A Perpetual Inventory System is a method used by businesses to continuously track their inventory levels in real-time. This system updates inventory records automatically whenever a sale or purchase occurs, providing accurate and up-to-date information about stock on hand. It helps businesses manage their inventory more effectively, reducing the risk of stockouts or overstocking. This system often relies on technology, such as point-of-sale (POS) systems and inventory management software, to record transactions instantly. By maintaining a constant overview of inventory, businesses can make informed decisions about restocking and managing their supply chain efficiently.