How inventory systems track inventory operations

Usually, an inventory system tracks all receiving and all shipping operations. Then, the system calculates an on hand quantity for each item in your warehouse as difference between received and shipped amounts.
(Qantity On Hand)=(RECEIVED - SHIPPED)
Therefore we should track all receiving and shipping operations and the inventory system will calculate actual on hand quantities for all items.What does it mean? When you receive goods in the warehouse you should enter items in the inventory system.The inventory system uses for this item receipts or receiving orders. When you send goods to customers you should enter all shipped items in the invoices or shipping orders. The system calculates sums for all received and shipped items and calculate quantity on hand for each item.It allows to have real time information about any product in the warehouse.You can print all these documents and you'll be able to send invoices to customers or check accuracy of the inventory system.