Goods received notes and/or delivery notes are often a problem area for many businesses, with such things as human error, accuracy, and difficulty in referencing against orders quickly becoming an issue. As they’re often handwritten and poorly formatted, they can also pose a challenge for the indexing, scanning, and storage of files.
GRNs, meaning goods received notes, play a major part in the accounts payable process by confirming that items have been received as expected, in accordance with the original order and that the items can then be invoiced by the supplier and paid for.
Understanding GRNs is important to ensure smooth business operation, reducing time-consuming processes and potential errors. Read out to find out more about GRNs, their importance, common issues faced with them and how to overcome them.
What is a goods received note?
A goods received note (GRN) is a record of goods received from suppliers, and the record is shown as a proof that ordered products had been received. The record is used by the buyer for comparing the number of goods ordered to the ones delivered.
GRN is vital for various departments, primarily factories and stores, procurement and finance or accounting departments. It is used for stock updates and the payment of goods obtained.
What is a delivery note?
A delivery note is a document that accompanies a shipment of goods, providing a detailed list of items and products included, as well as their quantities. It serves as a proof of delivery and helps ensure that the correct goods are received in the expected condition.
A delivery note can also be known as a ‘dispatch note’ or a ‘goods received note’. Although they are normally printed, delivery notes are commonly sent digitally, by email.
Why are GRNs important?
Goods received notes serve as a vital link between the procurement process, inventory management, and financial accounting, ensuring that businesses have a clear and accurate record of their transactions. GRNs are important for the following reasons:
- Accurate inventory management: Tracking accurate inventory levels to prevent overstocking.
- Financial accuracy: By comparing the goods received to what was invoiced, businesses can ensure that they are paying the correct amount for the goods they have received.
- Quality control: GRNs will document the condition of the goods received; if they’re damaged or defective, the GRN can be used to initiate a claim with the supplier.
- Audits & compliance: Helps maintain records for regulatory processes, and to be evidence in various audits.
Common issues with GRN processing
The below common issues are mostly due to human error when processing a Goods Received & Delivery note:
- Lost paperwork and difficulty referencing against the original purchase order.
- Slow processing time.
- Accurate matching goods received against multiple purchase order line items for various departments.
- Effective and timely communication with suppliers about delivery issues.
- Supplier management and supply chain issues, for example impact of repeat orders due to invoicing problems and payment approval.
- Disputing damaged or faulty goods.
- Impact on cost due to incorrect receipt of faulty orders, incorrect amount of items, duplicate order or wrong price.
- Administrative effort required to answer enquiries from suppliers who are chasing payments or resolving queries.
As mentioned above, there are many issues with manually processing paperwork such as goods receipt notes. It can take a large amount of staff time in terms of data entry and distribution to various departments. Paper copies of notes can be mislaid, supplier payment delayed and stock control systems out of date.
Common issues with delivery note processing
Everyday delivery notes are received and signed for by a member of the team. This paperwork or electronic version arrives with goods for signature, to acknowledge goods receipt and in some instances can actually form a contract in accordance with the supplier’s terms and conditions. Delivery notes should be marked unchecked if the delivery has not been inspected or matched against the original purchase order. Any other delivery issues should also be noted.
Many issues can occur with deliveries, which need to be quickly rectified with the supplier and reflected in your payment to them. Primarily manual data entry can be a significant factor that can lead to incorrect quantities, product codes, or other details. Similarly, they may contain missing information.
Benefits of addressing GRN issues
By effectively addressing goods received note issues mentioned above, businesses can reap numerous benefits. Accurate inventory management, enhanced financial control, and strengthened supplier relationships are just a few of the advantages. Streamlining operations, simplifying audits, and increasing customer satisfaction are additional outcomes of resolving GRN problems.
Tactics to improve your GRN and delivery note processing
Before implementing solutions, it's essential to pinpoint the specific problems within your GRN process. Ask yourself, and your business, are the issues related to data entry, supplier discrepancies, or inefficient workflows? Once you’ve identified these issues, you can make changes in the operations to improve the processing of GRNs.
A few tactics include:
- Automating your processing: Leverage software that can automate and process GRN data, and integrate it with your other systems to ensure smooth processing.
- Create GRN formats: Develop standardised templates across the business to ensure consistency.
- Implement quality checks: Conduct regular audits to identify and address any issues in the process.
- Train staff correctly: Ensure that staff members are adequately trained on GRN procedures, and are adequately equipped to deal with problems if they arise.
By implementing these strategies, businesses can significantly improve their GRN processes and reduce errors, but often it is easier to incorporate a business partner such as Shredall SDS Group to ensure that the risk of error is reduced.
How we can support your business with GRNs
Shredall SDS group can help review and analyse your existing paper documents or electronic processes. We provide scanning and automated document management solutions to help reduce manual data entry and processing, saving time and money for your business.
Our experts will minimise the risk of human error as we can ensure your GRN’s are scanned correctly and managed effectively. Once scanned, we can automatically extract key information from your paperwork into a document management system so your team can search for certain keywords like dates, companies, price, product, order/purchase number etc.
