A consistent supply of products is necessary for a business to function at a steady pace. Choosing the right vendor and procuring products at the right time for your business is thus a critical task.
So, why should businesses emphasize procurement?
Procurement will have a direct impact on your revenue, and one flawed procurement process can cost you dearly. Fortunately, a GRN can help eliminate discrepancies that occur during procurement.
A GRN contains several important pieces of information regarding procurement. It can help you cross-check your product’s quality and manage your inventory to meet your business demands.
A GRN can also streamline your procurement and accounts payable process. This blog covers everything you need to know about GRN and how it can increase your revenue.
GRN, stands for Goods Received Note is a two-way document sent to the supplier/vendor by the buyer. Also called a delivery note, it acknowledges that the goods have been delivered and the customer/buyer has received them.
Later, the supplier will attach the GRN to the invoice and send it back to the buyer. Customers can use it to manage their inventory and for accounts payable purposes.
Primarily, you need a GRN because it acts as proof of transaction between the buyer and supplier. Here are some of the other reasons why you need a GRN:
To ensure accurate deliveries, buyers can use the GRN to compare the supplied product to the original purchase order. It will be instrumental in preventing incorrect delivery when the goods are similar.
A GRN is sent not just to notify suppliers about the delivery but also to play a major role in quality validation.
Once items are received, the customer can thoroughly check the quality of the received products. After a quality check, the customer can send a GRN to the supplier to inform the received items are of good quality.
GRNs can thus facilitate these types of acknowledgments as well.
Your account team can calculate the expenditure by referring to the GRN; they don’t need to visit the warehouse every time. Likewise, the supplier can easily create an invoice using the GRN.
A GRN can thus help you keep track of your products and act as proof to avoid discrepancies in the long run.
We discussed some of the major reasons you need GRN; now, let's look at its uses in general.
One of the primary uses of GRN is to confirm that the ordered items have been delivered successfully; the GRN acts as a closure to a transaction.
A GRN acts as a vital record that both the supplier and the buyer can use for future reference or during the next procurement cycle.
A GRN tells suppliers that their staff has delivered the product and there were no issues or breakage of products during transportation.
Further, once they get a GRN, suppliers can start preparing their invoices.
A GRN aids in inventory tracking and therefore helps in proper inventory management. It helps the buyer keep a check on their inventory levels and effectively manage restocking.
Further, GRNs assist inventory managers by helping them cross-check the received products with ordered products to prevent the entry of authorized goods into their inventory.
GRNs are a boon for accounting teams. They can validate inventory balances and verify purchase entries on the stock ledger. GRNs provide all the essential accounting details without them having to ask for procurement details from the warehouse or managers.
Details of GRNs vary from business to business based on their needs, but the key information remains the same no matter the business type:
The GRN format is decided by the business purchasing goods. It might typically look like this:
A GRN must be stamped and signed by both the store’s department manager and the one who verifies the received order.
The procurement process will have shortcomings from time to time; it is part of the process. A smart practice is to anticipate the kind of issues that might occur and construct a backup plan if things go south. This will help you face and solve the issues at the right time.
Here are some of the common issues with GRNs:
The most common issue that occurs with GRNs is the slow response time. A GRN must be issued as soon as the product is received and verified.
However, most of the time, the supplier must wait longer for a GRN since it takes time for the stores to do a quality check on the received items. Things get even worse for suppliers that provide items to larger organizations; their GRN turnaround time takes about a week.
Sometimes the received goods might have one or two quality issues that must be addressed. Smaller organizations can immediately reach out to the supplier to resolve the issue. It's a quick win-win for both parties involved.
Larger organizations, however, tend to keep these issues under wraps or record them on a smart ledger for internal teams to process, and this causes unnecessary bottlenecks in issuing the GRN.
There are a lot of moving parts that must work synchronously while issuing a GRN. Usually, three teams get copies of a GRN: the ordering team, the procurement team, and the supplier.
There are high chances that any of these teams might miss out on a tiny piece of information leading to discrepancies that halt the process. The GRN and invoice cannot be generated until the error is sorted out. The team has to look for the error manually, which takes even more time.
The biggest GRN issue is managing it. A GRN admin has to go through a very tedious process of fixing the issues during procurement.
Since creating a GRN is not an automation process, GRN admins must manually look for the issue by communicating with all the relevant teams. This takes time and puts the admins under pressure resulting in GRN issue delay.
Hubbler is an all-in-one, no-code business platform that can streamline your procurement, asset, expense, and GRN management. Hubbler lets you easily integrate with your existing databases, giving your a 360-degree view of your business process.
Here’s how Hubbler makes your GRN process better:
Hubbler seamlessly streamlines your business process and does all the heavy lifting. It simplifies GRN management and helps you maintain a strong vendor-customer relationship.
GRNs play a major role in the procurement process and serve as proof for both customers and suppliers, which they can use in the future for verification. They support inventory management and guarantee that the right amount of products are readily available. A GRN can also fix disputes that may arise from defective items supplied.
Managing the GRN is thus a tedious task for the admin. Errors must be checked manually to prevent procurement bottlenecks. This is where platforms like Hubbler can help automate the hard tasks and streamline your business process. Get in touch with us today.