Goods Received Note (GRN) and Three-Way Matching: Free UK Template

By Linda Garrould · 3 October 2026

A goods received note (GRN) is the buyer’s own record of what actually arrived: what was counted, what was accepted and what was turned away. It is the middle document of a three-way match. Before you pay a supplier, you check the purchase order, or PO (what you ordered), the GRN (what you received) and the invoice (what you are billed) against each other, and pay only when all three agree.

Free downloads, no sign-up: Word GRN template · Excel GRN log and three-way match checker

What is a goods received note?

A goods received note is a document your business creates when a delivery arrives, recording what was received against a purchase order: the items, the quantities counted, their condition, what was accepted, what was rejected and who checked them. It is raised by the buyer, usually whoever handles goods-in, not by the supplier.

You will also see it called a goods receipt note, a goods received voucher (GRV) or a goods inwards note. In accounting systems it is often shortened to GRN or “goods receipt”, and the stock and accounts entries hang off it: the goods go on to your stock records and a liability to pay the supplier is recognised for what you accepted, not for what was ordered.

No UK law requires a document called a GRN. What the law and HMRC do care about is that you can show what you bought and received, which is why a short, dated, signed record of each delivery earns its place even in a two-person business.

What is three-way matching?

Three-way matching is the check you make before paying a supplier invoice: the quantity and price on the invoice must agree with the purchase order and with the goods received note. If the three agree, or differ by less than a tolerance you have set, the invoice is approved. If they do not, it is held until the difference is explained, corrected by a credit note or the missing goods turn up.

Each document answers a different question, and each is produced by a different person, which is the point. The purchase order is your commitment; the GRN is evidence from someone who saw the goods; the invoice is the supplier’s claim. An invoice that agrees with both is very unlikely to be a mistake or a fraud. One that agrees with the purchase order but not the GRN is the classic overbilling case: you are being charged for what you ordered rather than for what came.

Delivery note, GRN, proof of delivery, invoice: which is which?

The common mistake is to treat the signed delivery note as the GRN. A signature on the supplier’s paperwork shows that something arrived; it is not your independent count. If you cannot check the goods while the driver waits, sign “not examined” beside your name rather than “received in good condition”. It will not guarantee a claim, but it avoids signing the point away.

What goes on a goods received note?

A GRN needs enough detail for someone in accounts, who never saw the delivery, to match it to the order and the invoice. The Word template below carries these fields:

• A unique GRN number, in sequence (for example GRN-2026-0017). Never restart or reuse numbers.
• The purchase order (PO) number it relates to, exactly as on the PO (for example PO-2026-0042, using the format from our free purchase order template).
• The supplier and the supplier’s delivery note number.
• Date and time received, the site, the carrier and the number of packages.
• For each PO line: description, quantity ordered, quantity on the delivery note, quantity counted, quantity accepted, quantity rejected and the reason.
• Who received and counted the goods, and ideally a second checker, with signatures and dates.
• The date it was passed to accounts.

Prices are deliberately not on the GRN. Goods-in confirms quantity and condition; price is checked against the purchase order at the matching stage, by someone else.

Example: the first two lines of GRN-2026-0017 (fictional, from the worked example below)

How to check a delivery and raise a GRN

1. At the door, count the packages against the delivery note and look for visible damage. If you cannot check the contents before the driver leaves, sign “not examined”.
2. Unpack and count each line the same day. Write down what you counted, not what the delivery note says.
3. Inspect for damage, wrong items and wrong specification. Photograph damage before you move it.
4. Decide what to accept. Record accepted and rejected quantities and a reason for every rejection. Keep rejected stock apart so it is not used by accident.
5. Tell the supplier in writing, quoting the PO number and their delivery note number. Your terms or theirs may set a short deadline for reporting shortages or damage, so check the contract.
6. Raise the GRN with the next number in your sequence and pass it, or a scan, to whoever approves invoices.

Two rules save most of the confusion later. Raise one GRN per delivery, not per order: a PO delivered in two drops has two GRNs, both quoting the same PO number. And for services, where there is nothing to count, replace the GRN with a short written confirmation that the work was done, by whom and when, and match the invoice against that.

Short, over or damaged: your rights under the Sale of Goods Act 1979

For business-to-business sales of goods the main rules sit in the Sale of Goods Act 1979, which applies across the UK with some differences in Scotland, and they explain why the GRN matters on the day:

• Short delivery. If the supplier delivers less than the contract quantity, you may reject the delivery; if you accept it, you pay for what you received at the contract rate (section 30(1)).
• Over-delivery. If they deliver more, you may keep the contract quantity and reject the rest, or reject the whole delivery (section 30(2)).
• The “slight” exception. A business buyer cannot reject on quantity where the shortfall or excess is so slight that rejecting would be unreasonable, and it is for the seller to show that (section 30(2A) and (2B)).
• Acceptance by delay. Signing for a delivery you have not had a reasonable chance to examine does not by itself count as accepting the goods (section 35(2)). Keeping them for more than a reasonable time without telling the supplier you reject them does (section 35(4)), so report problems promptly and in writing.
• Partial rejection. Accepting some goods does not by itself stop you rejecting others that are faulty, so you can keep the good items and send back the damaged ones (section 35A).

Your contract terms can change some of this, so the written terms with each supplier come first. The practical point holds everywhere: a GRN that records the shortfall or damage on the day is your evidence, and an invoice approved without one quietly accepts whatever the supplier says it sent.

General information for UK businesses, not legal advice. For a disputed delivery of any size, read your contract terms and take advice.

How three-way matching works: a worked example

Harbour & Vine, a small online homeware business (a fictional example we use across this site), orders packaging from a supplier on purchase order PO-2026-0042. Delivery arrives on 14 September 2026 and is checked on GRN-2026-0017. The invoice, INV-88123, arrives two days later. The matching tolerance is 2% of the line’s value at the PO price, or £25, whichever is smaller.

Paying the invoice as presented (£752.70) would have cost £37.10 more than the £715.60 the business owed. £36.10 of that sits on the three held lines; the remaining £1.00 on the tissue paper is inside tolerance and is paid, which is the trade-off a tolerance makes. That is a small number on one delivery and a meaningful one across a year of them, which is the real case for matching: not catching fraud, which is rare, but catching the routine short deliveries, crushed boxes and unannounced price rises that otherwise get paid without anyone noticing. The fix is to pay the matched lines and ask the supplier for a credit note for the held ones, quoting the GRN.

Matching tolerance: how close is close enough?

A matching tolerance is the difference you are prepared to pay without investigating. Without one, someone spends twenty minutes chasing a 3p rounding difference; with too generous a one, real overcharges slip through. There is no legal or accounting standard figure: accounts-payable software suppliers quote examples such as 2% or a fixed £ amount, but the right number is the one your business decides it can write off.

Two rules work well for a small business:

• Use the smaller of a percentage and a cap. 2% or £25 per line, whichever is smaller, means a £1.24 allowance on a £62 line and £25 on a £5,000 one, so large orders do not get a large free pass.
• Give quantity no tolerance at all. If you are billed for more units than you accepted, hold the line, whatever its value. The exceptions are goods sold by weight or length, where you should agree a margin with the supplier in writing.

Check the VAT separately from the match. Line values are compared net of value added tax (VAT), then the invoice is checked for the right VAT rate and a VAT number, because only a valid VAT invoice lets you reclaim the VAT.

Two-way, three-way or four-way matching?

Most small businesses need two methods, not one: three-way for goods and two-way, with a sign-off, for services. Four-way is worth adopting only where you already inspect or test deliveries.

Who should sign what in a small business?

The control works because no single person can order something, confirm it arrived and approve the payment. That separation is called segregation of duties, and in a firm of five people it is rarely perfect. Aim for this:

The one combination to avoid at any size is the same person raising the order, confirming the delivery and approving the invoice for payment. It is the pattern behind most small-scale supplier fraud, and it removes the independence that makes the GRN worth having.

How long to keep GRNs, and why matching should not make you pay late

HMRC lists “orders and delivery notes” among the business records VAT law requires you to keep, and says you must generally keep them for at least six years (VAT Notice 700/21, sections 2.3 and 2.4). A scan is acceptable if it shows all the detail of the original (section 6). Keeping the PO, delivery note, GRN and invoice together, under the same PO number, makes this a filing habit rather than a project.

Matching must not turn into a reason to pay late. Where no payment date is agreed, a commercial payment is late 30 days after you receive the invoice or the goods, whichever is later, and the supplier can then claim statutory interest at 8% above the Bank of England base rate, plus a fixed sum of £40, £70 or £100 depending on the size of the debt (GOV.UK: late commercial payments). So pay the matched lines on time, hold only the disputed ones, and tell the supplier straight away which lines are held and why. The Commercial Payments Bill, going through Parliament in 2026, would cap most business-to-business payment terms at 60 days; it is not yet law, so check GOV.UK before relying on it.

What is “goods received not invoiced”?

Goods received not invoiced (GRNI) is the value of goods you have accepted but not yet been billed for. If goods arrive before the invoice, you owe for them even though no bill has been posted, so many businesses list every GRN without a matched invoice at month end or year end and include its value as an accrual, so that stock and costs are not understated. In the Excel checker these are the lines showing Awaiting invoice; their value, quantity accepted × PO price, is totalled at the top of the sheet. In the Excel worked example, the six address labels still owed arrive a week later on a second GRN, GRN-2026-0021, quoting the same PO; until the supplier invoices them they show as Awaiting invoice, £25.20, which is the GRNI figure.

In double-entry terms: when the goods are accepted, debit stock (or purchases) and credit a GRNI accrual; when the matched invoice is posted, debit the GRNI accrual and credit trade creditors (the supplier’s account). Your accounting package or accountant may handle this differently, so follow their set-up.

When spreadsheets stop working

A paper GRN pad and the Excel checker are enough for most businesses raising up to a few dozen purchase orders a month. You will know it is time to move on when matching takes longer than an hour a week, deliveries arrive at more than one site, or the same supplier is regularly short and nobody notices until the year-end stock count.

1. Spreadsheet and paper (free): the templates on this page.
2. Your accounting package’s purchase orders. Most small-business packages let you raise a purchase order and convert it into a bill, which gives you two-way matching. Few record a separate goods receipt, so three-way matching usually needs an inventory add-on.
3. Inventory or warehouse software that books goods in against the PO and passes the receipt to accounts. See our guide to warehouse management systems for small businesses.
4. A dedicated purchase-to-pay system, which handles approvals, goods receipts and automatic matching. Worth it once purchasing involves several approvers or sites.

Goods received notes and three-way matching: questions

Updated 3 October 2026 · Linda Garrould · General information for UK businesses, not legal or accounting advice.