Suppliers do not always invoice on the day they deliver. A pallet of stock arrives on 29 March, the invoice follows on 4 April. If the books only record the invoice, March shows the stock on the shelf without its cost, or shows sales of it with no cost of sales. A goods received not invoiced (GRNI) account fixes the timing.
How it works
- When goods are received and booked in against a purchase order, record the cost and a liability in GRNI.
- When the supplier’s invoice arrives, post it against GRNI rather than to purchases again.
- GRNI should then return to nil for that delivery.
| Account | Type |
|---|---|
| Goods received not invoiced | current liability (within accruals or trade creditors in the accounts) |
| Stock or purchases | asset or cost of sales, depending on your stock method |
Worked example
Stock worth £2,400 (excluding VAT) is received on 29 March. The invoice for £2,400 plus £480 VAT arrives on 4 April.
At 29 March:
| Account | Debit | Credit |
|---|---|---|
| Stock | £2,400 | |
| Goods received not invoiced | £2,400 |
On 4 April:
| Account | Debit | Credit |
|---|---|---|
| Goods received not invoiced | £2,400 | |
| Input VAT | £480 | |
| Trade creditors | £2,880 |
VAT is not accrued: it is reclaimed when the VAT invoice is received.
Reconciling the account
At each month end, list what makes up the GRNI balance: delivery date, supplier, purchase order and amount. Items older than a month or two usually mean one of three things:
- the invoice was posted to purchases instead of GRNI, so the cost is counted twice;
- the supplier has not invoiced and needs chasing;
- the price on the invoice differed from the purchase order and the difference was never cleared.
Without a purchase order system
Small businesses without goods-received notes can achieve the same result at the period end only: list deliveries in the last days of the month with no invoice, and accrue them with a reversing journal. The full-GRNI approach matters more for businesses with perpetual stock.
Services
The same idea applies to services received before invoicing, such as a contractor’s work in the last week of the month. These are usually treated as ordinary accruals; see accruals and prepayments.
The supplier side is covered in trade creditors in the chart of accounts, and stock in inventory accounts.