Accounting Inventory Methods are the established protocols used to monitor and record the costs associated with a company’s purchases, inventory sales, and overall business activity. On a basic level, they provide companies with visibility into their financial performance, allowing them to accurately measure costs and revenues. The most common accounting inventory methods include the Perpetual system and the Periodic system. The Perpetual method continually updates inventory records as items are bought and sold, while the Periodic method compares beginning and ending inventories each accounting period to track changes in stock levels. No matter which method is chosen, proper implementation of inventory methodologies can help businesses properly manage their cash flow and increase profitability.