Updated Inventory on hand

I want to know the best way to keep inventory on hand updated. (Receipt+ actual stock less sales)
All entries are done through purchase invoices. However cash sales are not itemised.
Is it normal to create a sales invoices periodically which reflects sales period?

That is one method. Search the forum. This has been discussed many times. But be careful you are not double-counting income. You do not want to be entering the cash sales into Manager and also entering sales invoices that are never paid. If you’re using some type of point of sale system, a daily summary as a receipt is the normal way to make your entries into Manager.

By using the Inventory Items tab.

Depending on the type of business this can be quite normal, as long as the two - cash sales not itemised = periodic sales invoice - reconciles.