What Is Goods Receipt (GRN)?
Also known as: GRN, goods received note, PO receipt, receiving, item receipt
Definition
A goods receipt, also called a goods received note (GRN), is the transaction that records material arriving against a purchase order. It increases inventory, updates open PO quantities, and usually creates an accrual until the supplier invoice is matched.
Goods Receipt (GRN) Explained
At the dock, receiving checks the delivery against the PO: item, quantity, condition, lot or serial numbers and sometimes certificates. The goods receipt then posts in the ERP. Stock rises in the receiving or inspection location, the open quantity on the PO line drops, and the system books the value as received but not yet invoiced.
SAP posts goods receipts with movement type 101 in MIGO. NetSuite records an Item Receipt created from the PO. Infor SyteLine records receipts in PO receiving, and Infor LN uses warehouse receipt processing tied to inbound orders. Odoo validates the receipt picking created from the PO. In every case the receipt links back to the PO line so the later invoice can be matched.
Receipts can be full, partial or over-delivery within tolerance. Quality-controlled items may go to a quarantine or inspection status first and move to available stock only after they pass. Lot and serial capture at this point is what makes later traceability possible.
Because the receipt is the trigger for the accrual and for the quantity side of three-way match, errors here are expensive. A wrong item, quantity or unit of measure at receipt flows into inventory value, supply and payments.
Why It Matters
- It makes purchased material visible to planning and production the moment it arrives.
- It creates the received-not-invoiced accrual that keeps the books accurate between delivery and invoice.
- It is the quantity evidence used in three-way match before paying the supplier.
- It is the best point to capture lot, serial and certification data for traceability.
In Practice
A PO line is for 1,000 pieces. The truck delivers 600, and receiving posts a partial receipt of 600 into the inspection location. The PO line shows 400 open, the accrual covers 600 at the PO price, and 20 rejected pieces are returned to the vendor later, which reduces the received quantity before the invoice is matched.
Frequently Asked Questions
What is the difference between a goods receipt and an invoice receipt?
A goods receipt records the physical arrival of material. An invoice receipt records the supplier's bill. Matching the two against the PO is called three-way match.
Can you receive more than the purchase order quantity?
Often within a set tolerance. Beyond it the ERP may block the receipt or require the PO to be revised, depending on configuration.
What happens to a goods receipt when material is rejected?
It is typically reversed or posted as a return to vendor, and the PO quantity reopens. Practices vary by ERP and quality procedure.
Related Terms
Three-Way Match
A three-way match is the accounts payable control that compares the purchase order, the goods receipt, and the supplier invoice on quantity and price before releasing payment, ensuring a company pays only for what it ordered and actually received.
Purchase Order (PO)
A purchase order (PO) is a document a buyer issues to a supplier committing to buy specified items or services at agreed quantities, prices and delivery dates. In ERP it drives receiving, invoice matching, open commitments and supply in MRP.
Traceability
Traceability is the ability to follow the history, location, and application of a part or material through the supply chain and production process, both backward to its sources and forward to every product and customer it reached.
Cycle Counting
Cycle counting is the practice of continuously verifying inventory accuracy by counting a small subset of items each day or week, rather than shutting down for one annual wall-to-wall physical inventory.
Landed Cost
Landed cost is the total cost of bringing purchased goods into inventory, combining the supplier price with freight, insurance, customs duty, tariffs, brokerage, and handling, so inventory is valued at what the material truly cost to acquire.
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