Goods Receipt Note (GRN): Meaning, Process, and Uses

A goods receipt note (GRN), also called a goods received note, is an internal document the buyer creates when a delivery arrives, recording what was actually received and its condition after inspection. It confirms the delivered items match the purchase order and becomes the "goods received" evidence used in three-way invoice matching before an invoice is paid. The receiving team, not the supplier, creates it.

Last updated July 2026.

A GRN only works when it lines up cleanly against the purchase order it came from. If your POs arrive as PDFs, you can upload one above and get the PO number, supplier, and every line item back as Excel, CSV, or JSON in seconds, so your receiving and finance teams check deliveries against structured data instead of squinting at a printout.

What is a goods received note?

A goods received note (GRN) is an internal document a buyer creates when a delivery arrives, recording the items and quantities actually received and their condition after inspection. It confirms the delivery matches the purchase order and serves as the goods received evidence for verifying the supplier's invoice before payment. It is often described as a two-sided record: it acknowledges that the supplier delivered and that the buyer received and accepted the goods.

What is included in a goods received note?

A GRN typically includes the purchase order number, supplier details, delivery date, item descriptions, quantity ordered versus quantity received, the condition of the goods, any discrepancies such as damage or shortages, and the receiver's name and signature. Those fields are what let finance reconcile the delivery against both the order and the invoice, so the more complete the GRN, the fewer payment disputes later.

Who prepares the goods received note?

The GRN is prepared by the buyer's receiving team, warehouse staff, or storekeeper at the point of delivery, after inspecting the goods against the purchase order. It is usually approved by a supervisor or operations manager, then shared with procurement, finance, and sometimes the supplier. Keeping the person who receives goods separate from the person who raises the PO and the person who approves the invoice is a basic internal control against error and fraud.

What is the purpose of a GRN?

A GRN's purpose is to formally confirm that goods were received and inspected, so the buyer only pays for what actually arrived. It updates inventory records, provides an internal control against errors and fraud, and supplies the goods received document needed for three-way invoice matching. Without it, accounts payable is trusting the invoice alone, with no independent proof the shipment was complete and undamaged.

The GRN process, step by step

The goods receipt process is short but it gates payment, so each step matters.

1. Delivery arrives and the receiving team pulls the matching purchase order.
2. Inspect against the PO and packing slip, counting quantities and checking condition.
3. Record quantities, condition, and any discrepancies such as shortages or damage.
4. Create and approve the GRN, capturing the receiver's sign-off.
5. Update inventory or stock records so the books reflect what arrived.
6. Send the GRN to finance for invoice verification and payment.

This is the receiving stage of the wider purchase order process, sitting between the order going out and the invoice being paid.

Is a goods received note the same as a delivery note?

No. A delivery note is created by the supplier and travels with the goods as proof of dispatch and delivery. A goods received note is created by the buyer after inspecting the shipment, confirming what was actually received and noting any shortages or damage. Different issuer, different purpose: the delivery note says what was sent, the GRN says what was accepted.

What is the difference between a GRN and a purchase order?

A purchase order is the buyer's request to buy, issued before delivery, listing what is being ordered at agreed quantities and prices. A goods received note is the buyer's confirmation of what actually arrived, created after delivery and inspection. In short, the PO shows intent to buy; the GRN shows proof of receipt. To see every field on the order it references, read how to read a purchase order.

What is the difference between a GRN and an invoice?

An invoice is the supplier's request for payment, listing goods and amounts owed. A GRN is the buyer's internal proof that those goods were actually received and inspected. Accounts payable matches the two, along with the purchase order, so payment is only made for goods genuinely delivered. That comparison is exactly what a 2-way or 3-way match performs.

Is a GRN a legal document?

A GRN is primarily an internal control and accounting record rather than a contract, but it carries evidentiary weight. It documents proof of receipt, supports invoice disputes and audits, and forms part of the transaction trail. It is not itself a demand for payment like an invoice, but auditors and courts treat a signed GRN as reliable evidence that a delivery took place.

How the GRN fits three-way matching

The GRN is the third document in a three-way match. Accounts payable lines up the purchase order (what was ordered), the GRN (what arrived), and the invoice (what you are billed for), and only approves payment when all three agree within tolerance. The goods receipt also drives the accounting entry: under accrual rules the liability is recorded when goods are received, so the GRN often posts to a goods-receipt clearing account that is cleared when the invoice matches. Any leftover balance flags a discrepancy, which keeps inventory and payables accurate at period end. In accounting systems the receipt step appears as an item receipt in NetSuite or a goods receipt in SAP, while QuickBooks and Xero handle it more simply.

Where document capture removes the GRN bottleneck

The slow part of goods receipt is rarely the inspection. It is the keying: someone types the received quantities off a paper GRN, then someone else retypes the PO and the supplier invoice data so the three documents can be compared. When the purchase order arrives as a PDF, accurate purchase order line item extraction turns it into structured rows automatically, so your receiving and accounts payable teams check a delivery against clean data instead of a printout. Try PurchaseOrders free on your own PO to see the line-item data a goods receipt is checked against.

Frequently asked questions

What does GRN stand for?

GRN stands for goods received note, also written as goods receipt note. Both terms describe the same thing: the internal document a buyer creates to record and confirm the goods received from a supplier after inspecting a delivery against the purchase order.

Is a GRN required for every delivery?

Not legally, but most businesses that buy physical goods create a GRN for every delivery because it is the receipt evidence a three-way match depends on. For services with no physical delivery there is usually no GRN; a service confirmation or milestone sign-off plays the same role before payment.

What happens if the GRN does not match the invoice?

If the GRN and invoice disagree, for example the invoice bills for more units than were received, the match fails and the invoice is held for review. Accounts payable investigates the discrepancy, contacts the supplier if needed, and only releases payment once the difference is resolved or a credit is issued.