How to number invoices.
Not sure of the best way to organize your billing? Learn how to number invoices and stay on top of your business accounting.
Invoice numbers are the second-most important number on an invoice— after the amount due, of course. They’re unique identifiers that make it easy for your team to search invoices on a computer, or find copies in a filing cabinet, to help ensure everyone stays on the same page.
Different methods to number invoices.
Although numbering is an essential part of any invoicing process, there’s not one “right” way to do it. Here are some of the most common methods businesses use to determine how to create an invoice number:
- Sequential — Each new invoice number is one digit higher than the previous number. For example, if you start with invoice number 0000001, the next invoice created would be 0000002. This is the default numbering method for most accounting software.
- Chronological — Invoice numbers are based on the date created. For example, an invoice created on September 29th, 2022, could be number 20220929-001. (Since you’ll likely create more than one invoice per day, it’s still a good idea to include a sequential number following the date.) Chronological invoice numbers make it easy to see at a glance when you created the invoice.
- Customer or project number — Assigning invoice numbers based on established customer or project numbers makes it easy to track invoices for specific clients or projects. For example, if client A’s customer number is 1234, their first invoice would be number 1234-001. Their second invoice would be 1234-002, and so on.
Many businesses combine several methods to stay organized. If you wanted to combine all three numbering methods, you could create an invoice for customer 1234 on September 29th, 2022, that looks like this: 1234-20220929-001.
Which method is right for you?
Ultimately, there’s no “best” way to number invoices. It all depends on which method works for your business.
Once you determine which method you prefer, you can start numbering and sending invoices to clients and easily stay on top of billing.