GRN (Goods Receipt Note) — Meaning and Purpose
A GRN (goods receipt note) is the document raised when goods arrive, recording the quantity and condition actually received against a purchase order. It is the independent confirmation that delivery happened — and one of the three documents checked in three-way matching before a vendor invoice is paid.
What a GRN Records
When a delivery arrives, the receiving team inspects it against the purchase order and records a GRN capturing:
- The purchase order it relates to, and the vendor.
- The items and the quantity actually received (which may differ from the quantity ordered).
- The condition of the goods — accepted, damaged, short-supplied, or rejected.
- The date of receipt and who received it.
Because the GRN captures what was received rather than what was ordered, it is the document that surfaces short deliveries, excess deliveries and damaged stock — the discrepancies a buyer must resolve with the vendor before paying.
Why the GRN Matters
The GRN sits between ordering and paying. Two controls depend on it:
- Three-way matching — the vendor invoice is matched against the purchase order (price and terms) and the GRN (quantity received). Payment is released only when all three agree, so the company never pays for goods it did not receive.
- Inventory and accounting — the GRN updates stock records and supports the accounting entry that recognises the goods and the corresponding liability to the vendor.
GRN in the Procure-to-Pay Cycle
The GRN is the third document in the cycle: purchase requisition (indent) → purchase order → goods receipt note → invoice and three-way match. It is also sometimes called a goods received note or material receipt note.
Frequently Asked Questions
What is the full form of GRN?
GRN stands for Goods Receipt Note — the document raised when goods are received against a purchase order, recording the quantity and condition of what actually arrived. It is sometimes called a goods received note or material receipt note.
What is the difference between a GRN and an invoice?
A GRN is an internal record of goods received, raised by the receiving team. An invoice is the vendor's demand for payment. The invoice is paid only if the quantity billed agrees with the GRN and the price agrees with the purchase order. A GRN is evidence that goods arrived, not a request for payment.
Who raises the GRN?
The stores, warehouse or receiving team raises it at the point of delivery, after inspecting the goods against the purchase order. Keeping receiving separate from purchasing and payment is a basic internal control.
What is the purpose of a GRN?
It is the independent record that delivery happened — confirming how much was received and in what condition, updating inventory, and serving as one of the three documents in three-way matching.