Goods Received Not Invoiced (GRNI): Accruing Stock Before the Bill Arrives

Goods received not invoiced (GRNI) is stock you have received and put on the shelf, but the supplier's bill hasn't arrived yet. You own the stock and you owe the money, so both should be in your accounts. GRNI is the accrued purchases account that holds that amount until the bill turns up. When your stock lives in Cin7, Unleashed or an ERP and your accounts live in Xero or MYOB, the GRNI balance only stays right if the two systems agree on what was received, what was billed and at what price. A simple month-end check keeps it honest.

Why goods received not invoiced matters

Without an accrual, stock that arrives before its bill does one of two things:

• It's left out of the accounts until the bill arrives. Your stock and your payables are both understated, and the month looks different from what really happened.
• It's in the inventory system but not the ledger. Your inventory system shows the stock at cost, Xero or MYOB doesn't, and the two stock values disagree.

With an accrual, receiving the goods puts the stock in the accounts straight away, against a GRNI account rather than against the supplier. When the bill arrives, the GRNI entry is cleared and the bill goes to accounts payable as normal.

How the entries work

Here's a plain example. Say you receive stock at purchase order price on 28 June and the supplier's bill arrives on 5 July:

1. On receipt (28 June): inventory goes up by the value of the stock, and the GRNI account goes up by the same amount.
2. On the bill (5 July): the GRNI amount is cleared, and the supplier's bill for the same amount goes to accounts payable.
3. If the bill is different, say a price change or freight added, the difference has to go somewhere: back into the stock cost if the stock is still on hand, or to a price variance account. Your accountant should decide which.

At 30 June your balance sheet shows the stock and the amount owed, even though no bill exists yet. That's the whole point.

The reverse also happens: goods invoiced not received (GINR), where the bill arrives before the stock. Cin7 Core handles this with a stock in transit account.

How Cin7, Unleashed and ERPs handle it

Each system does this a little differently, so check yours rather than assuming.

• Cin7 Core has an optional inventory accrual setting. When it's on, receiving stock posts a journal to Xero that debits inventory and credits the GRNI account at the receipt date, using the purchase order cost (or average cost if there isn't one). When the bill is authorised, the accrual is reversed and the bill posts to accounts payable. Cin7 Core's help describes this in its article on inventory accrual and stock in transit, and recommends the GRNI account be set up as a liability or asset account with payments turned off (Cin7 Core help). GrowthPath, a CFO-advisory firm, calls inventory accrual best practice because it makes stock reconciliation easier (GrowthPath).
• Unleashed handles receipts and bills in its own way through its Xero integration. Check with Unleashed or your partner exactly what is posted when you receipt a purchase, and when.
• ERPs such as MYOB Acumatica, MYOB Exo or ERPNext usually have a built-in goods received account. The question is whether the ERP keeps the accounts itself, or sends summaries to Xero or MYOB. If it sends summaries, make sure the GRNI balance goes across too.

If your inventory system has no accrual at all, the accrual can be posted as a month-end journal from a list of open receipts. That works, but someone has to reverse it next month.

The month-end GRNI check

The GRNI account should only ever hold receipts that are waiting for bills. Anything else is an error. Each month:

1. List open receipts in the inventory system: goods received with no bill matched, with supplier, date and value.
2. Run the GRNI balance in Xero or MYOB at the same date.
3. Compare the two. They should match. If they don't, look for bills entered straight in Xero or MYOB instead of through the inventory system, bills matched to the wrong receipt, and manual journals to the GRNI account.
4. Age the list. Receipts older than a month or two need chasing. Common causes are a lost bill, a duplicate receipt, a return that wasn't processed, or a price dispute.
5. Chase or clear. Ask the supplier for missing bills. Fix duplicate receipts in the inventory system. Agree with your accountant how to treat anything that will never be billed.
6. Record the result so next month starts from a known position.

Common problems

• Bills entered directly in Xero or MYOB. The bill goes to payables, but the GRNI entry never clears. The account grows every month.
• Price differences. The purchase order said one price and the bill says another. If nobody decides where the difference goes, stock costs and margins drift.
• Freight and duty bills from other suppliers. These belong in the stock cost, not in GRNI for the product supplier. See our guide to landed cost.
• Part deliveries and part bills. Easy to match wrongly, and they leave small amounts behind.

When it's simple and when it isn't

If you use one inventory app connected to Xero, turn the accrual on, set the account up properly and do the month-end check, your bookkeeper can usually manage it.

It gets harder when receipts happen in one system, bills arrive through another (a bill-capture app, EDI, or a separate entity), and freight is billed separately. That's where the matching between systems needs to be built, not done by hand. For how buying, receiving and paying fit together, see our procure to pay guide, and for the inventory-to-ledger side see our inventory management consultant service.

Frequently asked questions

What is goods received not invoiced?

Stock or goods you have received but haven't been billed for yet. The GRNI account holds the value so your stock and what you owe are both in the accounts at month-end.

Is GRNI an asset or a liability?

It's normally treated as a liability, because it represents money you owe a supplier. Some systems let you map it to a current asset or current liability account. Check with your accountant how it should appear in your reports.

What's the difference between GRNI and accrued purchases?

They're often used to mean the same thing: purchases you've received and owe for, but haven't been billed for. GRNI is the term usually used for stock received against a purchase order.

Why does my GRNI account keep growing?

Usually because bills are entered straight into Xero or MYOB instead of through the inventory system, so the accrual is never cleared. Duplicate receipts and unprocessed returns also leave amounts behind.

Do I need GRNI if bills usually arrive with the goods?

If bills almost always arrive the same day as the stock, the timing difference is small. It still matters at month-end and year-end, so many businesses turn it on anyway. Ask your accountant.

If your GRNI account doesn't make sense any more, or your stock and your bills live in different systems, book a free initial chat. We'll look at where the matching breaks and tell you honestly whether it's a set-up fix or something bigger.