Periodic Inventory
Definition
An inventory system that establishes stock levels and cost of sales only by counting at the end of each period. Cheaper to run than a perpetual system, but shrinkage and errors stay invisible between counts.
Related Terms in Purchasing & Inventory
Landed Cost
The full cost of getting a purchased item into saleable position: supplier price plus freight, insurance, customs duty, handling and any non-recoverable taxes. Pricing on supplier invoice alone systematically understates true cost on imported goods.
Goods Receipt Note (GRN)
A document confirming that goods ordered via a purchase order have been physically received and inspected. Part of 3-way matching (PO → GRN → Invoice) to prevent overpayment. HelloBooks has full GRN with validation rules.
Three-Way Matching
A verification process that matches the purchase order, goods receipt note, and vendor invoice to ensure you only pay for what was ordered and received at the agreed price. Prevents fraud and errors.
FIFO (First In, First Out)
An inventory valuation method where the oldest stock is sold first. During inflation, FIFO results in lower COGS and higher reported profits compared to LIFO.
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