As a freelancer, you have to secure clients, manage projects, attend meetings and calls, take care of taxes, and invoice clients for work completed—all on your own. Needless to say, freelancing can get pretty messy and chaotic.
For that reason, experienced freelancers recommend beginners adopt disciplined habits early on. Numbering your invoices is one of the most highly recommended habits offered to newbie freelancers. It not only helps track payments and follow up with clients, but it also reflects professionalism.
What Is an Invoice Number?
An invoice number, also known as a reference number or invoice ID, is a unique number assigned to each invoice.
Because it’s always a freelancer that sends the invoice to clients, it is up to you to manually generate this unique number and assign it to each invoice. If you are using a freelancer invoice template from an invoice generator, it will be automatically generated.
The purpose of this number is to help you organize your financial records and track payments. For your clients, this number serves as an identifier and helps them track which invoices they’ve processed and paid, and which ones they haven’t.
This is particularly useful when you have an ongoing project. For example, say you write a blog post for a client at $100 per post. You write two posts every month and do not name the posts in your invoice. All of your invoices will have the same content (i.e., the same total amount, the same quantity of deliverables, the same contact details, etc.).
The only way to differentiate these invoices would be the invoice number. Including this number will help both parties keep track of payments.
When you number invoices, each should have at least three digits; some invoice numbering systems have as many as ten digits. This depends on the type of format you choose.
How Do You Number Invoices?
In general, there are four methods of numbering invoices. These include:
By Date
Numbering invoices by date is by far the most common method. This method is easy to implement and makes invoices easy to track.
You can begin the invoice number with the project’s start date and issue a new number at every submission. The recommended format for incorporating the date is YYMMDD-Invoice Number.
For example, let’s say the date today is May 5th, 2023. In this case, the first invoice number will be 230505-001. Similarly, the invoice you issue the next month for this account would be 230605-002, and so on. Whether you place the hyphen or not is up to you.
By Client
If you work with multiple clients, it’s a good idea to use this method. You can start with the client’s initials and number from there. For example, if your client’s name is John Doe, this is the first invoice number you can use: JD-001.
By Project
The formatting for this method is similar to the billing-by-client method. Use the initials of the project name and the number of the invoice from one. For example, if the project is about web design, the first invoice number will be WD-001.
You can also include the invoice issue date in this number. It would look like this: WD-230505001 or WD-230505-001.
However, note that this method might not be suitable if you are working on different types of projects for multiple clients.
By Sequence
Technically, all of the methods listed above use sequential numbering of invoices. However, with this method, the invoice number is based only on counting irrespective of the client, date, or type of work being performed. For example, your first three invoice numbers would look like this: 001, 002, 003, and so on.
Where Is the Invoice Number Located?
There’s no strict rule regarding the placement of the invoice number and it will depend on the freelancer invoice format you’re using. The two things you need to keep in mind are:
- Ensure that the number is prominent by using a large and bold font
- Ensure that you’re consistent about the placement of the invoice number, so your clients don’t have trouble locating it every time
Usually, the number is placed on top of the invoice in the header or right below the business logo and name.
In Summary
At first glance, invoice numbers may seem like an unnecessary detail—but this is far from the truth. As your freelance business grows and you need to send invoices to multiple clients, these numbers become even more essential for tracking the work you’ve done and making sure that clients are paying for your services in a timely manner. Using invoicing tools from Invoice Ninja can help organize and expedite this administrative task so you can focus on your core business.
