The procurement process is detailed and involves a number of steps with many people working in each step. Communication, responsiveness and confirmations become very important in this to keep everyone on the same page. Goods received notes can help here and make your procurement process smooth and hassle-free. They keep things organized and also help form long-term relationships with your suppliers.
Moreover, you can keep track of your supply data for future requirements. In this blog post, we will understand the details of a goods received note. We will also go through the goods received note sample, and see how it is different from a goods receipt note and goods issues note.
Goods Received Note Meaning
A Goods Received Note is a document that acknowledges the delivery of the goods. It’s created when a company receives goods it ordered from suppliers. The GRN records the details of the goods received, such as the description, quantity, and any discrepancies in the order. It helps you compare the goods ordered with the goods delivered. Once you receive the goods, your store's department will inspect them and create the GRN accordingly.
They will check if the quantity of goods matches that of the purchase order. Furthermore, they will examine the physical condition of the goods. A Goods Received Note is also known as a Good Receipt Note, and Material Receipt Note. A Goods Issued Note (GIN), on the other hand, documents the issuance of goods from inventory to departments or customers, tracking the reduction in stock levels. Both notes are important for accurate inventory management and record-keeping.
Importance of Goods Received Note
If there is no record or proof of the goods delivered by a supplier, then you will have no way to report any quality issues. A GRN serves as a reference for future disputes. Plus, it also acts as an internal record for the warehouse. This is what makes Goods Received Notes important. It lets you update your inventory records based on the Goods Received Note. It is also helpful for the accounts team. It helps them release payments to the supplier based on the goods mentioned in the GRN.
Uses of Goods Received Note
A GRN is an important document and helps a business in many ways. Here are the most important uses of goods received note:
1. Validating Quality and Quantity
A GRN can be used to verify the supplier’s invoice to check whether the goods match the order. The GRN is issued to the supplier only if the goods match the description in the documents.
2. Managing stock and inventory
A material receipt note is a record of what has been received in deliveries of the supplies ordered. These supplies should be reflected in the warehouse data. The GRN helps to keep track of the inventory and fastens the entry of goods to the warehouse.
3. Validating Invoices by Matching
The three-way match process reduces billing fraud in your organization. In three-way matching, the supplier invoice gets matched with the supply request note and goods received note. It gives you confirmation of supply request note satisfaction of goods and supplier invoice.
4. Recording Future Stocks
In case of any discrepancies, conflicts and legal disputes between the goods ordered and received, the GRN serves as proof. and helps in resolving such issues. It helps you resolve the conflict with the supplier over quality and other issues.
Goods Received Note Format
A goods receipt note includes all the information that helps your organization and the suppliers to keep track of the quality and quantity of goods supplied. It also serves as a kind of binding agreement between the two parties. Let's look at an ideal material received note format and a good received note template:
- Name of both parties
- Product details including quantity, dimensions, color, etc.
- Delivery date and time
- Name and signature of the supplier
- Name and signature of the receiver
- Purchase Order number
Here is a goods received note example. You can have a look at this sample of goods received note and understand how you can implement it:
Process of Issuing Goods Received Note
Now that you have understood good receipt note meaning and GRN meaning in accounting specifically, you should understand the process of issuing a Goods Received Note (GRN):
1. Receiving the Goods: The first step in the process is the receipt of goods from the supplier. They are checked for any visible damage during transit.
2. Checking the Delivery: The delivery note that comes with the goods is checked. It includes a description of the goods, quantity, and other relevant details.
3. Inspection and Verification: The goods are then checked for quality and quantity as per the purchase order.
4. Issuing the GRN: If the goods are found to be satisfactory, a Goods Received Note is prepared. The GRN includes details such as the name of the supplier, description of goods, quantity received, date of receipt, GRN number, and signature.
5. Updating Inventory: The inventory records are updated with new goods. This update is usually done in the inventory management system of the company.
Issues with Processing of Goods Received Note
The entire procuring process is quite challenging. This means you can face challenges with processing the GRN too. Here is how you can seamlessly handle them:
1. Strong Communication
The bigger your organization gets, the more complex the internal operations become. With bigger teams, it can be difficult to communicate the issues. Miscommunication can lead to delays. Work on keeping close communication with relevant departments.
2. Turnaround Time
Usually, the store department issues the GRN immediately after the delivery of goods. However, there might be delays when there's a large quantity of goods involved. This is because of the test time before issuing the GRN. Make sure everyone is on the same page with respect to timelines.
3. Avoid Errors
There could be human errors while making the GRN. You also need three copies of the GRN for The ordering department, the procurement team, and the supplier. Additionally, you may have to send another copy to the accounts department. This helps to avoid problems later.
4. Admin Workload
Preparing and issuing GRNs is a long activity. Your team can also run into issues. With huge orders, your team can get overburdened. It can affect the overall organizational efficiency and lead to delays in GRN. Keep your team informed about upcoming orders to avoid delays or surprises.
Manage Your GRNs effortlessly with Tranzact
A GRN is very helpful for your organization. But processing it takes a lot of time and effort. To solve this, manufacturers have started using automation software that manages all your GRN requirements. Software automates everything from purchase and inventory to sales and quality assurance.
TranZact is a tool that helps with your operations tasks by taking over small but important tasks like GRN, Purchase orders and delivery challans. It is digital software that streamlines all your organization's processes from enquiry to dispatch so that you can keep your GRN-related worries aside. TranZact also helps you create a GRN. It can manage everything from procurement to dispatch. The unique thing is that it is specifically made for Indian SME manufacturers. This means that it is affordable.
FAQs on Goods Received Note
1. What is GRN meaning in accounting?
The Goods receipt note is a document that records the receipt of goods from a supplier, serving as proof of delivery and inspection.
2. What is goods received note vs delivery note?
Goods received note vs delivery order are two important documents. Goods received note is prepared by the buyer to acknowledge the receipt of a particular quantity and quality of goods from the supplier. However, a delivery note is prepared by the supplier to record the type and quantity of goods delivered.
3. Who prepares and issues goods received note?
The Goods Received Note (GRN) is typically prepared and issued by the manufacturing business. They inspect the goods and make sure that the details match with the purchase order.
4. What is a GRN process flow chart?
A GRN process flow chart is a diagram that outlines the steps involved in the issuance of a Goods Receipt Note, from receiving goods to notifying relevant departments.
