What Is a Goods Received Note and Why Do You Need It

This blog explains the importance of Goods Received Notes (GRNs) in inventory and procurement management and how using them efficiently improves accuracy and workflow.

Close-up of hands with clipboard and pen during inspection

When managing inventory, accuracy is everything. A Goods Received Note (GRN) is a crucial document that helps businesses confirm the receipt of items from suppliers. It serves as proof that goods were delivered as ordered, helping keep your records accurate and up to date.

Whether you're managing stock in a warehouse or tracking deliveries for a small business, using a GRN can improve your inventory management process and reduce costly errors. By verifying that what you receive matches your purchase order, you can prevent supply chain disruptions and avoid discrepancies that lead to wasted time or lost revenue.

Key Takeaways:

  • A goods received note is crucial for verifying deliveries and managing inventory.
  • It helps ensure that your business records are accurate and up-to-date.
  • GRN is essential for maintaining a smooth and efficient supply chain.
  • Using a GRN can help prevent discrepancies and potential losses.
  • It plays a vital role in procurement and inventory management processes.

What Is a Goods Received Note?

A Goods Received Note (GRN) is an internal document used to confirm the receipt of goods from a supplier. It plays a vital role in maintaining accuracy across procurement, inventory, and finance workflows.

Here’s what a GRN does:

  • Confirms delivery of goods from a supplier, verifying both quantity and condition.
  • Acts as a formal record of goods received, matching against the original purchase order.
  • Supports the accounting department by aiding in invoice verification and maintaining a clear audit trail.
  • Helps ensure your business only pays for goods that have actually been delivered and accepted, reducing billing errors and improving the billing cycle.

A GRN can be matched against purchase orders and supplier invoices to prevent billing errors, delays in the billing cycle, or discrepancies that may affect cash flow.

While some may confuse it with a delivery note, the two are distinct. A delivery note is provided by the supplier or courier during shipment. In contrast, a GRN is generated by the buyer to acknowledge and confirm the goods receipt.

For businesses—especially those relying on small business invoicing solutions—maintaining accurate GRNs contributes to smoother operations, better stock level control, and more reliable financial records.

Key Elements of a Goods Received Note

A Goods Received Note (GRN) is more than just a confirmation slip—it’s a critical part of your workflow that ensures accuracy in inventory, purchasing, and payment processes. To serve its purpose effectively, every GRN should include the following essential elements:

1. Supplier and Receiver Information

Accurate identification of both parties is vital. The GRN should clearly list the supplier’s and receiver’s names, addresses, and contact details. This information ensures traceability and supports clear communication about the goods delivered.

2. Purchase Order Number

Each GRN should reference the original purchase order number. This helps link the received items to the order that was placed, streamlining the verification of received goods and simplifying follow-ups or disputes.

3. Description and Quantity of Goods

A detailed breakdown of the received items is essential. This includes product names, item codes, unit descriptions, and quantities. Recording this information allows businesses to confirm that the goods delivered match what was originally ordered and supports accurate data entry into inventory systems.

4. Date of Receipt

The date the goods were received must be documented. This helps with inventory turnover tracking, supports financial records, and is crucial for timing the payment of goods.

5. Receiver’s Signature

A signature from the person who received the goods serves as formal acknowledgment that the delivery has been checked and accepted. This is an important step in the verification of received items and protects your business in case of discrepancies.

Once your goods are received and verified, the next step is invoicing. If you’re still using spreadsheets or manual tools, try Tofu—the mobile invoicing app built for professionals. Create and send polished invoices in seconds, stay organized, and reduce late payments with ease.

How to Create a Goods Received Note: Step-by-Step Guide

A well-structured Goods Received Note (GRN) doesn’t just document deliveries—it helps streamline your entire inventory workflow. Here's how to effectively create and use a GRN as part of your day-to-day operations.

Step 1: Start with a Standardized GRN Template

Begin with a clean, professional GRN format that includes space for essential fields like the purchase order number, delivery date, supplier details, and item descriptions. Whether you use paper or a digital system, consistency is key for smooth data entry and future referencing.

Step 2: Match the Goods to the Purchase Order

As the goods are delivered, compare them against your original purchase order and the supplier’s delivery note. Confirm that the received items match in quantity, type, and condition.

  • Check each product line for accuracy.
  • Flag any discrepancies or visible damage immediately.
  • Take photos if needed for internal records.

Step 3: Document Any Issues or Variations

If there’s a mismatch between what was ordered and what was received, record it clearly on the GRN. This could include:

  • Shortages or overages.
  • Damaged goods.
  • Delivery of incorrect items.

Capturing these issues early supports a smoother payment of goods process and reduces the risk of accounting disputes later.

Step 4: Confirm Receipt and Finalize the GRN

Once the verification of received goods is complete, the receiving party should sign off on the GRN. This step formally confirms that the goods delivered were reviewed and accepted (or noted with exceptions).

You can then file the GRN alongside the purchase order and supplier invoice, creating a full audit trail for your accounting department and ensuring clarity throughout the billing cycle.

Send field-service invoices onsite and get paid before leaving the job.

Invoice On-Site

Goods Received Note vs Delivery Note: What’s the Difference?

In business logistics, it’s easy to confuse a delivery note with a Goods Received Note (GRN)—but these two documents play very different roles in the inventory process. Understanding how they differ is key to keeping your workflow, inventory balances, and payment of goods accurate.

What Is a Delivery Note?

A delivery note is a document created by the supplier or carrier at the time of delivery. It travels with the shipment and is handed to the recipient as proof of delivery. The delivery note typically includes:

  • Supplier and recipient details.
  • Delivery date and time.
  • List of goods delivered.
  • Quantities received, based on what was shipped.

However, a delivery note does not confirm whether the items received match the goods ordered, nor does it verify their quality and quantity. It’s simply a record from the supplier’s side that goods were dispatched and delivered.

Key Differences Between a Delivery Note and a Goods Received Note

Feature Delivery Note Goods Received Note (GRN)
Created By Supplier or delivery partner Buyer or receiving team
Purpose Acknowledges goods delivered Confirms acceptance and condition of items received
Timing Issued with the shipment Completed after inspection of delivery
Includes Delivery date, quantities received, item descriptions Issues found, comparing the GRN with the original purchase order
Use Case Logistics and shipping confirmation Internal verification and proof of receipt for finance and inventory teams

Mixing up a delivery note with a GRN can lead to inaccurate stock records, confusion in audits, or even overpayment for undelivered goods. Businesses should always generate and archive both documents to support:

  • Accurate data entry into inventory systems.
  • Cross-checking with supply request notes.
  • Smooth coordination between warehouse, purchasing, and the accounting department.

Why Goods Received Notes Are Essential for Inventory Management

An effective Goods Received Note (GRN) is more than just paperwork—it’s a vital part of your order management and inventory control process. Whether you’re running a small warehouse or overseeing multiple supply deliveries each week, managing the receipt of goods accurately is key to operational success.

A goods receipt note provides confirmation that the receipt of goods has occurred as expected. By documenting what items arrived, their condition, and the quantities received, the GRN acts as a checkpoint between suppliers and your internal systems. A received note is a critical reference used by both your warehouse and accounting department.

Here’s why GRNs are essential for managing inventory:

  • Ensure Accurate Inventory Balances: GRNs automatically update your stock ledger when goods are received. This helps avoid stockouts or overstocking, ensuring that real-time data reflects the current inventory situation. By connecting GRNs directly to inventory systems, companies significantly improve data accuracy, helping avoid stockouts or excess stock while ensuring real-time visibility.
  • Verify Deliveries Against Orders: A standard GRN allows staff to verify that the goods ordered match what was delivered, both in quantity and quality. This improves accuracy when processing a goods received entry into your systems.
  • Support for GRN Management & Auditing: Effective GRN management helps track every delivery and supports financial transparency. GRNs are a core part of audit trails and can be used to resolve supplier disputes or invoice mismatches.
  • Reduces Manual Errors: By minimizing manual data entry, a digital or template-based GRN system helps cut down on mistakes and speeds up warehouse operations. Automated receipt scanning can reduce processing time from minutes to seconds, freeing staff to focus on more strategic tasks. Moreover, 66% of warehouses are transitioning from paper-based processes to automation to boost inventory visibility and reduce errors.
  • Foundation for Smarter Decision-Making: GRNs contribute critical data that supports smarter purchasing and inventory decisions. With clear insights into what was actually received, businesses can optimize reorder points and supplier evaluations. Companies that integrate GRN data into inventory optimization have cut inventory by up to 25% and improved cash flows by over 50% within two years.

A consistent, standard GRN process ensures better communication between your warehouse, procurement, and finance teams. It links the receipt of goods with the original purchase order, confirms delivery compliance, and strengthens your inventory records across the board.

Send field-service invoices onsite and get paid before leaving the job.

Invoice On-Site

Legal and Compliance Considerations for Goods Received Notes

While GRNs are essential for tracking inventory, they also play a critical role in financial accuracy and legal compliance. Properly maintained goods receipt notes help protect your business during audits, support accurate accounts payable processes and workflows, and reduce the risk of invoice fraud.

In this section, we’ll focus on why GRNs matter for compliance and how to ensure yours meet necessary legal and procedural standards.

Why GRNs Matter for Legal and Financial Compliance

  • Supports Accounts Payable Accuracy: Before invoices are approved for payment, a GRN provides proof of goods received, confirming that items were delivered in the correct quantity and condition. This ensures businesses only pay for what was actually delivered and helps avoid overbilling or fraudulent charges.
  • Forms a Reliable Audit Trail: During audits, goods receipt notes serve as legal documentation that backs up inventory and financial records. Auditors use GRNs to verify that received goods match purchase orders and payments, strengthening your organization’s audit trail.
  • Reduces Risk of Disputes and Fraud: A signed and properly authorized GRN can help resolve conflicts with vendors and suppliers. In the event of a delivery dispute or legal challenge, it acts as a concrete record of the receipt of goods and the condition in which they were received. With nearly 37% of companies conducting internal compliance audits annually, making robust GRN practices pivotal for audit preparedness has become more critical than ever.

GRN Best Practices for Compliance

To ensure your GRNs meet compliance standards and reduce operational risk, businesses should follow these best practices:

  • Complete and Accurate Documentation: Use a standard GRN format that includes all required details: supplier information, goods description, quantities received, delivery date, and the name/signature of the receiver.
  • Authorized Sign-Off: Only trained, designated personnel should complete and sign off on GRNs. This adds a layer of control that helps detect errors or fraudulent deliveries.
  • Secure and Accessible Storage: Store GRNs in an organized, easily searchable system—ideally digitized—so they’re readily available during audits or financial reviews. This also helps reduce reliance on manual data entry.
  • Policy Reviews and Updates: Regularly review your GRN management process to stay current with changing tax laws, procurement regulations, and internal order management procedures.

By following these best practices, your business can strengthen financial accuracy, reduce legal exposure, and ensure every goods receipt note supports operational transparency and compliance.

Final Thoughts: Managing Goods Received Notes Effectively

Efficient handling of Goods Received Notes (GRNs) is essential for keeping inventory accurate, preventing errors, and building a more reliable supply chain. A well-managed GRN process helps you confirm deliveries, track inventory levels, and maintain a clear audit trail—all of which are crucial for operational and financial success.

But GRNs are just one part of a much larger workflow. Once goods are received and verified, the next critical step is managing invoices.

That’s where many small businesses struggle, especially when relying on manual tools like PDFs or spreadsheets. If your team is still chasing down documents or juggling outdated billing systems, it’s time to simplify the process.

Tofu can help you with that. Tofu is the all-in-one invoicing solution — available on mobile and web — built for small business owners who want a faster, more professional way to handle their billing cycle.

With Tofu, you can:

  • Send invoices in seconds: Create and send beautiful, professional invoices right from your phone. No more clunky Word docs or PDFs.
  • Save hours every week: Streamline your billing workflow so you can focus on running your business, not chasing payments.
  • Look more professional: Impress clients with clean, branded invoices that show you take your business seriously.

Ready to upgrade your invoicing workflow? Use Tofu on mobile or web and start invoicing smarter.

FAQ

Why is a goods received note important in the procurement process?

A goods received note is important because it confirms that the goods you ordered have been delivered and received as expected. It acts as a key document for the procurement department to verify deliveries and update inventory accurately, ensuring smooth order management and preventing discrepancies.

Who is responsible for creating the goods received note?

Typically, the procurement department or the receiving team creates the received note, documenting the details upon delivery. This document then serves as proof for the finance department to process payments and maintain accurate financial records.

What information should an efficient GRN contain?

An efficient GRN should include supplier details, description, and quantity of goods received, delivery date, purchase order number, and a signature from the person verifying the delivery. This ensures clarity and accountability throughout the procurement process.

How does a goods received note support the finance department?

The finance department relies on the goods received note as a key document to confirm that invoices match the goods you ordered and were properly delivered and received. This helps prevent overpayment and invoice fraud.

Can a goods received note help improve inventory management?

Yes, the importance of goods received notes lies in their role in keeping accurate stock records. They help track inventory levels in real time, allowing businesses to maintain balanced stock and avoid shortages or overstocking.

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

Unlike delivery notes, which are usually issued by suppliers or carriers, a goods received note is a document created by the receiver. It verifies the quality, quantity, and condition of the goods delivered and received and plays a crucial role in internal verification and record-keeping.

Send field-service invoices onsite and get paid before leaving the job.

Invoice On-Site

Send field-service invoices onsite and get paid before leaving the job.

Invoice On-Site