Goods Receipt Note (GRN)
A goods receipt note is a document created when goods are physically received at the buyer's location, recording the quantity, condition, and details of items delivered against a purchase order.
Definition
A goods receipt note (GRN) is an internal document generated by the buyer's receiving or warehouse team when goods are physically delivered by a supplier. The GRN records the date of receipt, the quantities received for each line item, the condition of the goods, any damages or shortages observed, and the corresponding purchase order number. It serves as formal confirmation that the buyer has taken possession of the goods.
In Indian accounts payable operations, the GRN is a critical document for two reasons. First, it is one of the three documents in three-way matching (PO, GRN, invoice), providing independent verification that goods were actually received before payment is authorised. Without a GRN, there is no physical confirmation to match against the invoice, creating a risk of paying for undelivered goods. Second, under the MSMED Act, 2006, the 45-day payment clock for MSME vendors starts from the date of acceptance of goods, which is effectively the GRN date. This makes the GRN date a compliance-critical data point that determines when payment must be made.
For services rather than physical goods, the equivalent of a GRN is a service acceptance or completion certificate. The principle is the same: an authorised person confirms that the service was rendered as specified before the invoice is approved for payment. Indian businesses implementing AP automation must ensure that both goods and service receipt processes are digitised and integrated with the matching workflow.
Key Points
- Created when goods are physically received and inspected at the buyer's location
- Records quantities received, condition, damages, and corresponding PO reference
- Essential for three-way matching (PO vs. GRN vs. invoice) in accounts payable
- GRN date triggers the 45-day MSME payment deadline under the MSMED Act, 2006
- Missing or delayed GRNs are a leading cause of invoice processing bottlenecks
- Service acceptance certificates serve as the GRN equivalent for service invoices
- Digital GRN capture at the point of receipt reduces data entry delays and errors
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