Glossary

What is a goods receipt note (GRN)?

A goods receipt note (GRN) is a document created when a delivery is received, recording the items, quantities, and condition of goods actually delivered against a purchase order. It is the proof-of-receipt used in three-way matching before an invoice is paid.

Procupy, Procurement teamUpdated 20 October 2026
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A goods receipt note (GRN) is the document the receiving team raises when a delivery arrives, recording exactly what was received and in what condition against the purchase order. It is the bridge between ordering and paying: without a GRN confirming receipt, an invoice cannot clear three-way matching.

What a GRN records

  • PO reference — links the receipt back to the original order.
  • Items and quantities received — including any short or excess delivery.
  • Condition — accepted, damaged, or rejected, with notes.
  • Date and receiver — when it arrived and who signed for it.
  • Batch / serial / expiry — important for pharmaceuticals and regulated goods.

Goods receipt note example

A PO ordered 500 litres of a solvent. The delivery arrives, but on inspection 480 litres are accepted and 20 are rejected for a damaged seal. The GRN records 480 accepted, 20 rejected. When the supplier later invoices for 500 litres, three-way matching uses this GRN to pay for 480 only and trigger a credit note for the rest.

GRN updates inventory too

Booking a GRN typically increases recorded stock and feeds metrics like inventory turnover. Accurate, timely GRNs keep stock records and AP both honest.

Why the GRN matters

  • Proof of receipt — the evidence finance needs before releasing payment.
  • Discrepancy capture — short, damaged, or wrong deliveries are caught at the dock, not at audit.
  • Inventory accuracy — stock levels update from real, verified receipts.
  • Supplier performance — repeated shortfalls or damage feed a supplier scorecard.

The GRN is the receiving milestone in the procure to pay process, sitting between the purchase order and the invoice. It is one of the three pillars of three-way matching and a key source of objective vendor management data.

Frequently asked questions

What is the difference between a GRN and a delivery challan?

A delivery challan is issued by the supplier and travels with the goods, stating what was dispatched. A GRN is created by the buyer on receipt, recording what was actually received and accepted, which may differ from the challan.

Is a GRN mandatory?

It is not legally mandatory in itself, but most organisations require a GRN as an internal control, because three-way matching and accurate inventory both depend on a verified record of receipt.

Can you pay an invoice without a GRN?

For goods, best practice is no — the GRN proves the goods were received before payment. Service purchases often use a service entry sheet or milestone acceptance as the equivalent proof.

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Related reading

Purchase order

A purchase order (PO) is a commercial document a buyer issues to a supplier to confirm a purchase. It lists the items, quantities, agreed prices, delivery, and payment terms, and becomes a legally binding contract once the supplier accepts it.

Delivery challan

A delivery challan is a document that goes with goods when they are moved. Under GST it's used instead of a tax invoice when the movement isn't a sale yet, such as goods sent for job work. In everyday use it also means the dispatch note a supplier sends with a delivery, which the buyer's stores team checks the goods against.

Three-way matching

Three-way matching is an accounts-payable control that compares three documents — the purchase order, the goods receipt note (GRN), and the supplier invoice — before a payment is approved. The invoice is paid only if quantities and prices agree across all three.

Blanket purchase order

A blanket purchase order is a single PO that covers repeated purchases of the same items from one vendor over a fixed period, usually with a total value or quantity limit. Instead of raising a new PO for every delivery, the buyer issues release orders against the blanket PO as needs come up.

PO number

A PO number (purchase order number) is the unique reference a buyer's system gives to each purchase order. The vendor quotes it on the delivery challan and the invoice so the buyer can match the bill to what was ordered and received.