What Is an Invoice Number?

An invoice number is a unique number mentioned on the top of an invoice to keep accurate records of invoices and simplify payment tracking. Whenever the client pays the money, the issuer can refer to the invoice using the exact invoice number and check if they have made full payments or if there is anything still pending.

Adding an invoice number on every invoice you create will not only help you track the payments but also aid in generating financial reports to improve your financial planning. This is especially true for business owners involved in multiple projects as they barely have time for invoicing & payment tracking. Hence, including an invoice number can significantly transform invoice management.

What Should an Invoice Include?

Whether you create an invoice on paper or online, a few things should never be overlooked. Here are some necessary things to include on a fresh invoice.

1. Invoice Number

Mention an invoice number along with the correct date to inform clients of when an invoice was issued and maintain accurate records.

2. Business Details

Add important business details like business name, office address, and mobile number. Also, put your business’s logo on top of an invoice.

3. Client Details

Highlight the basic information of your client like legal name, address, valid email ID, and phone number.

4. Products or Service Details

Include what type of services or products you delivered and also mention the cost to determine the total outstanding amount.

5. Taxes

Add the applicable taxes such as GST or VAT to comply with local tax laws and adjust the total outstanding amount.

6. Payment Method

Include a payment link or offer customer-preferred payment options in an invoice to collect the payments quickly.

7. Payment Terms & Conditions

Don’t forget to write payment terms while creating an invoice. Prefer short and simple payment terms so that clients can easily understand.

8. Signature

Sign an invoice digitally or include the business stamp at the bottom corner to authorize an invoice before you send it to the client.

What is the Importance of Invoice Number?

Invoice numbers can be helpful in many ways. Here is why you must remember to add an invoice number while making a new invoice.

1. Invoice Tracking

Having an invoice number on every invoice can ease your invoice tracking process. You can easily filter out overdue invoices, and past-due invoices and inform clients about their pending dues. You no longer need to flip through paper invoices or contribute more time to tracking invoices.

2. Cash Flow Monitoring

Attaching invoice numbers will help you differentiate paid and unpaid invoices, allowing you to check and optimize the incoming cash flows. You can find the areas for improvement and adjust your financial strategies to enhance the business cash flow.

3. Payment Tracking

If the customer says they have paid the due amount, you can quickly check an invoice using the correct invoice number and acknowledge them. You can confirm if the full payment was made without wasting more time and effort.

4. Financial Reports

Financial reports are easier to generate when you have accurate invoice records, all because of an invoice number mentioned on every invoice. This will save you valuable time and you can generate reports quickly to revise business strategies.

Why Do Invoices Need an Invoice Number?

Whether you prefer an online invoice or a paper-based invoice, attaching a unique invoice number can assist in maintaining error-free financial records. Both the parties, the seller and the buyer will find it easier to record and track invoices as long as they carry an invoice number.

Without an invoice number, your clients may not accept an invoice as they want to comply with the local tax laws once the payment is completed. Moreover, you will have difficulties knowing whether it is a paid invoice. The reason is if an invoice doesn’t have an invoice ID or number, it is nearly impossible to track it.

How can I Correct Invoice Number Errors?

Minor errors in assigning invoice numbers are unavoidable when making invoices on paper. An effective solution is to ditch the conventional method and implement a completely automated invoicing process.

Sometimes you may find errors once you have delivered an invoice or may learn about mistakes in invoice number a moment before you hand over an invoice to the customer.

Such issues might come out of nowhere because manual invoicing is highly prone to errors. However, this isn’t the case with an online invoicing process as you can create error-free invoices instantly without any manual checkups and increase customer satisfaction.

As a result, an online invoicing process has an edge over manual invoicing. What you need is the right invoicing software to generate accurate invoices in less time.

Examples of How to Use Invoice Numbers

Here are some of the best examples to help you understand what’s an invoice number and how to assign it.

1. Sequential Invoice Numbers

As its name suggests, assign invoice numbers in a sequential order such as 001, 002, 033, and so on. Create a fresh invoice and start adding invoice numbers sequentially to keep the accurate invoice record. If you are issuing it for the first time, you may begin with 001.

2. Chronological Invoice number

It consists of invoice dates in order to help the issuer organize invoices based on date and time. Chronological invoice numbers make it easier to find invoices considering their exact date when they were issued. INV-20240212-001 and INV-20240212-002 are examples of chronological invoice numbers.

3. Alphanumeric Invoice Number

It is a combination of letters and numbers to categorize invoices more effectively. You can mix sequential numbers with your company’s initial to generate alphanumeric invoice numbers. STAR-INV-001, STAR-INV-002, and STAR-INV-003 are examples of the alphanumeric invoice number.

4. Project-wise Invoice Number

They are just unique invoice numbers added in reference to the ongoing or past project works.
If you are dealing with multiple client projects, assigning project-wise invoice numbers can make a difference in invoice management. Project-wise invoice numbers are 455-INV-1001, 455-INV-1002, and so on.

How can Online Invoicing Software Help?

Online invoicing software like Moon Invoice transforms the invoicing process, ensuring you neither have to perform manual calculations nor worry about minor errors.

A few clicks and your invoice is ready without any manual effort. Plus, you don’t need to remember the invoice number sequence as every invoice will have a unique number. This means you can spend less time on invoicing and more on your core business activities.

Here’s what Moon Invoice offers you👉

• Readymade invoice templates
• Error-free invoice numbering
• Automatic calculations
• Tax-compliant invoices
• One-click invoice share
• Thermal or normal print
• Online payments
• Expense reports
• Business reports
• Credit note
• Cloud sync

Conclusion

An invoice number is not only important for invoice management and accurate financial records but also essential for tracking payments. Since manual invoicing is prone to errors in assigning invoice numbers, embracing invoicing software like Moon Invoice can be a game-changer in enhancing your invoicing process.

You no longer need to remember invoice numbers or check each invoice manually. Get a customizable invoice template from Moon Invoice, fill in the required details, and let it handle the rest. Don’t believe us? Grab a free trial for a limited time and see why it can be your go-to invoicing software.

FAQs