The perpetual inventory valuation system is automatically activated in the system by default.

For users currently utilizing the periodic inventory valuation system and intending to transition to the perpetual inventory valuation system, please adhere to the steps outlined below.

1. How to Migrate to Perpetual Inventory

1. To activate perpetual inventory, verify that the Stock in Hand Account aligns with the actual stock value in your warehouse(s). To synchronize it, you’ll need to generate a Journal Entry for the variance amount against an expense account (typically utilized in Purchase Invoices).

2. Before activating Perpetual Inventory, verify that Stock Accounts (ledgers) are associated with the existing warehouses. The stock account for a warehouse can be configured at three levels.

   • In the Warehouse master itself
   • In the Parent Warehouse master
   • Default Stock in Hand Account in the Company master, if you maintain only one Stock-in-hand account for all the Warehouses.
3. Journal Entry to Update Stock Received but not Billed account.

   The “Stock Received but not Billed” account serves as an adjustment account that represents the value of stock for which a Purchase Receipt has been submitted, but a Purchase Invoice has yet to be generated. A Journal Entry should be established to transfer the value of open Purchase Receipts awaiting billing into the “Stock Received but not Billed” account.
4. Setup the following default accounts for each Company
   • Stock Received But Not Billed
   • Stock Adjustment Account
   • Expenses Included In Valuation
   • Cost Center
   • Activate Perpetual Inventory
5. Go to: Home > Accounting > Company

2. Related Topics

1. Accounting Of Inventory Stock
2. Perpetual Inventory