In order to control the activities of the business and have operations running effectively management is responsible to have controls in place. Without controls accountantability will not be possible. One of the ways by which controls can be implemented is by using control documents (sometimes known as source documents as some are used to initiate accounting process so act as a “source”). For examples purchase orders, invoices, cash receipts, goods received note, goods despatch note etc.
Goods Despatch Note (GDN) or Goods Dispatch Note is a document that is raised by the supplier’s despatch department responsible of sending goods out to customers. A copy of the GDN is retained by the despatch department and one copy is sent to accounts department to process invoice to the customer. Without GDN sent to accounts department no invoice can be raised. In other words goods despatch note acts as a source to generate invoice. These notes are usually sequentially numbered that helps identify any missing notes from the record.
Goods Delivery Note: If the same note i.e. goods despatch note is sent with the goods to the customers and customer sign the documents as an evidence of the receipt by the customer then the same note will be named as Goods Delivery Note. So if we are really intended to differentiate between two types of documents then despatch note only authorizes the despatch whereas delivery note serves an additional purpose and acts as an evidence that goods have been delivered to the customer and customer acknowledges the receipt. Business, however, might raise goods delivery note and goods despatch note separately to keep the documents meant for internal and external purposes remain distinct.
Goods Received Note (GRN) is raised by a store manager of the customer (buyer) on receiving goods from supplier. This document is for internal usage. Just like goods delivery/despatch note that are in triplicates, goods received note are also prepared in three or more copies where one is retained by the store department and another is sent to accounts department. Accounts department uses GRN to verify the invoice sent by the supplier. No invoice will be processed by the accounts department for payment purposes unless a GRN is sent by stores manager as GRN evidences the receipt of goods.