For many industries, running a successful business means you need to have a procurement process. Procurement involves obtaining or buying goods so a business can operate. It includes sourcing, purchasing, receiving, and inspecting these goods.

A well-run procurement department or process can save money and improve supplier relationships. It can also predict supply-chain disruptions by using technology to identify when and where goods might not be available in the future. This helps manage the flow of goods entering the business, minimizing the risk of running out.

An important part of this is using a goods received note. In this article, we’ll discuss the goods received note definition, what information it should include, and more.

What Is a Goods Received Note?

A goods received note is a document that verifies that a business has received goods ordered from a supplier in good order. It means your supplier has sent you everything you requested—in good condition, on time, and in the correct location.

These notes can be on paper or digitally saved. Whichever type you decide to use, make sure you have excellent record-keeping practices. Storing your goods received notes is important for: 

• Inventory management
• Compliance and risk management
• Financial accuracy
• Dispute resolution
• Quality control
• Accounting, especially in tax season
• Accountability in procurement

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Goods Received Note Uses

A goods received note has many uses for a small business, all aimed at keeping good records and accounting for supplies.

• Validating Goods Received. A goods received note’s primary purpose is to check that you’ve received all the supplies you ordered and that they’re good quality.
• Inventory Management. Goods received notes help you track your inventory so you can maintain accurate counts of what you have in stock. They prove you’ve received what you ordered, which will be reflected in stock levels. 
• Assist In Accounting. Accountants need goods received notes to verify inventory balances. They also use them to maintain the stock ledger against purchase entries.
• Issue Management. Let’s say you receive 75% of the stock you ordered. When you unpack it, you’ll issue a goods received note to your supplier stating that you’ve received a partial shipment. This helps to mitigate disputes about what you received and in what condition and quantity. 

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Where a Goods Received Note Factors in to the Procurement Process

Your business’s procurement process might follow different steps. But generally speaking, most companies more or less stick to these:

1. Identify a need.
2. Submit a purchase request.
3. Choose or onboard a vendor.
4. Negotiate the price.
5. Create a purchase order (PO).
6. Get an invoice.
7. Receive the goods.
8. Confirm a 3-way match.

Once you’ve received the invoice from the supplier and the goods you ordered at steps six and seven, you’ll issue the goods received note indicating the amount and quality delivered to you. If everything arrives as ordered, you note that in this document. 

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Why a Goods Received Note Is Essential

A goods received note is important for several reasons. Let’s explore them below.

• Verify Invoices. When making payments, the finance department needs to know that the business got all the supplies it ordered. If you’re running your operations alone, you need to verify all deliveries you receive. A goods received note can save time if there are discrepancies, too. Because the invoice date and delivery date are often not the same (it will take your supplier a few days to deliver the goods after issuing you an invoice), this document bridges the gap between the two. It verifies that what’s on the invoice is the same as what was received. Plus, it helps prevent invoice fraud and payment errors by confirming what arrived.
• Security for Everyone. The goods received note covers both the supplier and the buyer. It enables both parties to double-check the order before and after delivery.
• Save Time. Accounts payable doesn’t need to wander around or send emails to determine if the business received its goods. They can simply check the goods received against the invoice.

What Information Should a Goods Received Note Include?

A goods received note’s format is important in maintaining accurate records and ensuring you have a binding agreement with your supplier. Here’s the information they should contain:

• Supplier’s name
• Product details
• Product quantity
• Delivery date
• Purchase order number
• Receiver’s name

5 Tips to Manage Goods Received Notes Successfully

Processing a goods received note is easy when you know how. Here are some tips to ensure your process is accurate and correct: 

1. Conduct a Check During Receiving. Look to see if everything you ordered has arrived on time and in the correct place. You don’t want your store in one location to be overstocked because the supplier delivered to the wrong address.
2. Ensure the Quality and Quantity Match. Check what condition your order arrived in. You can even perform tests on some of the items depending on what line of work you’re in. For example, if you’ve ordered printer paper for the office, open up a ream and print a test page on it. This is especially important if you’re using a new supplier that you don’t trust yet.
3. Store the Goods Received Note Properly. Keep a physical or digital record of your goods received notes so you have proof of receipt in case any problems arise later on. This also helps ensure that the stock in the ledger matches what’s in your inventory. Whether you have an accounting department and a warehouse or are one person working out of your spare room, you need these documents for your records.
4. Inform the Supplier of Problems. If there’s an issue with the goods received, it’s important to notify the supplier right away. Checking supplies immediately as they come in is essential. This way, you can redress should the supplier argue about the delivery.
5. Issue Copies of the Goods Received Note. Multiple people need a copy of the note. If you’re a solopreneur, just you and the supplier need a copy. Your supplier needs a goods received note to protect itself from potential disputes and make sure the order was sent properly. If you have a larger team, accounting or procurement teams also need a copy for recordkeeping. 

FAQ

What is the Difference Between a Delivery Note and a Goods Received Note?

A delivery note comes from the supplier’s side. It is their own record-keeping document issued to the buyer that verifies that someone delivered the requested goods. It’s also known as a dispatch note or goods receipt.

In contrast, a goods received note indicates the receipt of goods on the buyer’s behalf. It’s proof that the buyer says they received all the supplies they ordered in good condition. And at the right time and location. 

In any case, the supplier and the buyer both need a copy of the note.

Who Generates a Goods Received Note?

The receiving department generates a goods received note. This could be warehouse employees, receiving clerks, or other staff allowed to accept deliveries.

Who Signs the Goods Received Note?

The buyer and the supplier must sign a goods received note. The supplier’s representative signs to confirm that they delivered the items in good order. The buyer signs to acknowledge they received the goods.

What is the Difference Between a Goods Received Note and a Service Received Note?

A goods received note is proof and confirmation of receiving goods at the time and place requested—in good condition.

A service received note confirms that the supplier provided and completed services that the buyer requested.

Both are documents generated by the buyer to cover themselves should an issue arise in the future—and to maintain good records.

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