What are Goods Received Not Invoiced?

Q: What are Goods Received Not Invoiced?

Goods received not invoiced are goods a company has received from a supplier but has not yet received or recorded the related supplier invoice for.

Definition

Goods received not invoiced, often called GRNI, are goods that a company has physically received from a supplier but has not yet received or recorded the supplier invoice for. This creates an accounting timing difference because the company has already received economic value, but the payable has not been finalized. GRNI supports accrual accounting by recording the obligation when goods are received, not only when the supplier invoice arrives.

How Goods Received Not Invoiced Works

GRNI usually starts when the receiving team confirms a Goods Receipt against a purchase order. The company now controls the goods or has accepted delivery, so an accounting entry may be required even if the invoice is pending. The entry commonly debits inventory or expense and credits a GRNI liability account.

When the supplier invoice later arrives, accounts payable matches it against the purchase order and receipt. If the invoice agrees with the receipt and pricing, the GRNI balance is cleared and the amount moves into accounts payable. This keeps the liability visible during the gap between receipt and invoice processing.

Core Documents and Data

Purchase order: Defines supplier, item, quantity, price, terms, and approval basis.
Receiving record: Confirms that goods were delivered and accepted.
Goods receipt note: A Goods Receipt Note (GRN) provides evidence of quantity, date, and receiving location.
Supplier invoice: Confirms the final billing amount and tax details.
Matching record: Supports invoice matching between purchase order, receipt, and invoice.

Calculation Method

A practical formula is: GRNI liability = Value of goods received - Value of supplier invoices matched or posted. The value of goods received is usually based on purchase order price multiplied by quantity received. If freight, taxes, duties, or landed costs are included in inventory valuation, they may also be considered based on the company’s accounting policy.

For example, if a company receives 500 units at $80 per unit and no invoice has been posted, the GRNI liability is 500 × $80 = $40,000. If the supplier later invoices $39,800 because of a negotiated discount, the $200 difference is reviewed and adjusted according to the company’s matching tolerance and close policy.

Worked Example

Assume a manufacturer receives raw materials worth $65,000 on September 28. The supplier invoice will arrive on October 4, after the September books are closed. Because the goods were received in September, the finance team records a September GRNI entry by debiting inventory for $65,000 and crediting GRNI liability for $65,000.

When the October invoice is posted for $65,000, the company clears the GRNI liability and records the supplier payable. This ensures September inventory and liabilities are complete. If the materials are used in production before invoicing, the cost may later flow into Finished Goods Inventory or Cost of Goods Sold (COGS) based on normal inventory accounting.

Why GRNI Matters

Goods received not invoiced improves financial reporting by ensuring received goods and related obligations are recorded in the correct period. Without GRNI, inventory may be understated and liabilities may be incomplete at period end. This can distort working capital, gross margin, procurement spend, and supplier obligation reporting.

GRNI also supports cash flow planning because it shows supplier obligations before invoices are processed. Finance teams can use GRNI balances to improve cash flow forecasting and understand upcoming payments tied to goods already received.

Controls and Reconciliation

GRNI balances should be reviewed during month-end close to confirm that open receipts are valid, invoices are not missing, and old balances are cleared properly. Teams should investigate receipts with no invoice, invoices with no matching receipt, quantity differences, price variances, and supplier disputes.

Special cases require careful review. Goods in Transit may need separate treatment when ownership has transferred but physical receipt has not occurred. A Goods Return should reduce the liability if received items are sent back. Tax amounts, including Goods and Services Tax (GST), should be handled based on invoice timing and applicable tax rules.

Best Practices

Reconcile GRNI balances to purchase orders, goods receipts, and supplier invoices.
Review aged GRNI items to identify delayed invoices or unmatched receipts.
Set matching tolerances for price, quantity, freight, and tax differences.
Clear GRNI promptly when invoices are posted through accounts payable.
Track recurring supplier timing differences to improve close estimates.
Document material GRNI adjustments for audit and management review.

Summary

Goods received not invoiced represents goods that have been received but not yet invoiced by the supplier. It creates a temporary liability so inventory, expenses, and obligations are reported in the correct period. When supported by purchase orders, receiving records, invoice matching, and reconciliation controls, GRNI improves reporting accuracy, vendor visibility, cash flow planning, and business performance analysis.