Goods received note is an internal document prepared by the business to control and track receipt of the goods in the business warehouse. This document is considered one of the essential documents of internal control and helps track business supplies.
Detailed concept
The business needs to track in and out of the warehouse to manage the inventory. Tracking is only possible when the business has a certain mechanism to ensure the traceable flow of documents and inventory. Goods received note is considered to be an essential document in tracing the supply chain. Although it’s an internally generated document, its’ an important document to ensure the right quantity and quality of the goods received from a supplier.
The quantity of goods recorded in the GRN is taken from the purchase order and invoice received with the goods. Sometimes, an invoice may not be received with the goods. However, there is a need to mention the PO number and the invoice number on the GRN. It enables the warehouse manager to trace suppliers and other details for the supplies.
In addition to this, GRN can be used as a supportive document to update warehouse records. However, it needs an appropriate level of authorization, and an even better idea is to implement segregation of duties in terms of preparation of documents and inspection of supplies.
Benefits of generating GRN with an Automated accounting system
Following are some of the benefits of generating GRN with the automated accounting system.
- Automation helps to enhance business discipline. The information to be recorded in the GRN is obtained from different departments. The purchase order is obtained from the purchasing department and automatically compared to assess if quantity received is in line with the PO issued by the business. So, the element of automation speeds up things.
- The stock system is updated in real-time, and a warehouse system is updated on an immediate basis. Hence, the record remains ready to be used all the time.
Objectives of goods received a note.
Following are some of the objectives of forming goods received notes.
- It’s used as a supportive document to pay outstanding invoices for the suppliers.
- It acts as a quality and quantity inspecting document for the receipt of services/supplies.
- It’s a useful document in tracing suppliers and other details regarding the product.
Problems with the Goods received note.
Following are some of the problems with the goods received note.
- It involves excessive paperwork. So, it can be a time-consuming activity.
- Preparation of GRN requires input from a supplier in terms of invoice number, which may not be easily available.
- Sometimes, managers and staff may enter incorrect information leading to payment delays and other problems.
Conclusion
Goods received a note – GRN is an internally generated document essential in managing inventory and supply chain. The warehouse manager usually prepares this document at the time of receiving goods. So, GRN acts as a source document for recording the quantity and quality of the supplies.
Further, this document is also used to support paying the invoice as it ensures supplies were received within the business.
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