January 11, 2011

Between a periodic physical inventory and a computer-track inventory, which has more value?

Companies such as hardware/drug stores selling small merchandise may find it easier to update inventory accounts periodically (physically) as opposed to inventorying every item sold daily; however, computers and point of sales software/data have both helped in the advancement of taking inventory.

Computer-tracked inventory records each sale of any of the merchandise, and then records this data in the company’s inventory account.

I believe that since this type of inventory tracking immediately accounts for sold items; in addition, a computer-tracked inventory system accounts for purchased goods by adding them to the inventory count, that it is more important for medium to larger sized establishments.

 A computer-tracked inventory account may have more value, simply because current information is easier to find, and less labor hours are needed to maintain this type of system; making this system more valuable in any organization.