Periodic inventory is a method of inventory management and accounting which involves taking a physical count of the stock in a business at specific intervals, usually every quarter or year. This system allows businesses to adjust their records on a regular basis, reducing the risk of inaccurate accounting due to theft, damage, or shrinkage. Perpetual inventory is an inventory management system that records each transaction as it occurs and keeps a running total of the stock level. Every time there is a sale, purchase, or return of items, the records are updated accordingly, resulting in up-to-date inventory data. While this system provides the most accurate understanding of what’s in the inventory, it can be labour-intensive and costly to maintain.