Self-employed persons who run their businesses are responsible for accounting and should know how to organize paperwork properly. The key to this is understanding what elements of each file, form, or template are mandatory and why. In this article, you’ll learn the invoice number definition and the basic requirements for generating IDs.
Invoice Number Meaning
Invoices are important documents that confirm the sale of goods or services. Both businesses and customers use them for various purposes: budgeting, controlling financial flows, accounting, paying taxes, etc. As they carry such value for all participants, you have to make them look professional.
One of the key elements of such papers is IDs. They’re a unique combination of numbers, letters, and symbols, usually assigned automatically by software like Saldoinvoice but can be customized depending on the system you choose. Why do invoices generally include an invoice number? Clients use it to pay for work performed, and entrepreneurs track the flow of money into their accounts.
An invoice tracking number allows you to identify a payer and the reason for payment. It’s important if you work with many customers who may place several orders simultaneously. With a unique ID, you can separate one sale from another.
Invoice Numbering System
How to make an invoice number? There are various approaches, and you can choose the one that best suits your activity. Apps automatically assign serial numbers to the documents you generate in the order they were created. They get numbered like #004, #005, #006, etc. Make such a simple combination to give you more information about an orderer and, for example, the completion date.
Although there are no clear requirements for the execution of invoices and bills in many regions, the law sets certain rules in some countries. If you interact with foreign customers, clarify the terms in their area.
You can supplement a bill number with the client or project ID and add the issue date. Here’s a simple invoice number example: 5700/20211201/005. The first digits are the orderer ID; the information in the center is the date the document was created (December 1st, 2021); the last digits are the account number. Separate each one with a dash or a slash, but ensure there are no spaces between the characters.
Whatever system you choose, stick to it when generating all files. Failure to do so will create confusion in your papers, which will affect your and your client’s documentation. If you want to switch to another system, do so when the reporting period ends.
How to Number Invoices — General Rules
Although many countries don’t set clear terms for the design, there are generally accepted invoice numbers rules that you should adhere to. First and foremost, every number you or your app create should be sequential. Each next file should have an ID one point more than the previous one.
You need to avoid repeating character combinations. Some inexperienced self-employed are resetting the numbering to zero in the new year. It’s fundamentally wrong, as it causes confusion in the paperwork. All numbers have to be unique. If a document was made and sent to a recipient by mistake, you shouldn’t delete it. Put a corresponding record in your papers and send a correction note to a client.
Also, IDs have their place in any template. Where to find an invoice number? It should be located at the top, next to other important information: title, issue date, and payment terms. This data is key to identifying incoming paper, so it should be visible.