Practical guide
Purchase order to goods received note
A goods received note (GRN) is the receiving side's written confirmation of what actually arrived against a purchase order: which items, in what quantities, in what condition, on what date, checked by whom. The purchase order says what you agreed to buy; the GRN says what turned up. The gap between the two is where short deliveries, damage, and overbilling hide, which is why the GRN is the document that protects you when the vendor's invoice arrives.
Who needs this workflow
Anyone who orders physical goods and wants to pay only for what was actually delivered: warehouse and stores staff, site foremen receiving materials, workshop managers taking in parts, and small businesses where the same person places the order and signs for the box. Even a one-person operation benefits, because the GRN is the evidence you point to when a delivery is short or damaged and the vendor's invoice says otherwise.
Step-by-step: receiving against a PO
- Pull up the purchase order before opening anything. The PO is your checklist. Receiving "by the delivery note alone" means you verify the vendor's story against the vendor's own paperwork, which catches nothing.
- Count and inspect each line. Record three quantities per line: theordered quantity from the PO, the received quantity you counted, and therejected quantity (units received but refused for damage, wrong item, or wrong spec). Accepted quantity is received minus rejected.
- Note the condition per line. "Good", "carton crushed, contents intact", "6 units water-damaged" - specific wording matters if there is a claim later.
- Record the delivery details. Received date and time, location, carrier, package count and condition, and the vendor's delivery note number if one came with the shipment.
- Set the acceptance status and sign. Accepted in full, accepted with exceptions, or rejected. The person who physically checked the goods signs as receiver; if someone else inspected, name them too.
- Flag variances immediately. Anything where ordered, received, and accepted are not all equal goes to whoever pays invoices, the same day. A variance reported at receiving is a correction; one discovered at invoice time is a dispute.
Worked example: a delivery with a shortage and a rejection
PO-2041 ordered two lines. Here is what receiving actually found:
| Line | Ordered | Received | Rejected | Accepted | Unit price | Accepted value |
|---|---|---|---|---|---|---|
| Bracket, steel | 500 | 500 | 12 | 488 | 3.20 | 1,561.60 |
| Hinge, brass | 200 | 180 | 0 | 180 | 5.50 | 990.00 |
The PO value was 500 × 3.20 + 200 × 5.50 = 1,600.00 + 1,100.00 = 2,700.00. The accepted value is 1,561.60 + 990.00 = 2,551.60. Twelve brackets arrived bent and were rejected (a quantity variance of −38.40), and the hinges were 20 short (−110.00). When the vendor invoices 2,700.00, the GRN is the evidence for paying 2,551.60 or requesting a corrected invoice or credit for the 148.40 difference. Whether the vendor redelivers the missing and rejected units or credits them is a commercial decision, but either way it is resolved against the GRN's numbers, not from memory.
The three-way match
The reason GRNs exist is the three-way match: before an invoice is paid, it is checked against the purchase order (did we order this, at this price?) and the GRN (did we actually receive it?). Pay only where all three agree. Small operations do this informally by stapling the three documents together; the discipline is the same at any scale. Without a GRN, the match collapses to two documents, and you are trusting the vendor's invoice to describe your own goods receipt.
How the GRN differs from adjacent documents
- GRN vs delivery note. The delivery note is written by thesender and travels with the goods; the GRN is written by the receiverafter checking them. They describe the same shipment from opposite sides, and the GRN is the one that counts for your records. SeeGRN vs delivery note.
- GRN vs packing slip. A packing slip lists carton contents to help checking; it makes no claim about condition or acceptance. Seepacking slip vs invoice for where the packing slip sits in the paperwork.
- GRN vs inspection report. A GRN records receipt and a basic condition check; a formal inspection report records detailed testing against a specification. For goods that need one, the inspection follows the GRN.
Frequently asked questions
Who signs a goods received note?
The person who physically counted and checked the goods - a storekeeper, site foreman, or whoever accepted the delivery. If a separate person inspected quality, both names belong on the GRN. The signature matters because the GRN is a factual statement: "I checked this and this is what I found."
What if the delivery quantity does not match the PO?
Record the real numbers - never round received up to ordered "because the rest is probably coming". Note the shortage or overage on the GRN, notify the vendor the same day, and let the invoice checker decide between paying for the accepted quantity or waiting for redelivery. An over-delivery is also a variance: you are not obliged to accept or pay for units you did not order.
Can I refuse part of a delivery?
Yes. Partial rejection is the normal case: accept the good units, reject the damaged or wrong ones, and record both quantities per line. Where practical, hold rejected goods separately until the vendor collects or credits them, and photograph anything damaged.
Is a GRN legally required?
In most places it is an internal control document rather than a mandated one, but record-keeping and evidence rules vary by jurisdiction - check thecountry pages for what applies where you operate. Legally required or not, it is the cheapest insurance in procurement.
Should I raise one GRN per delivery or per purchase order?
Per delivery. A PO fulfilled in three shipments gets three GRNs, each referencing the same PO number. That keeps every receipt tied to a real date, carrier, and checker, and makes partial-delivery invoicing easy to verify.
What happens after the GRN?
The GRN joins the PO and the vendor's invoice for the three-way match, updates your stock records if you keep them, and - for goods needing a formal quality check - feeds an inspection report.
Doing this in Formnivo
Create the order with the purchase order generator, then record receipt with thegoods received note generator, which has ordered, received, and rejected quantity columns per line plus condition, acceptance status, carrier, and inspector fields. In the workspace, a GRN created from a purchase order is a linked follow-up record: it captures the PO number as its reference and can optionally carry the PO's lines as a starting checklist, but the PO's totals are deliberately not copied - the GRN's numbers are what you counted, not what was ordered. If the goods need a formal quality check, the GRN converts onward into aninspection report, and the vendor-side invoice for the order can be produced from the PO with theinvoice generator. All tools are free with no sign-up, and every document stays in local storage on your device.