect company data securely. The existence of hacking can result in the leakage of company data. If this happens, your company will be considered to have no credibility and the system is not optimal.


The last weakness is that it is vulnerable to theft. A perpetual inventory system does not guarantee that the stock of goods in your company will remain safe from theft. The possibility of theft by irresponsible people is still very large. Therefore, companies must implement strict procedures to prevent theft, which can harm the company. If items are lost due to theft, this will impact your records in the perpetual inventory system.

When Would You Use a Perpetual Inventory System?

when implement inventory system

After knowing the perpetual inventory system’s weaknesses and advantages, you can now decide the best time to implement it. Then, when is the right time to use a perpetual inventory system? To develop a business on a larger scale, you need to implement this system. You also need to understand how big the company’s products and items are and understand the company’s margins and profitability. Thus, you can easily customize your company with the inventory system. In addition, you also have to ensure the right vendor to implement the most advanced inventory system in the company. The best vendors support and help you solve problems within the company. You can also consult the best inventory system vendor to determine the right time to implement this system.

Also read: 5 Best ERP Software Singapore



Perpetual Inventory System is a stock control method that updates items every time there is a transaction in your company. There are several reasons why you should implement  this system. Perpetual inventory system advantages are real-time updates, more informed forecasting, etc. This system also has several disadvantages that you need to pay attention to. The disadvantages of perpetual inventory systems are loss of items, scanning errors, theft, hacking, etc. To get the best benefits, you should choose the best perpetual inventory system from HashMicro.

Download Now: Inventory System Pricing Scheme Calculations

Inventory system from HashMicro can monitor and maintain various items and stocks within the company. Automating inventory management with this system will help the company to save a lot of time, so it can focus more on growing the business. HashMicro’s advanced inventory system also has a multi-warehouse feature. This will allow your company to manage inventory over several locations. You can also customize this integrated inventory management software according to your needs. HashMicro is the best vendor for you to implement a fully-featured perpetual inventory system. Contact us now and get a free demo!

Interest in getting savvy tips for improving your business efficiency?

Femri Resdifianti
Femri Resdifianti
Femri is an explorer who sails through all kinds of seas of writing in search of a treasure trove of new knowledge. She likes to express her complicated thoughts in writing - a content writer at HashMicro.


Please enter your comment!
Please enter your name here

Looking for software system to improve your business efficiency?

Get a free consultation with our business expert by filling in this form!


Typically replies within an hour

Looking for a Free Demo?

Contact us via WhatsApp and let us know the software you are looking for.

Claim up to 80% Productivity Solution Grant for various HashMicro Software!
Book a Demo by WhatsApp