Data management and integration:
Data is most frequently managed through the use of information systems and databases. A database is a collection of data that is commonly related and stored in computerized linked files. Database use is favored by many users of information systems because of the ability to manipulate the database information into database management systems. Most organizations, large and small, will have integrated some form of database management. Areas that are often tracked by databases are production, scheduling, inventory, and the general ledger. Databases are extremely important for helping a firm to identify similarities and differences, which inevitably allow the firm to operate in a more efficient and effective manor.

Database management can be used to store and access important information and financial data, by multiple departments within a given firm. They can also be used to ensure data accuracy, consistency, and completeness. Databases can be secured and can prevent access to data/information from unauthorized users. And because databases are created and stored electronically, recreating files and backing up files can be conducted with ease.

Once a database is created, the data can then be manipulated and designed to store information in a hierarchy manor, or in a manor of importance to the user. When a hierarchy of the database’s fields and tables is established, record structures and keys can be enabled to uniquely distinguish one record from the next.

The perpetual method of tracking inventory:
The perpetual method for tracking inventory is a continuous tracking method that records all purchases and sales as they occur. The following are accounting features of a perpetual inventory system:

• The purchase of raw materials for production, or merchandise for resale, is debited to Inventory (rather than to Purchases).
• Freight-in, purchase returns and allowances, plus purchase discounts are debited to Inventory (rather than separate accounts).
• Cost of goods sold is recorded at the time of the sale by debiting Costs of Goods Sold and crediting Inventory.
• A subsidiary ledger of individual records is consistently maintained and utilized as a control measure. These records specify the quantity and cost of each type of inventory on hand.

How is the perpetual inventory system different from the periodic method?
The periodic inventory system is the method used for determining the quantity of inventory on hand periodically, much less frequently than the perpetual tracking system. Once acquisitions of inventory have been accounted for during a period, the items are debited from the Purchases account. The total sum in the Purchases account is then added to the cost of the inventory on hand at the beginning of the next accounting period.

Why would a company choose one inventory tracking method over another and which method is better?
Depending on the product being sold or perhaps even the type of industry, a company may choose how to best track their inventories. Wal-Mart, for example, tracks their inventory on a real time basis (a perpetual system). This is due to the quantity and variety of the goods they sell, and their desire to keep a close eye on all of it! On the other hand, a company that provides wooden crates to grocery stores, hardware stores, supply stores etc., need only take an inventory count periodically.