To keep your organization’s procurement process running like a well-oiled machine, you and your team must monitor processes and constantly stay on top of things. However, even streamlined operations can face issues with crucial documentation like the Goods Received Note (GRN).
The GRN is a simple two-way document between you and your supplier that verifies goods delivered and is critical for ensuring that your procurement process runs smoothly.
Many businesses use procurement management software or logistics software to handle activities, including processing the Goods Received Note. Yet, due to the complexity of this data, the process can be time-consuming and susceptible to errors.
Hence, understanding GRNs and their importance ensures smooth business operations. In this blog, we will discuss everything you need to know about GRNs.
What is a Goods Received Note (GRN) & Why is it Important?
Summarize this article for me pleaseWhat is a Goods Received Note (GRN)?
A Goods Received Note (GRN), sometimes referred to as a goods receipt note, is a two-way document that verifies that:
- A supplier has delivered goods to your organization (which includes purchase orders, supply request notes, or supplier invoices)
- Your organization has received those goods (where your procurement department can provide a Goods Received Note after quality control and confirm the delivery date of the delivered goods)
Think of it as a handshake agreement documented on paper (or, more likely, a digital record these days). It signifies that both parties have fulfilled their obligations outlined in the purchase order. Apart from being an essential part of procurement, it is also an important document for the finance department and plays a critical role in the accounts payable process.
Having proper GRN documentation helps improve overall order management and fulfillment processes and provides several benefits, such as:
- Correctly verifies received goods and confirms that the supplier delivered the exact goods you ordered. The recipient can flag discrepancies in quantity or quality immediately, preventing potential disputes later on
- Serves as a proper communication document, as the GRN outlines what was received. It thus protects you in case of any issues down the line and serves as evidence of the agreed-upon quality and quantity, preventing disagreements about the delivered goods
- Plays a vital role in a three-way matching process used to ensure accurate invoice payments. By comparing the GRN with the supply request note or purchase order and the supplier’s invoice, you can verify everything matches before settling the payment. This also helps prevent billing fraud
- Acts as a record of goods delivered, allowing you to update your inventory levels accurately. This ensures you have a clear picture of your current stock and can make informed decisions about future purchases. It also helps your accounts department validate inventory balances
Summarize this article for me pleaseImportance of a Goods Received Note
Imagine ordering a brand new office chair—the ones that have good lumbar support and spin! You are all hyped up to finally ditch that creaky old chair. When the delivery arrives, you unbox it excitedly and realize that a part is missing.
Now, if you had a quality criterion in place and ensured that you accept delivery only after validating quality, you wouldn’t have to face this stressful situation, right? This can seem trivial for smaller organizations with limited quantities to purchase, but what about larger organizations? They constantly purchase complex items in large quantities and need a process to save them from hassles and procurement bottlenecks.
With Goods Received Notes, you can simplify the stock ledger and payable process. The buyer creates a purchase order (PO) with every order placed, detailing the items they expect in the delivery. In our example, since the chair is shipped with all its parts and assembled at the office, the PO must mention all the parts required for the chair’s proper functioning.
Upon delivery, your receiving department verifies the order against the GRN and carefully checks each item’s quantity, quality, and expiry dates.
If everything matches the PO and the delivered goods are in good condition, the receiver signs the Goods Receipt Note. This confirms that the delivery company has fulfilled its obligation and that your organization has received the order.
In essence, a GRN is a vital cog in the entire procurement process, safeguarding your business by:
- Confirming order accuracy
- Preventing disputes
- Facilitating smooth invoice processing
- Maintaining accurate inventory records
Summarize this article for me pleaseEssential Information Needed in a GRN
Now that we know precisely why a Goods Received Note is crucial for your logistics and procurement processes, let us understand what a proper Goods Received Note format should look like. A standard GRN includes the following:
1. Header
- Company name: Identifies the receiving organization
- GRN number: A unique identifier for the specific Goods Received Note document
- Date: Records the date of receipt of the goods
2. Supplier information
- Supplier name: Identifies the company that delivered the goods
- Supplier contact details: May include phone number, email address, etc., for reference
- Supplier reference number: If applicable, include any reference number provided by the supplier
3. Delivery details
- Purchase order number: References the specific purchase order linked to the delivered goods
- Delivery date and time: Records the exact time of the goods’ arrival
- Delivery method: Specifies the mode of transportation of the goods (e.g., truck, courier)
- Delivery address: Specifies the address where the goods need to be delivered
- Delivery note: Captures any additional information communicated by the supplier regarding the delivery
4. Itemized list of goods
- Product description: Clearly identifies the specific items received
- Quantity: Documents the exact number of units received for each item
- Unit of measure: Specifies the unit used to measure the quantity (e.g., boxes, meters)
- Product code/SKU: If applicable, includes any product identification codes used by your organization or the supplier
5. Signatures
- Receiver signature: Confirms that a designated representative from your organization has received and inspected the goods
- Supplier signature (optional): In some cases, the supplier’s representative may also sign the GRN to acknowledge delivery
GRNs ensure everyone involved has a transparent record of the goods received by capturing this essential information in a clear and organized format. This helps streamline communication, prevent errors, and facilitate a smooth inventory management and procurement process.
Using the practical ClickUp Streamlining The Supply Chain Process Project Plan Template, you can ensure smooth operations and improve accountability for your supply chain process. The template includes custom statuses, fields, and views to help you build standardized documentation to track inventory, manage GRN, and coordinate effectively with all stakeholders.
Summarize this article for me pleaseProblems Associated With Processing GRNs
Companies often use evaluation tools and business agreement templates to manage their procurement workflow. However, you can still face some common issues, such as:
- Increased delivery completion time and delays in issuing GRNs: Processing GRNs involves manually entering information from purchase orders and delivery receipts. This can be tedious, especially for large deliveries with numerous items. Manual entries also hold up the entire procurement process as subsequent steps like invoice processing and payment authorization often rely on a completed Goods Received Note without any pre-filled forms or ready-to-use documentation
- Data entry errors: Three copies of the GRN are issued for each purchase by the ordering department, the procurement team, and the supplier. If this data entry is done manually, there can be typos and inconsistencies, creating discrepancies between purchase orders, invoices, and inventory records. For example, a typo in the number of items received on even one copy of the GRN will cause a mismatch with the purchase order, creating confusion and requiring additional time to reconcile the difference
- Difficulty tracking GRN status and invoicing delays: Paper-based Goods Received Notes, or those stored in siloed systems, are hard to access, making it difficult to track and identify any invoicing delays. Sometimes the procuring organization stores GRNs in a system separate from the purchase orders and inventory management software. This can make it cumbersome to track their progress and ensure all the information aligns
- Errors in validation or verification of received goods: Manual verification of received goods is often time-consuming and prone to human error, especially for complex orders with many items. Additionally, it raises the possibility of fraud. Without a clear audit trail, teams can have a hard time detecting discrepancies or determining if the received goods genuinely match what was ordered
- Delays in bill settlement: If the Goods Received Note has incomplete or inaccurate information, it is bound to get stuck in the approval process. This may strain relationships with suppliers and also lead to supplier invoices accruing interest. Additionally, in many cases, several departments are involved in the workflow and multiple sign-offs are required for processing the payment. This can make the overall procurement process more time-consuming
The ClickUp Inventory Management Template can help ensure your inventory is always stocked and restocked with the right materials. This ready-to-use and customizable template comes with pre-designed fields allowing you to track, organize, and update all your inventory-related data in a single location. This will ensure you do not have to worry about managing inventory levels or specific items, making it ideally suited for businesses with large or complex inventories.
Summarize this article for me pleaseOptimizing GRN Processes with ClickUp
Given the speed at which procurement processes work in any organization, traditional methods of managing GRN and other processes can be cumbersome and ineffective. ClickUp, the all-in-one productivity and project management platform, can be your secret weapon for streamlining inventory management and end-to-end business operations.
Unlike quote management software or invoicing tools that work in silos, ClickUp Docs help manage documentation for various departments. It’s like having a word processing tool within your operation management software. This feature allows you to create extensive documents per the format you need and even collaborate with others in real time so that everyone is on the same page.
Unlike several other documentation tools, Docs can be shared and edited in real time by multiple contributors; you can also embed images and links in them and link them to tasks.
Thus, you can streamline not only delivery and procurement but also your financial operations, warehouse data management, and quality control processes.
To manage your procurement process from start to finish, you can use the ClickUp Procurement Template. You and your team can easily use this template within your workspace and streamline the procurement and supply chain process. Thus, you can track, manage, and monitor all your procurement activities without needing any complex database management or visualization tools.
With everything in one place within ClickUp, you no longer have to juggle multiple tools and platforms. Plus, you can optimize all your operational and procurement processes with the following benefits:
- Eliminate manual data entry or paper Goods Received Notes using automated workflows and simplified templates for efficient procurement workflows
- Assign tasks and ownership for each stage of the delivery process using ClickUp Tasks, with fields such as ‘awaiting shipment confirmation’ or ‘delivery received.’ This guarantees that all parties involved are in agreement and gives real-time visibility into delivery progress.
- Establish clear dependencies between tasks, such as waiting for delivery confirmation, with the ClickUp Gantt Chart view. This ensures that tasks are completed in the right order, keeping your GRN process on track
- Leverage ClickUp Automations to set up automatic notifications for key milestones in the delivery process. For example, instant notifications can alert you when a shipment is confirmed or upon the arrival of goods at your warehouse. This removes the need for manual tracking and ensures timely updates for stakeholders
- Track end-to-end inventory management processes, including stocking, restocking, vendor confirmation, costs, order status, etc., with customizable ClickUp Dashboards that give essential insights into progress and hold-ups
- Streamline procurement processes using ClickUp Brain, an advanced AI-based solution that connects your tasks, projects, docs, wikis, and more. This allows you to easily compile, summarize, and analyze relevant documents and information, enabling you to see the big picture.
- Use Forms with your documentation to get specific information for your procurement process and easily collect data from your team or third-party
- Integrate your procurement processes with over 1000+ tools and platforms. This helps you effectively track and automate processes across your tech stack
With ClickUp, you can transform your GRN handling from a cumbersome task into a streamlined and efficient operation. With this critical documentation managed, you can reduce manual effort and recording errors, maintain stock levels and quality criteria, ensure timely communication between relevant departments, and resolve issues faster.
All this goes a long way in achieving business goals more efficiently.
Want to automate and streamline your entire business operations? Sign up on ClickUp for free today and experience the difference with a streamlined procurement process.
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