A periodic inventory system is an accounting method used to manage and track inventory levels. In this system, inventory counts are conducted at specific intervals, such as monthly or annually, rather than continuously. This approach helps businesses determine the cost of goods sold and the value of remaining inventory at the end of each period. During each counting period, businesses calculate the total inventory on hand and update their records accordingly. This method is often simpler and less costly than a perpetual inventory system, which requires constant tracking of inventory levels. However, it may not provide real-time data on stock levels.