Period costs are determined by tracking the beginning inventory balance, adding purchased material and value added to inventory (labor costs), and then deducting the ending inventory. No perpetual inventory records are maintained; the GL handles tracking and reporting. Accounting records are updated periodically.

To use QAD Enterprise Applications for period costing, all inventory-related transactions are turned off in the Inventory Accounting Control (36.9.2), so that all issues, transfers, and receipt transactions do not create GL transactions. The valuation of inventory and cost of goods sold is calculated from physical inventory counts, and purchase and sales transactions from Accounts Payable. Period costing is a method usually not used by QAD Enterprise Applications customers for financial valuation.