You ordered 50. The truck brought 42. The invoice says 50. Without a record of what actually arrived, that gap comes straight out of your pocket, and a month later nobody remembers the truck at all. The goods receipt note is that record: the simplest and most underrated document in buying.
It is also the one small businesses skip. Purchase orders feel important. Invoices arrive whether you want them or not. The GRN is the only one of the three that nobody sends you and nobody chases you for, which is exactly why it goes missing, and exactly why short deliveries get paid for.
What a GRN is
A goods receipt note is a record, made by you, at the moment goods arrive, of what actually turned up. That is the entire definition.
It is a buyer-side document. You write it for yourself, not for the vendor. You will also hear it called a goods received note, a delivery receipt, a material receipt or a purchase receipt: same thing, different office. Nobody issues it to you. If you do not create it, it does not exist.
The reason it matters comes down to who wrote what. Of the three records around any purchase, the vendor writes the one that asks you for money. The GRN is the independent check on that claim: your own count, taken by your own person, at the moment the goods hit your floor. (For how the three fit together, see purchase order vs invoice vs GRN.)
Timing is not optional. A GRN written at 4pm from memory about a 7am delivery is a guess in a document’s clothing. The value lives entirely in the fact that someone counted while the goods were still in front of them.
What goes on a GRN
Seven fields. That is all you need, and every one of them earns its place.
- The date and time it arrived. Time matters more than people expect, because it settles “we delivered on Tuesday” arguments and it tells you whether your morning deliveries are actually arriving in the morning.
- The order this delivery is against. Without that reference the GRN is an orphan and you can never match it to anything.
- The vendor, plus the challan or delivery note number the driver hands over. Write the number down; it is the vendor’s own reference for the same event.
- The item, line by line, in the same words as the order. Not “paint” on one document and “emulsion white 20L” on the other.
- Quantity ordered and quantity received, side by side. This is the heart of the document, since a received quantity with nothing to compare it against tells you nothing.
- Condition and notes: damage, wrong grade, wrong size, torn packaging, short weight, expiry dates close. Be specific. “2 tins dented, lids intact” beats “some damage”.
- Who received and checked it. A name, not a squiggle. That is what turns your count into something you can stand behind a month later.
The most common failure is not a missing field. It is a receiver who signs the driver’s challan without counting, because the driver is in a hurry and it feels rude to make him wait. Signing an uncounted delivery is signing a blank cheque. If there genuinely is no time to count, write “received unchecked, subject to count” next to your signature, and count within the hour.
Partial deliveries are the normal case
Small businesses tend to treat a short delivery as something that went wrong. It is Tuesday, is what it is. Vendors run out of stock, split loads across vehicles, hold back items awaiting their own supplier, or send what fits and promise the rest. Any system that assumes one order equals one complete delivery will be wrong most weeks.
Keep a running balance per item
The trick is to stop thinking of an order as delivered or not delivered, and start tracking, per item: ordered, received so far, still outstanding. Take an order for 50 bags of cement and 12 tins of primer.
| Item | Ordered | Received 8 Jul | Received 12 Jul | Outstanding |
|---|---|---|---|---|
| Cement, 50kg bags | 50 | 42 | 8 | 0 — complete |
| Wall primer, 20L | 12 | 12 | — | 0 — complete |
Two deliveries, two goods receipt notes, one order. On 8 July you were short 8 bags and you knew it that morning. On 12 July the balance closed. If the vendor’s invoice for the first delivery bills all 50 bags, the gap shows up instantly, and that comparison is exactly what three-way matching is for.
Notice what this structure gives you that a single “delivered: yes/no” flag never can. On 9 July you could answer “what are we still waiting on?” with “8 bags of cement from Sharma” rather than “something from the cement order, I think”.
When to close an order short
Sometimes the balance is never coming. The vendor discontinued the item, the site moved on, the season ended, or those eight bags are simply not worth another trip. Close the order short at that point, deliberately, with a reason written down, rather than leaving it open forever.
Before you close short, three checks:
- Has the vendor confirmed in writing that the balance is cancelled?
- Does their invoice bill only what was delivered? If not, ask for a revised bill or a credit note before you pay.
- Did you need those units elsewhere? Close the order, then reorder. Do not let a closed order hide an unmet need.
An order left permanently open is almost as bad as an unrecorded short delivery. It clutters your open-orders view until you stop trusting the view at all. Every order should end, either complete or deliberately closed short.
GRN vs delivery challan vs invoice
These three get muddled constantly, particularly where the delivery challan is the everyday term. The difference is simply who wrote it and what it asserts.
| Document | Written by | Says | Travels with |
|---|---|---|---|
| Delivery challan (delivery note, packing slip) | The vendor | “This is what we sent” | The goods, in the vehicle |
| Goods receipt note | You, the buyer | “This is what we counted on arrival” | Nothing — it stays with your order record |
| Invoice | The vendor | “This is what you owe us” | Email or post, often days later |
The challan is not a substitute for the GRN, and that is the point most people miss. A challan is the vendor’s claim about what left their warehouse. It is written before loading, sometimes from the order rather than from the pallet, and it cannot know what arrived, because it was written before the journey started. Signing it confirms that a delivery happened. It says nothing about whether the delivery was correct.
Which is why the habit worth building is to count first, then sign the challan, then record your own numbers against the order. If your count differs from the challan, write the actual figure on both copies before signing and have the driver initial it. Thirty seconds of mild awkwardness at the gate, against a month of email about eight bags of cement.
Doing this without paperwork
None of the above requires a GRN book, a template, or a printer. It requires that the counted quantities end up attached to the order. The format is not the point. The link is.
The lightest version that actually works, on a phone, in under a minute:
- Count the delivery. Actually count it.
- Photograph the delivery challan, with any corrections written on it and initialled by the driver.
- Record the received quantity per item against the original order. Not in a separate notes app. Against the order.
- Add condition notes if anything is damaged or wrong, and photograph the damage.
- Note who received it.
Step three is the one that fails in practice. A photo in a phone gallery is not a record, it is an image with a timestamp and no context, sitting among four hundred others. In six weeks nobody will find it, and if they do, nobody will remember which order it belonged to.
So the only real requirement is somewhere that holds “this order, these items, this much received, on this date, checked by this person”. That can be a column in a shared sheet, a WhatsApp message to a business-only group logged against the order number, or an order board like OrderBookApp where a delivery is recorded against the order and the outstanding balance updates itself. What matters is that six weeks later, one search on the order gives you the count.
And if all of this feels like a lot of ceremony for twelve tins of primer: the whole habit is thirty seconds per delivery, and it only has to catch one short delivery a quarter to have paid for itself several times over. Where it fits in the life of an order is covered in the vendor order lifecycle guide, and the delivered stage is precisely where the GRN lives.
Keep reading
- Purchase order vs invoice vs GRN. How the three documents fit together on one order.
- Three-way matching for small businesses. Using your GRN to check an invoice before you pay it.
- The vendor order lifecycle: 7 stages from placed to paid. Where receiving sits in the life of an order.
Frequently asked questions
Is a GRN legally required?
Generally no. A goods receipt note is an internal control document rather than a statutory one. Tax rules concern themselves with invoices and, in some jurisdictions, with documents that must accompany goods in transit such as a delivery challan or e-way bill. Nobody is going to fine you for not keeping GRNs.
That said, auditors and lenders like to see them, insurers ask for them after a damaged-goods claim, and if your inventory valuation is ever questioned, receipt records are what support it. Keep them because they save you money, not because a rule says so. If you are in a regulated trade such as pharmaceuticals or food, check your own sector’s requirements, which are often stricter.
Who should sign the GRN?
Whoever physically received and counted the goods: the person at the gate, on the shop floor, or opening up in the morning. Not the owner signing later from the office, and not the driver. The whole value of the document is that it is a first-hand count.
For anything high-value, a second pair of eyes is worth the minute it costs, with one person counting and another verifying. If your team is one person, the discipline is simply to record the count before the driver leaves rather than after.
What if goods arrive damaged?
Record it before the driver leaves. Photograph the damage and the packaging, write the damaged quantity separately from the accepted quantity on your receipt record, and note it on the vendor’s challan with the driver’s initials. Damage discovered after the vehicle has gone is much harder to pin on anyone.
Then decide, on the spot if you can: refuse the damaged units and send them back, or accept them pending a credit note. Either way the number that counts is what you accepted as usable, and that is the figure the invoice should be checked against, not the total that came off the truck.