What is a goods receipt? Process, types, and strategies

Before a payment is approved or inventory is updated, there's one critical step that often gets overlooked: the receipt of goods. It’s the moment your business verifies that what was ordered actually arrived—and arrived as expected.

Done right, it protects your finances, improves inventory accuracy, and lays the foundation for reliable AP processes like 3-way matching. Done poorly, it creates delays, payment errors, and unnecessary back-and-forth between teams.

In this guide, we’ll break down what the receipt of goods process involves, why it matters, and how to improve it as your operations scale.

What is a goods receipt?

A receipt of goods, or goods receipt (GR), is a formal record that confirms your business has received items from a supplier.

It's typically created once the goods arrive and are inspected for quantity, quality, and condition against the purchase order (PO).

Beyond documenting delivery, the goods receipt acts as a control point between procurement and accounts payable. It serves as one of the three documents used in 3-way matching—alongside the PO and supplier invoice—to ensure payment is only issued for goods that were properly received.

Who issues a goods receipt?

The receipt is usually issued by warehouse staff, receiving clerks, or procurement personnel responsible for checking incoming deliveries. Upon delivery, the team inspects the shipment to confirm it matches the PO and records the results in the system.

In many businesses, this process is supported by ERP or warehouse management systems. Barcode scans and system entries capture quantities, conditions, and discrepancies in real time. This ensures inventory accuracy and supports downstream processes like invoice matching and financial reporting.

Why the goods receipt process matters

An efficient goods receipt process provides critical checks and documentation that protect your business and improve financial accuracy. Key benefits include:

• Payment control: Verifying deliveries before approving payment helps prevent overbilling, duplicate payments, and fraud
• Inventory accuracy: Goods receipts align inventory systems with physical stock, minimizing discrepancies
• Support for 3-way matching: Matching the receipt with the PO and invoice ensures only verified deliveries are paid for
• Dispute resolution: If goods are damaged or missing, early documentation speeds up supplier resolution
• Audit readiness: A complete receipt trail supports compliance and internal controls

The role of goods receipt in 3-way matching and payment holds

The goods receipt acts as a financial safeguard within the 3-way matching process. Payment is only released when the purchase order, goods receipt, and supplier invoice align.

If quantities don’t match, goods are damaged, or delivery can’t be verified, the invoice is flagged for review. This process helps prevent payment for incomplete or incorrect deliveries. Without a timely and accurate goods receipt, AP teams may be forced to delay payments—or risk processing invoices that shouldn't be approved.

Steps involved in the goods receipt process

The receipt of goods process helps ensure that shipments are accurate, in good condition, and properly recorded before inventory and financial systems are updated. While workflows may vary slightly by business, the core steps typically include:

1. Purchase order creation and delivery scheduling: A PO outlines the required items, quantities, and delivery timelines. Once confirmed, the supplier prepares the shipment
2. Advance shipment notification (ASN): The supplier sends an ASN to provide visibility into what’s being delivered and when. This helps the receiving team prepare for inspection and unloading
3. Receipt and unloading of goods: Upon arrival, shipments are unloaded using designated receiving areas and equipment to prevent damage and keep operations organized
4. Verification and quality inspection: Items are checked against the PO and ASN to confirm quantities, SKUs, and quality. Any visible damage or discrepancies are flagged
5. Documentation and record-keeping: A goods receipt note (GRN) is generated to formally record what was received. This includes any exceptions and feeds into financial reconciliation and inventory updates
6. Storage and inventory update: Verified goods are moved into storage and logged into the inventory system, ensuring physical and digital records align
7. Internal communication: Relevant teams—procurement, finance, and operations—are notified of the goods receipt to trigger downstream actions like invoice matching and payment processing

Different types of goods receipts

The type of goods receipt created depends on the source of the items being received. Common categories include:

Each type follows a slightly different workflow but serves the same purpose: documenting and verifying what was received before storage or payment.

​​Goods receipt considerations for service-based businesses

In product-based businesses, a goods receipt typically refers to the physical delivery of materials or inventory. But for service-based businesses, the concept of a goods receipt shifts away from physical items and toward deliverable tracking. There’s typically no shipment to inspect—but the need for confirmation still exists.

Instead of a physical receipt, businesses may rely on:

• A signed statement of work (SOW) verifying that consulting hours were delivered
• A completed milestone recorded in a project management system
• A support ticket or usage log showing that contracted services were provided

Although these don’t involve physical goods, the principle is the same: no payment should be made until there’s documented evidence that the services were delivered and accepted.

Goods receipt vs. invoice

While both documents are essential in the purchasing workflow, they serve distinct purposes. Here’s how they compare:

Together, the goods receipt and invoice help validate that what was ordered was received—and only then, paid for.

Goods receipt vs. goods issue

It’s also important to distinguish between goods receipts and goods issues. Both are inventory transactions but represent opposite actions.

Common challenges in handling goods receipts

These problems can disrupt inventory records, delay payment approvals, and introduce compliance risks. These include:

• Missing or delayed goods receipts: When receipts aren’t entered promptly, inventory records fall out of sync, and invoices may be held or paid without proper verification
• Discrepancies with the PO: Mismatched quantities, item specs, or SKUs require additional review and may delay reconciliation with finance or procurement teams
• Damaged or defective goods: Incomplete or damaged deliveries slow down operations and can result in rework, return processing, or credit negotiations with suppliers
• Manual documentation: Paper-based or spreadsheet tracking increases the risk of data entry errors and makes it harder to maintain visibility across teams
• Poor storage coordination: A lack of structure at the receiving dock leads to misplaced items, bottlenecks, and reduced processing efficiency—especially during high-volume periods

Strategies for implementing an effective receipt of goods process

Improving the goods receipt process doesn’t always require a full system overhaul. Often, targeted changes can drive better accuracy, speed, and alignment across teams. Strategies to consider:

• Set strict SLAs for receipt entry: Establish clear expectations for when goods receipts must be entered into your system to prevent delays in inventory updates and payment holds
• Use barcode or RFID scanning at receipt: This eliminates manual entry, speeds up verification, and reduces the risk of mismatched quantities or item numbers
• Create standard exception handling workflows: When items are damaged, shorted, or incorrect, route them into a defined process for documentation, supplier communication, and resolution—rather than leaving it to ad hoc follow-up
• Integrate your ERP or AP system: A centralized system that connects receiving with procurement and accounts payable enables real-time matching, automated holds, and faster issue resolution
• Designate a receiving area with proper layout: Avoid bottlenecks and misplaced shipments by clearly separating inspection, staging, and storage zones. This also helps track incoming goods more efficiently during busy periods

From goods received to invoice paid—with fewer errors

The receipt of goods is where purchasing meets accountability. It’s the moment your business confirms what’s been delivered—and the trigger for everything that follows. But matching that delivery to a purchase order and invoice shouldn’t require time-consuming reviews.

Ramp connects the dots between procurement, receiving, and accounts payable—so your team can move faster with fewer errors and complete visibility.

With Ramp, you can:

• Automate 3-way matching: Match invoices to purchase orders and item receipts, and flag discrepancies before they slow down approvals or payments
• Streamline invoice intake: Use AI-powered OCR to extract line-item details, apply suggested GL codes, and reduce manual work
• Keep systems in sync: Sync POs, receipts, and payments with NetSuite, QuickBooks, and more to eliminate double entry and ensure accuracy

From intake to approval to payment, Ramp helps you close the loop—so what happens after the goods arrive runs just as smoothly.

Let’s simplify your procurement and AP process. Try Ramp or explore a demo to see how it works.