Goods received note (GRN)
A record, made when a delivery arrives, of what was actually received against a purchase order.
In short
- It is the proof of delivery used in a three-way match.
- It records quantities received, and notes damage or shortfalls.
- Goods received but not yet invoiced must be accrued at month end.
A goods received note, or GRN, confirms that ordered goods have arrived. Whoever receives the delivery checks it against the purchase order and records what came in: item, quantity, date and condition. In most systems it is an entry against the purchase order rather than a separate paper form.
Its role in accounts payable
The GRN is the second leg of a three-way match. When the supplier's invoice arrives, it is compared with the purchase order (what was agreed) and the goods received note (what arrived). If an invoice bills 100 units but the GRN shows 92, only 92 should be paid until the gap is explained.
Its role in the close
Goods often arrive before the invoice. At month end, a GRN with no matching invoice means the business has a cost it has not recorded yet. These receipts are accrued, often as "goods received not invoiced". Expenses and inventory are complete for the period. When the invoice arrives, the accrual is reversed.
Getting it done
Receipts are often recorded by warehouse or site staff rather than finance, and they are the step most often skipped. Without them, three-way matching cannot work, and invoices either wait or get paid without proof of delivery.
Worked example
A short delivery
A restaurant group orders 40 cases of olive oil at $62 a case. The kitchen manager receives 36 cases and records a GRN for 36. The supplier invoices all 40, $2,480. The three-way match flags the difference, and the restaurant pays for 36 cases, $2,232, until the remaining four arrive or a credit note is issued.