What Is Goods Received Note?
A Goods Received Note (GRN), also known as a Goods Inwards Note (GIN), is a document used in business to confirm the receipt of goods from a supplier. It serves as a record of the goods delivered, typically listing details such as the quantity, description, quality, and condition of the items received.
The GRN is usually prepared by the receiving department or warehouse staff upon the arrival of goods. It helps ensure accuracy in inventory management by verifying that the goods received match the quantity and quality specified in the purchase order. If there are discrepancies or damaged items, the GRN may also include notes regarding such issues.
Once the GRN is prepared and verified, it is often used as a basis for updating inventory records and initiating payment to the supplier. Additionally, it serves as a crucial document for resolving any discrepancies or disputes that may arise between the buyer and the supplier regarding the delivered goods.
Process of Goods Received Note
The process of creating a Goods Received Note (GRN) typically involves several steps to ensure accuracy and accountability in the receipt of goods. Here’s a general outline of the process:
Receiving Goods: When the goods are delivered by the supplier, the receiving department or warehouse staff checks the shipment against the details specified in the purchase order. They verify the quantity, condition, and quality of the goods received.
Preparation of Goods Received Note: Upon confirming that the goods received match the PO, the receiving department prepares the Goods Received Note (GRN). This document includes essential details such as the date of receipt, supplier information, PO number, description of goods, quantity received, condition of goods, and any discrepancies or damages noted.
Verification and Approval: The GRN is then reviewed and approved by authorized personnel, such as a warehouse manager or procurement officer. They ensure that the information on the GRN accurately reflects the received goods and any discrepancies are properly documented.
Update Inventory Records: Once the GRN is approved, the receiving department updates the organization’s inventory records or system to reflect the receipt of the goods. This ensures that the inventory levels are accurately maintained and reconciled with the goods received.
Payment Processing: The GRN serves as supporting documentation for processing payments to the supplier. Accounts payable personnel reference the GRN to verify the receipt of goods before issuing payment to the supplier.
Filing and Retention: After completing the necessary documentation and processes, the GRN files for recordkeeping purposes. It may be retained for a specified period, according to company policies or regulatory requirements.
By following these steps, organizations can effectively manage the receipt of goods, maintain accurate inventory records, and facilitate seamless transactions with suppliers.
Importance of Goods Received Note (GRN) to Accountants
The Goods Received Note (GRN) holds significant importance for accountants within an organization for several reasons:
- Verification of Inventory: The GRN serves as a crucial document for accountants to verify the receipt of goods against purchase orders. It helps ensure that the quantity and quality of goods received match what was ordered, aiding in accurate inventory management.
- Recording Purchases: Accountants use the information from the GRN to record purchases in the accounting system. The details provided in the GRN, such as supplier name, quantity received, and purchase order number, are essential for accurately reflecting transactions in the organization’s financial records.
- Matching Invoices: Accountants often use the GRN to reconcile invoices received from suppliers. By comparing the details on the GRN with the supplier’s invoice, accountants can ensure that they are being billed correctly for the goods received.
- Control Over Payments: The GRN provides a control mechanism for ensuring that payments to suppliers are made only for goods that have been received and accepted. Accountants can use the GRN to verify the accuracy of supplier invoices before authorizing payment.
- Discrepancy Resolution: In cases where discrepancies or damaged goods are noted upon receipt, the GRN serves as documentation to facilitate resolution between the purchasing department and the supplier. Accountants may be involved in investigating and resolving such discrepancies to ensure accurate financial reporting.
- Compliance and Audit Trail: The GRN provides a clear audit trail for purchases and receipts, which is essential for compliance with accounting standards and regulatory requirements. Accountants rely on the GRN to demonstrate proper control and documentation of inventory-related transactions during audits.
- Cost Control: By accurately recording goods received through GRNs, accountants can track the cost of inventory and monitor expenses related to purchases. This information is valuable for budgeting, forecasting, and cost control purposes.
Overall, the Goods Received Note plays a critical role in the accounting process by providing essential documentation, facilitating the accurate recording of transactions, ensuring control over inventory and payments, and supporting compliance and audit requirements.
What information is required in a goods received note?
The key information typically included in a Goods Received Note (GRN) consists of details related to the received goods, the supplier, and the purchase order. Here’s a breakdown of the essential information commonly found in a GRN:
Date: The date when the goods were received.
GRN Number: A unique identification number assigned to the Goods Received Note for tracking and reference purposes.
Supplier Information:
Name of the supplier from whom the goods were received.
Supplier’s address and contact details.
Purchase Order (PO) Information:
Purchase order number.
Date of the purchase order.
Any other relevant details from the purchase order.
Description of Goods:
Detailed description of the goods received, including product names or codes.
Specifications or any other relevant details.
Quantity Received: The quantity of each item received, typically specified in units or measurements as per the purchase order.
Condition of Goods:
Any notes regarding the condition of the goods upon receipt, such as damages or discrepancies.
Details of any rejected items or discrepancies observed compared to the purchase order.
Authorized Signatures: Signatures of the authorized personnel responsible for receiving and verifying the goods.
Comments or Remarks: Any additional comments or remarks relevant to the receipt of the goods, such as special instructions or observations.
Department/Location: Information about the department or specific location within the organization where the goods were received.
Quality Assurance/Inspection: Details regarding any quality checks or inspections conducted on the received goods, if applicable.
Barcode/Serial Numbers: If applicable, barcode or serial numbers associated with the received items for inventory tracking purposes.
By including these key pieces of information, the Goods Received Note provides a comprehensive record of the goods received, facilitating accurate inventory management, accounting, and reconciliation processes within the organization.
Conclusions
Goods Received Note (GRN) is the concrete evidence of receiving goods. It ensures that goods received are properly ordered by the purchase manager. It reduces the chances of using the material for personal purposes because it is properly documented by GRN and included an in-store ledger. One of the important matters is the number of GRN should be pre-numbered otherwise proper control will lapse. Goods received note (GRN) should be triplicated form. One copy should give to the supplier, one copy forwarded to the accounts department of the company for bill processing and one copy should retain by the store manager for their documentation.