What is an invoice number? How to assign invoice numbers

An invoice number is assigned to each invoice you send to clients to make it easy to track. It is typically a unique and sequential number, and if used correctly, it can be very useful for tracking incoming payments and filing income taxes. There is no specific rule on how to set up your invoice number format. If you use an online invoicing software like Hiveage, you will have the option of choosing from a set of standard options, or defining your own. The software will also take care of automatically incrementing the invoice number sequence, so that you never accidentally duplicate the number of invoices. Also, some countries like the UK have strict regulations on including invoice numbers.

• Another reason why invoice numbers matter is because they make your business look professional.
• From there, you can add unique identifiers such as customer numbers, a code for your business, or the date.
• This will help quickly find all relevant invoices to prove your business is running compliantly.
• Here are several reasons why your business needs to include a number on every invoice.

Before making and sending an invoice, check that your customer is expecting one. If your invoice comes out of nowhere, they may be slow to pay it, or even annoyed. Ideally, you’ll set those expectations upfront, before starting work but if not, then at least tell them when an invoice is about to be sent. If you are looking for a better and faster way to process your invoices, VisionERA is an ideal option. It is a comprehensive Intelligent Document Processing (IDP) platform that allows your accounting department to process invoices with 20x speed.

How to assign invoice numbers: Definition & examples

A different invoice number should be assigned to each and every new invoice you send. Roll numbers for students to employee numbers for payroll purposes, every number uniquely and unmistakably stands out as it works as identifiers. Some of our favorite invoicing software to choose from is FreshBooks, Lili, Bonsai, Fiverr Workspace, and HoneyBook.

The most widely used invoice sequencing method is project-based. As the name suggests, you can easily reference your invoices using the project number. Many What is an invoice number businesses opt for a system of invoice numbering that takes the current year, such as 2021, and goes up from there starting with ‘202101’ or ‘210001’.

Invoicing with QuickBooks Payments

After you summarize your invoice and payment process, ask the client if they have any questions or concerns. For example, is there a different email address you should send your invoice to? Does the client’s finance or accounting department have specific requirements? They may ask you to use a particular type of invoice number (e.g., for invoices sent in October, please start invoices with OCT – like OCT100, so that we can stay organized). Keeping clients satisfied is crucial if you sell services to clients as a freelancer, consultant, or agency owner.

Let the letters be the same, you just need to increase the number with each invoice. How you label invoices matters because you need a smart way to track your billing and an easy way for clients to track their spending. As long as the invoice number has reasoning behind it and is easy to find, it will get the job done.

How to number invoices: Learn how to assign invoice numbers

An invoice should include relevant information needed to process the payment on time. Make sure your invoice numbers do not get confused or mixed up with other types of numbers you keep track of, like customer number or project number. Invoice numbering should be a system in which each number is a unique identifier — not just for invoice numbers, but all forms of business tracking. A professional and organized invoice can work wonders for your business.

A business has nine recurring monthly clients, each receiving at least one invoice per month. Therefore, use a different invoice number to keep track of each one. The “rule of 10” approach is ideal when your business is small or has a handful of clients.

Some contractors choose to use a specific project number and then number intermittent invoices within the project. It can also serve as legal protection in the event that you have to handle an invoice dispute. The more detail that you have logged and tied to that particular statement, the easier it will be to defend yourself and your services.

Best Practices to Assign Invoice Numbers

It numbers invoices automatically, thus improving the accuracy and efficiency of your invoice tracking process. Invoice numbers are mandatory and should be assigned sequentially. You must number invoices consecutively for legal reasons – numbers should never repeat, and there should never be gaps between numbers.How many digits are in an invoice number? It’s not recommended to number invoices with single digits (1, 2, 3, etc.). It’s one of the best practices that small business owners swear by.

Ultimately, your team can focus on other critical activities that lead to your business growth. The primary purpose of invoice numbers is to help differentiate and track payments. The custom invoice number series begins with the customer name, and the invoice date (an optional one), and finally ends with a sequence number. This method allows you to assign invoice numbers like 1, 2, or 3—or even 00001, 00002—to every new invoice you create. Invoice number is what gives all your invoices a unique identity with which you can track them easily.

COMPANY

Luckily, I switched to Moon Invoice and found the hassles of stock and expense management getting faded. The date makes up the first part of this number, and the order number, which rises by one with the previous sale, makes up the second part. To further customize the invoice, you may add the client’s number. Here are some common mistakes to avoid when choosing your invoice number system. The fastest and simplest online finance service for SMEs, freelancers and the self-employed in Europe.

Chronological numbering includes the date of the project completion as the invoice number. Tell them that the most recent invoice you sent was missing a number. You will cancel and send a corrected invoice with an invoice number to fix the problem.

So, when it comes to invoicing numbers on company invoices and get paid faster, they are fully determined by the company that sends invoices. The project number is your last option for referencing your invoices. For example, construction businesses are ideal candidates for employing this method since they manage several projects or have critical project figures. Consistency is essential when constructing a number sequence based on a number pattern. Clients will find it easier to handle and track finished bills as a result.

The purpose of the invoice number is to identify the particular invoice among all the invoices sent out by you. An invoice number is a unique number assigned to each of your invoices so that you can identify, organize, and document them. An invoice number, also referred to as an invoice ID, is typically found at the top of an invoice and can be either be purely numeric or alphanumeric with special characters.

Another reason why invoice numbers matter is because they make your business look professional. The invoice number is the first thing on an invoice and appears before any other information. According to a survey, only 6% of invoices get paid within 30 days, while the rest 94% can take anywhere between 30 and 60 days. When most of us think about the purpose of an invoice number, it comes to our mind that it is a primary identification of the given transaction. The invoice number becomes a unique ID number to track the sale and act as a reference later when working on accounting and tax activities.

A receipt number helps track receipts, which are given when a payment is made. Get started invoicing with QuickBooks today and create professional invoices 37 percent faster—and get paid two times faster. Sometimes, a client may request information about past transactions they made with you—or you might be curious about them yourself. By having well-organized financial records and invoices, cataloged thoroughly using your invoice number system, you can quickly and efficiently find any past payment in your system. Companies may opt to send a month-end statement as the invoice for all outstanding transactions. If this is the case, the statement must indicate that no subsequent invoices will be sent.

It’s nearly impossible to find the right invoice if it doesn’t have an invoice number assigned. They are the bills that specify and describe services or goods a client has purchased from you; they also include the exact amount your customers have to pay. Use our default numbering system, or choose your own custom invoice number series by typing your preferred number into the ‘Invoice No.’ box. The number will automatically be updated to the following sequential number whenever you create a new invoice. A common way to create a longer, more specific invoice number is to include the month or year the invoice was issued.

They enable seamless tracking of transactions, timely reminders for outstanding payments, and simplify accounting and taxation. You may create an invoice template one moment and then solve a client crisis in the next. You may send an invoice to a client on your phone while also making dinner for your family. It’s best to speak to an accounting professional about what to do with invoice numbers from prior businesses. There could be tax or legal consequences from switching your invoice numbering system around, so you’ll want to assign invoice numbers with that in mind. That said, with many invoicing solutions on the market, finding the best software that meets all your requirements can cost a lot of time and money.