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.
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 cycle, 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.