Inventory glossary
What is Perpetual inventory?
Perpetual inventory is a system that updates stock counts automatically every time you sell, receive, or adjust inventory, instead of waiting for a periodic count.
For a small Shopify store, perpetual inventory means your stock numbers stay current without manual recounts. Every sale lowers the count and every received purchase order raises it, so the quantity shown for each variant reflects reality in near real time.
Use it to trust your reorder decisions day to day. If your system is perpetual, you can check stock levels anytime and know they are close to accurate, rather than relying on a count you did weeks ago. You still need occasional physical counts to catch errors, but you are not starting from zero each time.
Example
A candle store starts the week with 80 units of a jar candle in Shopify. It sells 25 units through the week, and Shopify's perpetual tracking drops the count to 55 after each sale. On Friday the store receives a purchase order for 48 more units, and the count updates to 103 without anyone manually recounting the shelf.
Common mistakes
- Assuming perpetual counts are always accurate and skipping physical counts entirely.
- Not recording damaged or lost stock as adjustments, which lets the perpetual count drift from reality.
- Forgetting that returns and exchanges also need to update the perpetual count, not just new sales.
Perpetual inventory and SteadyShelf
SteadyShelf relies on your perpetual inventory counts to forecast demand and set order-by dates, so keeping those counts accurate through proper receiving matters for getting correct purchase order suggestions.
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Related terms
Inventory accuracy · Cycle count · Physical inventory count · Inventory adjustment · Stocktake
FAQ
Does perpetual inventory mean I never need to do a physical count?
No. Perpetual inventory updates automatically with transactions, but errors like theft, damage, or miscounts during receiving still build up over time. A periodic physical count or cycle count catches those errors and corrects the system.
Is perpetual inventory the same as real-time inventory?
They are closely related. Perpetual inventory describes the method of continuously updating counts with each transaction, and in practice this makes the numbers close to real time, though small delays can happen between an event and when it is recorded.
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