A goods received note (GRN) is the record in your system that confirms what was physically received against a purchase order (PO). It is the step that adds the goods to stock. If the GRN is wrong, the stock records are wrong from the moment the goods arrive.
This guide explains how GRNs work in practice, based on the receiving process in a food manufacturing warehouse that uses an ERP system. Your own system and approval steps may be set up differently.
This page explains the process. If you need a form to record a delivery at the dock, use the free Goods Received Note (GRN) Form.
The GRN is made for what was physically received
The most important rule: the GRN quantity is the quantity you actually counted, not the quantity on the purchase order and not the quantity printed on the delivery note. If the supplier sends less than ordered, the GRN shows less than ordered.
Five quantities that are easy to mix up
| Quantity | What it means | Example |
|---|---|---|
| Ordered quantity | The quantity on the purchase order. | 100 |
| Physically received quantity | What was actually counted at receiving. | 96 |
| GRN quantity | The quantity entered on the GRN. It equals the physically received quantity. | 96 |
| Remaining (open) PO quantity | Ordered quantity minus everything received on GRNs so far. The PO stays open for this balance. | 4 |
| Damaged quantity | Stock found damaged. It is not a PO shortage. It is handled through a Damage Stock Issue after management approval. | Handled separately |
What a GRN looks like: an annotated example
A GRN format differs from one system to another, but most contain the same fields. This is a made-up GRN for the delivery in the worked example below: 100 cartons ordered, 96 counted.
| Field | Example | What to check |
|---|---|---|
| GRN number and date | GRN-0412, 14 Oct 2026 | Given by the system. Quote the date or year with the number, because numbering restarts after the year is closed. |
| Purchase order number | PO-2026-0388 | The GRN is made against this PO. A delivery with no PO is held until purchasing confirms it. |
| Supplier and delivery note number | Example Foods LLC, DN 55120 | Copied from the supplier’s delivery note, so the two documents can be matched later. |
| Vehicle and seal number | Truck 4417, seal 008812 | Only where your site records them. A broken or different seal is noted before unloading. |
| Item code and description | FLR-25, Flour 25 kg bag | The code must be the one on the PO. A similar item with a different code is not the same item. |
| Unit of measure | Carton (4 bags) | Cartons and pieces mixed up gives a GRN wrong by a whole pack size. |
| Ordered quantity | 100 | From the PO. For reference only. |
| Quantity on delivery note | 100 | What the supplier says was sent. Not used for the GRN. |
| Received (counted) quantity | 96 | The quantity actually counted at the dock. This is the GRN quantity. |
| Batch / lot and expiry date | Lot 26-288, expiry 14 Apr 2027 | Recorded for every batch delivered, so a recall or expiry check can find the stock. |
| QC result | Released | Stock on hold for QC is not available to issue until it is released. |
| Storage location | Rack B-04-2 | Where the goods were put away, so they can be found and counted. |
| Received, checked and approved by | Storekeeper, QC/QA, Warehouse Supervisor | Each person signs for their own check. |
After this GRN, stock goes up by 96 and the purchase order stays open for the remaining 4. Damaged goods found at receiving do not go on the GRN as a shortage; see below. To record a delivery at the dock, use the free GRN form.
Worked example: 100 ordered, 96 received
- The purchase order is for 100 units.
- The delivery arrives and 96 units are counted.
- A GRN is created for 96. Stock goes up by 96.
- The purchase order stays open with 4 units remaining.
- When the remaining 4 units arrive, they are received against the same purchase order. The PO is then fully received and can be closed.
The open balance on the purchase order is how the missing 4 units stay visible. In this process there is no separate shortage report.
Damaged goods are not a shortage
A shortage and damaged stock are two different things and should not be recorded the same way.
- Shortage: the goods did not arrive. The GRN shows the lower quantity and the balance stays open on the purchase order.
- Damaged stock: the goods are there but not usable. A Damage Stock Issue is created for the damaged quantity, and only after management approval.
Recording damaged stock as a PO shortage makes the open PO balance wrong and hides the damage from the people who need to approve it.
GRN numbers
GRN numbers are generated by the system, not written by hand. They run in sequence from 1, and the numbering starts again after the year is closed in the system. Because the same number can appear in two different years, quote the GRN date or year together with the number when you refer to an old GRN.
Who handles and approves a GRN
In the process this guide is based on, three roles handle and approve GRNs:
- QC/QA
- Storekeeper
- Warehouse Supervisor
Who does what, and in which order, depends on your own procedures. What matters is that the quantity on the GRN matches the count, and that each person signing has checked their part.
Common mistakes
- Copying the PO quantity onto the GRN. The GRN must show the counted quantity, or stock will be overstated from day one.
- Trusting the delivery note without counting. The delivery note shows what the supplier says was sent, not what arrived.
- Closing the PO while a balance is still expected. Keep the PO open until the remaining quantity is received.
- Recording damaged stock as a shortage. Damage goes through a Damage Stock Issue after management approval.
- Wrong unit of measure. Cartons entered as pieces, or pieces as cartons, gives a GRN that is wrong by a whole pack size.
Related forms and guides
- Goods Received Note (GRN) Form to record ordered, delivered, accepted and rejected quantities, batch and expiry at the dock, then enter the GRN in your system.
- Goods receiving checklist for what to check before, during and after unloading.
- Stock record accuracy for how receiving errors show up later as stock differences.
Follow your own company procedures and system settings where they differ from this guide.