Perpetual vs periodic inventory

Inventory & counts

How purchases, COGS, and stock counts post — the accountant’s distinction.

Why two methods?

Inventory method changes which account purchases hit, when COGS is recognized, and what stock count posts. Set it in Settings → Inventory method.

Perpetual (default)

Purchases capitalize to inventory (e.g. 1300). Each sale posts COGS (5000) and reduces inventory. Stock count variances post to inventory variance (5060).

Periodic

Purchases post to a purchases account (5050), not inventory. Sales do not post COGS per invoice. Applying a stock count closes purchases and recognizes COGS = beginning + purchases − ending inventory, and sets ending inventory.

Which should you pick?

Perpetual fits day-to-day stock tracking and instant COGS. Periodic fits businesses that count at period end with an accountant. Align before switching if you already have movements.

Tip: After choosing, spot-check purchase and stock-count journals against your accountant’s expectations.

Key accounts

1300 Inventory · 5000 COGS · 5050 Merchandise purchases · 5060 Count variance. Saudi detailed charts may also include a combined VAT control account alongside 2100/2200.

Inventory & counts

Apply a stock count

Count quantities, apply, and understand journals by inventory method.

Purchases & expenses

Purchase invoices

Record supplier purchases and their stock/VAT impact.

Reports & VAT

Period close checklist

Practical steps before approving month or quarter reports.

Still need help?

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