Goods Received Note

A goods received note, usually shortened to GRN, is the document a buyer creates to confirm what actually arrived from a supplier. It records the items, quantities, and condition of a delivery, and it is the piece of evidence that lets accounts payable prove an invoice deserves to be paid. Without it, three-way matching has nothing to match against and you are trusting the supplier's paperwork on both ends. This guide covers what a GRN contains, who raises it, how it feeds matching and inventory, and where the process usually breaks.

What is a goods received note?

A goods received note is a formal internal document issued by the buyer when a delivery arrives, confirming which goods were received, in what quantity, and in what condition. It is created by the receiving team, not by the supplier, which is exactly what gives it evidential weight. The GRN becomes the buyer's independent record of the delivery and the third document in three-way matching.

It is sometimes called a goods receipt note, a goods receipt, or simply a receiving report. All refer to the same thing: proof from your own side of the loading dock that the shipment showed up as ordered.

What is the purpose of a goods received note?

The purpose of a GRN is verification. It confirms that goods delivered match what was ordered on the purchase order, which protects the business from paying for incomplete, incorrect, or damaged deliveries. It enables accurate three-way invoice matching, updates inventory records with what physically arrived, and creates an audit trail for financial verification and supplier disputes.

Put plainly: the purchase order says what you asked for, the invoice says what the supplier wants to charge you for, and the GRN says what you actually got. Only the third one is written by someone in your building who looked inside the box.

What information does a goods received note contain?

A usable GRN carries enough detail to settle an argument three months later. The standard fields are:

The quantity ordered versus quantity received comparison is the single most valuable line on the document. Most invoice disputes are quantity disputes.

Who prepares the goods received note?

The receiving or warehouse team prepares the GRN, because they are the people physically checking the delivery against the purchase order. In a small business this may be whoever opens the door. In a larger operation it is a dedicated goods-in function with a scanner and a receiving terminal.

The crucial control is that the person raising the GRN is not the person who raised the purchase order and not the person who approves payment. If one individual can order goods, confirm their arrival, and release the payment, no amount of paperwork protects you. This is standard segregation of duties, and it is the reason auditors ask who signed the GRN.

What is the difference between a goods received note and a delivery note?

A delivery note is written by the supplier and travels with the shipment, listing what the supplier says they sent. A goods received note is written by the buyer after inspecting the shipment, recording what the buyer confirms actually arrived. The delivery note is a claim; the GRN is a verification of that claim.

They usually agree. When they do not, the GRN is the document that counts, because it reflects a physical count performed by your own staff. Filing the supplier's delivery note and calling it a GRN defeats the entire control.

Goods received note vs invoice vs purchase order

For a deeper look at how the first and third documents differ, see purchase order vs invoice. Teams that want to tighten the ordering step upstream often move to a system that lets them raise and track purchase orders against every delivery rather than trusting an email trail.

How does a goods received note work in three-way matching?

Three-way matching compares the purchase order, the goods received note, and the supplier invoice before authorizing payment. The PO confirms the price and quantity you agreed. The GRN confirms the quantity you actually received. The invoice confirms what the supplier is charging. If all three agree, the invoice is cleared for payment automatically. If any one disagrees, it becomes an exception for a human.

The GRN provides the buyer's independent confirmation of what was physically received, and that is precisely what makes the control effective against billing fraud. A supplier can invoice for 100 units. Only your receiving team can say that 92 arrived. Our full walkthrough of three-way matching covers the exception paths, and two-way vs three-way vs four-way matching explains when the extra inspection step is worth it.

What happens if the goods received note does not match the invoice?

The invoice becomes an exception and payment is held. Accounts payable investigates the gap: a short delivery, a partial shipment against an open PO, damaged goods returned, a pricing error, or a duplicate invoice. The resolution is either a corrected invoice, a credit memo from the supplier, or an approved override documented against the PO.

Quantity mismatches are the most common and the easiest to fix. Price mismatches between PO and invoice are more contentious, because someone agreed to a price and someone else charged a different one. Our guide to invoice exception handling covers how to triage these without stalling the payment run, and vendor credits explains how the correction gets recorded.

Is a GRN a legal document?

A GRN is not a contract, but it is a business record with real evidential value. It supports your position in a supplier dispute, underpins the accrual you post at period end, and forms part of the audit trail your accountants and auditors expect to see. In an audit, a payment supported by a PO and a GRN is straightforward. A payment supported only by an invoice invites questions.

Keep GRNs for as long as you keep the invoices they support. Our guide on how long to keep invoices covers the retention periods US businesses generally work to.

Do you need a GRN for services?

Not in the same physical form, but you need its equivalent. Services have no loading dock, so the confirmation step is a service entry sheet, a signed timesheet, or a project milestone sign-off from the person who received the work. The principle is identical: someone inside your business, other than the buyer and the approver, confirms that what was ordered was actually delivered before the invoice is paid.

Skipping this on services is common and expensive. It is the reason consultancy and maintenance spend is where most organizations discover they have been paying for work nobody can confirm happened.

How to automate the goods received note process

The manual version of this process is slow in one specific place: getting the data off the paperwork and into a system where it can be compared. Someone keys the PO number, the line items, and the received quantities from a printed sheet, then someone else keys the invoice line items to match against them. Two rounds of typing before any matching happens at all.

Automating the capture side removes both. Scan or upload the delivery paperwork and the supplier invoice, and let AI read the header fields and the full line-item table, description, quantity, unit price, and amount, into structured data. Once both documents are structured, the match is arithmetic rather than eyesight. Our invoice line item extraction page covers how the line table is captured, and purchase order data extraction handles the PO side.

Teams running AP inside a specific ledger can push the matched data straight through: QuickBooks AP automation, NetSuite AP automation, and Xero AP automation each cover the import path. If you are weighing whether to buy a platform or simply remove the keying, the AP automation software comparison is the honest starting point.

Getting the GRN right

A goods received note is a small document that carries a disproportionate amount of control. It is the only paper in the procure-to-pay chain written by someone who physically handled the goods, and it is the reason three-way matching catches short deliveries and inflated invoices before money leaves the building. Raise one for every delivery, record received quantities separately from ordered quantities, keep the receiving function separate from purchasing and payment, and make the data structured enough that the match happens without anyone squinting at a printout.

The rest of the procure-to-pay chain sits around it. Our overview of the procure to pay process shows where receiving fits between the purchase order and the payment run.