Stock and manufacturing glossary
GRN
Goods receipt note
A GRN (goods receipt note) is the record you make when goods arrive from a vendor, showing what was actually received, in what quantity and condition, against the purchase order. It brings the goods into stock and is what you check the vendor's bill against.
Why it matters to your business
Vendors bill for what they dispatched. You should pay for what you received. The GRN is the only record of the difference. Without it, short deliveries, wrong items and damaged goods are argued about from memory, and stock in your books is based on the vendor’s bill rather than what is on your shelf.
How it works
You ordered 100 cartons at ₹150 each. The truck arrives with 96 cartons, of which 2 are crushed.
| Cartons | |
|---|---|
| Ordered | 100 |
| Delivered | 96 |
| Rejected (damaged) | 2 |
| Accepted on the GRN | 94 |
| Still due on the order | 6 |
The GRN adds 94 cartons to stock. The damaged 2 go back with the driver, noted on the delivery copy. When the bill arrives for 96 cartons (₹14,400 before GST), you pay only for 94 (₹14,100) and ask the vendor for a credit note of ₹300 plus GST, or issue a debit note if you have already booked the bill.
Common mistakes
- Signing the vendor’s challan without counting. Count, and inspect a sample, before anyone signs for the goods.
- GRN written after the bill arrives. Make it on the day goods come in; otherwise it simply copies the bill.
- Batches and expiry not recorded at receipt. Capture them at the door. Finding them later is slow and error-prone.
- Receipts never billed. Goods received but not billed are a liability you owe. Review them monthly, especially at year end, so the goods and the amount owed both appear in the right year.
- One person doing everything. Where you can, keep the person who receives goods separate from the person who approves the vendor’s payment. Each then checks the other.
Questions about GRN
What is the difference between a GRN and a delivery challan?
The delivery challan is issued by the sender and travels with the goods. The GRN is made by the receiver after checking what actually arrived. The two can differ when goods are short or damaged.
Is a GRN required under GST?
No. GST does not require a GRN. Your input tax credit depends on having the vendor's tax invoice and receiving the goods, and a GRN is good evidence that you did receive them.
What should I do if goods arrive short or damaged?
Record only the quantity you accept in good condition. Tell the vendor at once, and ask for a bill for the accepted quantity or a credit note for the difference. If you have already been billed for the full quantity, issue a debit note.
Should the GRN show prices?
It can, but its main job is quantity and condition. Prices are checked when the vendor's bill is compared with the purchase order.
Updated .