A goods received note (GRN) is a record created by a buyer, usually its receiving or warehouse staff, confirming that a delivery arrived. It lists the items, quantities and any damage or shortages noted at receipt.
How it works in factoring
Many buyers use a "three-way match" before paying a supplier: the purchase order, the goods received note and the supplier's invoice must agree. If the receiving record shows fewer units than were invoiced, the buyer will usually pay only for what it received.
For a factor, a GRN or similar proof of delivery helps show that:
- The goods were actually delivered, not just ordered
- The quantity on the invoice matches what the buyer accepted
- Any shortages or damage are known before funding
In trucking, a signed bill of lading or proof of delivery plays a similar role. In services industries, approved timesheets or completion certificates serve the same purpose.
Illustrative example: A supplier invoices 1,000 units, but the buyer's GRN records 950 units received, with 50 short. The factor would expect the buyer to pay only for 950 units and may adjust the advance before funding.
What to check
- Whether your customer issues GRNs and whether you can obtain copies
- Whether your delivery paperwork is signed by someone with authority to accept goods
- How shortages or damage are reported back to you
Collecting proof of delivery at the dock, rather than weeks later, avoids many disputes that would otherwise reduce your factoring proceeds.