In a perpetual inventory system, inventory is reduced as soon as a sale is rang. The cash register is connected to the inventory database. In this way, a business owner can easily see when a good is out of stock. The perpetual inventory system updates inventory on a consistent basis.

In a periodic inventory system, inventory is adjusted at period intervals normally just before the retailer needs to make a new order right after a manual count has been done. Inventory is not updated after each sale.  Some retailers like mom and pop stores do not update inventory until the end of the accounting period just before they file their tax returns.