What Is an Invoice Number? Invoicing Basics Explained

invoice number meaning

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). https://www.bookstime.com/ You can quickly tell how many invoices you’re sending out to clients, earnings per client, and the most popular services you’re selling. You might find that one type of service on your invoices is far easier to sell and more profitable than others. When you find that trend, seize the advantage by selling even more of that service.

2. Increase Your Invoice Number By A Set Number Each Time

When customers pay their dues, the business must match the payment with the corresponding invoice to verify if the customer has paid the correct amount. Some businesses require customers to indicate the invoice number in the payment to make it easy for the bookkeeper to mark invoices as paid. QuickBooks automatically assigns simple and intuitive invoice numbers, making your payment history easy to search. Because of your well-organised invoice number meaning invoicing system, you can quickly Checks your records for the particular invoices previously billed to your client. Quickly finding the last invoice, SA0003, you are able to provide concrete proof of payment you received for the previous project. If you’re just starting out using invoices to bill clients, here are a few simple tricks you can use to ensure that your invoices are well-organised and easily searchable.

  • Invoices help businesses keep track of the various payments they can expect, while also informing clients about how much they owe.
  • For instance, if a client is used to paying you $5000 per month and your next invoice will be $8,000, communicating clearly about the change is essential.
  • This is especially important when your business is growing, and you start dealing with more clients.
  • This helps you keep track of the numbering and avoid duplicates.
  • Sellers or vendors issue invoices toward the end of transactions after the product is delivered or the service is provided.

Track Payments Anytime, Anywhere

invoice number meaning

They should be assigned sequentially, meaning that the number of each new invoice increases. Legally, an invoice number sequence should never contain repeats or gaps. An invoice number is a unique, sequential code that is systematically assigned to invoices. If you have organized your invoices with a clear invoice numbering system, you can quickly locate the invoice MI0003 and show it as evidence for the cost of the task. Starting the sequence of your invoice numbers from smaller digits helps organize your invoicing and makes retrieving one from the record easier. An invoice number is a unique set of codes that are typically located at the top of an invoice in the header section.

Invoice numbers and deleted invoices

You may notice that the number of zeros changes in the left box of the above example. Using zeros before your sequential invoice numbers, systematically set up your invoice to cater to a high number of subsequent invoices. The example to the right is a less common way of numbering invoices, but it works the same.

  • For example, within a sequence that refers to the year, the first invoice in 2021 could be numbered ‘210001’.
  • The next invoice number should be a sequential number that’s easy to keep track of.
  • You can also take a look at our invoice generator, which will help you set up invoices for your small business.
  • There is no specific rule on how to set up your invoice number format.
  • However, if you regularly issue invoices, you should keep a consistent numbering system to ensure a systematic and effective invoicing management process.
  • A common way to create a longer, more specific invoice number is to include the month or year the invoice was issued.

From the first invoice number onward, there should never be a duplicate number. Giving each business transaction an assigned invoice number makes tracking transactions much easier—especially once you get into double or triple figures. Hollywood Limousine Services (HLS) issues 50 professional invoices in September. Because each client has referenced the invoice number with their payment.

Try Hiveage by signing up for a full-featured free trial (no credit card required), and see how your invoicing can be made so much easier. If you do project-based work, another way to format your invoice number is to have a project code as the prefix. Thus, this requires each of your projects to have a unique code as well. Then, each of the invoices raised for that particular project can have the project code as the invoice number prefix. Let’s use our old friend Hollywood Limousine Services again for this example.

Digital Payments

invoice number meaning

At the price listed, with a promise to pay for them at a future date. Furthermore, you can track your payments wherever you go, at any time, and on any device including a computer, smartphone, or tablet. You can also create custom online invoices using in-built styling options to match your brand identity. Now, in this case, making early payments might save you a good chunk of money over a period of time.

Avoid random numbers:

  • Generally, a sequential set of numbers would follow the company’s abbreviation.
  • Even if your clients do not require an invoice number, it is still wise to use an invoice number.
  • This is one of the upcoming features currently in our product roadmap, as of this writing.
  • Most of the time, businesses would have to change their original invoice numbering system as the company expands and needs to be more organized.
  • If you own a service-based business, include the title of your project, as well as a description of the activities you perform.
  • Using QuickBooks, you can create electronic invoices and accept payments from one location, improving the overall transaction for your team and your clients.