What is an Invoice Number? Common Questions and How-tos
After the amount due, the invoice number is the most important number on your service business invoice. Here’s why you need invoice numbers and how to assign them.
A professional invoice process makes your business look legit, simplifies accounting, and helps to ensure you get paid fast. Luckily, invoicing basics are easy to master, as long as you know what to include.
One of the most important yet overlooked components is the invoice number. What is an invoice number, why are they important, and how do you generate them for your service business invoices? Read on to find out.
What is an Invoice Number?
An invoice number is a unique, sequential number assigned to each invoice. When used properly, invoice numbers make it easy to find invoices you’ve created, document income for taxes, and keep track of payments due from your clients. The most important thing to remember is that invoice numbers must always be unique and clearly visible.
Depending on your regions laws, you may or might not require an invoice number. But no matter where you work or how large or small your business is, it’s always best practice to include an invoice number and to establish a simple invoice numbering process. You’ll avoid confusion and legal headaches down the road.
Why do you need an invoice number?
Invoice numbers are one of the most important components of invoicing. Properly assigning invoice numbers allows you to:
- Document income for taxes and accounting
- Easily find invoices related to any transaction, no matter the job type, location, date
- Avoid duplicate payments
- Track down outstanding payments
- Provide a professional level of service to your customers
For example, imagine that a client has a question about an invoice that is several months old, or you have multiple transactions with the same client on that same day.
Without a consistent invoice numbering system, finding and managing your invoices can become a huge headache, and unnecessarily waste you and your clients’ time.
With a unique invoice number, you’ll be able to instantly pull up the invoice they are asking about and have confidence that you’re both referring to the same information. Invoice numbers also make it much easier to keep track of your exact income for tax purposes, and will make your life much easier if you or a client are audited.
Kristy Boase, Mil-Spec Lawn Care
“When we get back into the truck, as soon as we put the ramp up we can send an invoice, and usually when we are working on the next lawn we get an email saying that person has paid.”
What’s the best way to assign an invoice number?
Many businesses have devised their own ways to assign invoice numbers. The most common methods are:
- Sequentially (ex: 1, 2, 3, 4, etc.)
- Chronologically by date (ex: 20190326-001, 20190326-002, etc.)
- By client number (ex: 47-001, 47-002, etc.)
- By project number (ex: 299-001, 299-002, etc.)
- A combination of date and client number (ex: 20190326-47-001, 20190326-47-001)
As you can see, some of these methods can get quite long, which means they’re time-consuming and prone to error. Additionally, information such as date, client name and project type should already be on the invoice, so you’re creating more work by adding them to the invoice number.
While there’s no hard and fast rule for invoice number formats, we believe a simple sequential (also known as consecutive) invoice numbering system is best practice. It’s easy to remember and helps prevent duplicates or errors.
As a business owner, you have enough to worry about. Complicated invoice numbers shouldn’t be one of them.
How to generate an invoice number
Now you know what an invoice number is and why this small yet mighty digit is so important for your service business. Here are some best practices for generating one yourself:
- Always use sequential numbers to avoid duplicates.
- If you create invoices manually, make sure there is a clearly visible space on your invoice template for the invoice number.
- Keep careful records of all previous invoices.
- Be consistent. Once you’ve chosen an invoice number format, stick with it to avoid errors or duplicates later one.
- Alternatively, use online invoicing software to automatically generate unique invoice numbers on each individual invoice. Most invoicing software automatically generates sequential numbers and will even warn you if you’ve created a duplicate.
Not only does invoicing software create invoice numbers for you, it automates the entire invoicing process so you can generate professional invoices in minutes, email invoices and reminders to clients, and get paid faster.
Go beyond invoicing basics
An invoice is much more than a template. A proper invoicing process shows that you respect your clients’ time and money and can pave the way for future business.
Go beyond invoicing basics with software that can automate quoting, invoicing, and–yup–getting paid, so you can run a more efficient and profitable business.
Business management software such as Jobber can streamline every aspect of your invoicing, including sending reminders, batch invoicing, and integrations with ePayment options such as Jobber Payments, so you can make it easier for clients to pay you. Plus, Jobber integrates with accounting software such as QuickBooks Online so you’ll spend far less time on double entry and more time building your business.