What is a Goods Receipt?
A goods receipt is an important document in any business that deals with the buying and selling of goods. A goods receipt is used to record and track the movement of goods into a warehouse from one vendor to another.
It also helps to ensure that all items being traded are accounted for. A goods receipt can also be used as a basis for settling any disputes that may arise over transactions.
Who Issues it?
A goods receipt can be issued by the buyer or the seller of the goods. The receiving party typically signs the document to confirm that they have received the goods.
What is the Difference Between a Goods Receipt and an Invoice?
Though both may seem similar as they are documents that show a transaction between two parties, there is a key difference between a goods receipt and an invoice.
A goods receipt is the document that proves the buyer has received the items they ordered, while an invoice is a document that shows how much money is owed for those items.
What is Goods Receipt in Accounts Payable?
Now that we have a clearer meaning of goods receipt, let’s look at what goods receipt means specifically in accounts payable.
A goods receipt is a document associated with accounts payable wherein the supplier of goods provides evidence that the goods have been received by the purchaser so that the payment can then be made to the supplier.
The document may also include information such as the quantity, description, and price of the goods. The document typically contains information such as the supplier’s name, contact information, product description, quantity, and cost.
What is a Goods Receipt Note (GRN)?
Usually created by the retail store’s department, a goods receipt note is a document that evidences the receipt of goods by a business. The GRN will typically list the details of the goods received, including the quantity and description of the items.
The GRN may also include information about where the goods came from and when they were received.
Uses of Goods Receipt Note
GRN is commonly used in the following situations:
- Warehouse inventory management – It is used to monitor the inventory of the warehouse to maintain the accuracy of stocks.
- Inspection of goods – It allows goods that were received by the buyer to be checked if they are according to standards and deemed acceptable.
- Future reference – It serves as a recorded document to help resolve any disputes that may happen between both parties.
- Aids in accounting – It helps the accounting department confirm inventory balances and update the stock ledger
Why is Goods Receipt Essential in Businesses?
A goods receipt is an essential document in any business because it proves that the business has received the goods that it ordered. This document can be used to track the movement of inventory and to ensure that the correct items were received.
Steps Involved in Goods Receipt Process
Below are the 5 steps in the goods receipt process:
Step 1: Identification of Goods
The first step in the goods receipt process is to identify the goods that have been received. This can be done by comparing the packing list or purchase order against the actual items that have been delivered. Once the items have been identified, they should be verified against the shipping invoice to ensure that they are all accounted for.
Step 2: Verifying Quantity and Condition of Goods
The second step is to verify the quantity and condition of the goods that have been received. This can be done by inspecting them for any damages or shortages. If there are any damages or shortages, a notation needs to be made on the shipping invoice and a claim needs to be filed with the carrier.
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The third step is to unload and place the goods in storage. This can be done by placing them in the designated area within the warehouse or onto specific shelves or racks. Once they have been placed in storage, it is important to keep track of where they are located so they can easily be retrieved when needed.
Step 4: Recording Goods Received
The fourth step is to record the goods received. This can be done by creating a physical or computer-based inventory list. Once the goods have been recorded, it is important to keep this list up to date so that it accurately reflects the current inventory levels.
Step 5: Notifying Purchasing of Goods Received
The fifth and final step is to notify purchasing of the goods received. This can be done by sending them an email or placing a purchase order in their mailbox. Once they are aware of the new inventory, they can begin the process of ordering more items to replenish inventory levels.
