Perpetual Inventory Decoded

Technology and data have helped us improve many business processes. Our industry then proves out the best practices and application. Similiarly, Perpetual Inventory leverages both collective learning and  technology. This combination gives Independent Pharmacies the best possible options for synchronizing sell through and ordering processes.  

What does Perpetual Inventory Mean?  

We think of perpetual inventory as a method of accounting that records the sale of inventory immediately through a point-of-sale systems. Drugs purchases are recorded as a debit to the inventory database. This provides a highly detailed view of changes in inventory with immediate reporting. Because of this, owners have a great awareness of amount of inventory in stock because the inventory more accurately reflects the medicines on hand.

This system is diffirent from a periodic inventory system, a method in which a company maintains records of its inventory by regularly scheduled physical counts.

Periodic Inventory


Perpetual Inventory

Purchase Accounting Inventory Accounting
Cost to Goods Reported at period end Cost to Goods Updated with every sale
Closing entries required Closing entries not required

See this comparison in accounting detail.

Perpetual Inventory: Big Word, Big Rewards  

The word ‘perpetual’ sounds stoic and permanent, potentially reducing flexibility. It is big word that ultimately brings a much more streamlined approach to your drug ordering and turns without compromising on customer prescription availably. The benefits of this system include usage with replenishment, triggering item orders, when your on-hand inventory hits a set quota, and finding out what your order points should be based on your client usage trends.  So there is more flexiblilty as well as acurracy built in to this type of inventory managment approach. 

What Perpetual Inventory could mean to your store? 

Pharmacy owners install a perpetual inventory to remove complexity and ambiguity from their stores. Once in place, store owners and inventory managers can harness the power of predictive data to order reduce order costs and hold inventory. As a result, the insights that come from perpetual inventory and reporting empower owners to make the most informed business decisions.  Some benefits include ensuring your in-store products are as streamlined as possible to which can help reduce cost and labor. 

Additional In-store Practices that get Expensive without a Perpetual Inventory 

  • Manual ordering by more than one team member adds duplication and complexity
  • Orders are placed ad-hoc based on impulse and perceived need increases expired items
  • Urgent products may be missed, increasing shipping costs 
  • There is opportunity to remove complexity that equals cost and time savings

So you will have more resources available to you once you have a perpetual inventory installed within your store. These resources are prime to be put back into your business in the form of more labor hours. Consider using these available hours to focus on customer consultations, team training, service expansion, marketing and more. 

You are not alone in Optimizing your Inventory 

Our customers that use perpetual inventory are able to leverage both collective learning and data technology. Because of this, stores are able to synchronizing sell through and ordering. At Inventory iQ, we have studied inventory best practices and tested our algorithm against key benchmarks. We help you make the most of your data and inventory opportunities. Our goal is to continue to monitor, report, and make adjustments to your orders over time.  As a result, we keep a finger on the pulse of the pharmaceutical industry. This helps to ensure we keep you ahead of changes that could impact your drug supply. We are innovative at every stage of your inventory analysis and improvement. Take out the potential for waste in your stock and processes now. Get in touch with Inventory iQ



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Founded in 2011, Inventory iQ gives you a smart, data driven approach to optimizing your pharmacy inventory. We’ve helped nearly 400 pharmacies realize $60K  on average in cash flow.

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Pharmacy Management Systems

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