| Transaction Type | Debit (Dr) | Credit (Cr) |
|---|---|---|
| Goods Receipt | Inventory $1,000 |
GRNI $1,000 |
| Vendor Invoice | GRNI $1,000 |
Accounts Payable $1,000 |
| Vendor Payment | Accounts Payable $1,000 |
Bank $1,000 |
GRNI stands for Goods Receipt Not Invoiced. It acts as a temporary liability when goods are received but the invoice hasn't yet arrived.
The 3-Way Match (PO vs GRN vs Invoice) is crucial for ensuring the company pays only for the goods actually received and approved.
Payments should match the Accounts Payable exactly β this avoids overpayments and keeps reconciliations clean.
Period-end reconciliation between GRNI and AP ensures no liabilities are missed or duplicated.