Key characteristics or features of perpetual inventory system can be highlighted as follows:
1. Reliable Technique
It is a most reliable method of inventory control. Record of inventory is made after every issue and receive of materials.
2. Less Cost And Time
It facilitates regular recording and checking of stock which avoids the time and cost of annual stock taking.
3. Avoids Unnecessary Capital
Perpetual inventory system helps to avoid unnecessary capital blocked in maintaining inventorie
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4. Regular Checki
There is a continuous checking of stock by an experienced staff.
5. Detection Of Discrepancies
Regular and continuous checking helps to detect frauds and discrepancies easily. It helps to take appropriate steps to avoid discrepancies on time.
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Motives Of Holding Inventory
6. Quick Valuation
Because of up-to-date record of inventory, it ensures quick valuation of stock which helps to prepare profit and loss account on time.
7. Less Investment
Perpetual inventory system helps to reduce wastage and misuse of materials which helps to minimize the investment in raw materials.