Last editedMar 20222 min read
Whether you’re a small business owner or a freelancer, it’s essential to learn the best practices for invoicing. Including all the necessary information in a clear and easy to read format is a good way to improve your chances of getting invoices paid on time, and part of this involves using the right invoice numbering scheme.
Numbering invoices might sound simple, but there are various different ways that you can approach this, which are detailed in this guide.
Did you know that you can make invoicing much simpler by signing up to GoCardless? There’s a direct debit solution that can be used for taking payments from your customers, as well as integration with other accounting services. Keep reading to find out more.
What is an invoice number?
Although it may appear obvious, it’s important to first clarify exactly what is meant by numbering invoices. Every invoice that you create should have its own unique number that can be used for referencing purposes. This makes it much easier to identify specific transactions, which may be necessary if you’re dealing with late payments down the line.
The invoice number itself may contain the date of issue, as well as details about the project or task. There are several different ways in which you can approach this, which are detailed below.
When numbering invoices, many business owners wonder “do invoice numbers have to be sequential?” While it may be the most common method, it’s not the only way to number your invoices.
A sequential invoice numbering scheme is simple. You begin at a given number, which may be simply the number 1 or perhaps a longer number if you prefer (many companies choose to begin with a four or five-digit number). The following invoices then increase in value by 1 each time, a process which can usually be carried out by invoicing software such as GoCardless. You can also use a numbers invoice template for this purpose.
Chronological invoice numbering
If you’re wondering how to assign invoice numbers, you may also consider a chronological invoice numbering strategy. This basically means that you can incorporate the date into the invoice number. For example, if you issue an invoice on February 1st, 2022, then the number may begin with 2022-02-01.
You should then follow this date with a customer number or other unique identifier, as there may be multiple invoices on one day.
Using customer numbers in invoices
You can improve invoice processing by including a customer number within the invoice number. Including this can make it much easier to locate a specific invoice when needed. For example, if a customer has an issue with their order or service, then you can easily use their identifier to search for the invoice quickly.
In a similar way, you can choose to incorporate a project number into an invoice if you work with the same client over long periods of time.
GoCardless and invoicing
You can take the stress out of invoicing by using automation to streamline the process. Rather than searching for numbers invoice templates and asking questions such as “do invoice numbers have to be sequential?”, you can rely on software that does the job for you.
GoCardless is designed to be used for both one-off payments and recurring payments, making it great for businesses offering subscription services and products alike. The service is quick and simple to set up, and customers simply need to add their payment details once and provide authorization to initiate automatic payments on the due date. What’s more, you can integrate with other software solutions such as Xero and QuickBooks, as well as 200+ other partners.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.