Thus, to avoid any delay on the part of your customers, it is important that you clearly discuss all the payment terms with them. To increase the likelihood of receiving invoice invoice number meaning payments on time, provide clear details about payment expectations. Your payment terms should specify the amount of time the buyer has to pay for the agreed-upon purchase.
It is not good to assign simple invoice numbers such as ‘1’, ‘2’, ‘3’, etc. This activity can be confusing when invoice numbers reach double or triple figures. Newly started businesses may not have large numbers of invoices in the beginning.
How to assign invoice numbers: Definition & examples
For instance, if you have a client named Mathias whose customer ID is number MA36, then the customer ID-based invoice number sequence would be MA36-001, MA36-002, MA36-003, and so on. The details included in a typical invoice are not necessarily unique. In such cases, locating a specific invoice by job type or client details may not yield the desired results.
Even if mistakes do occur, the software immediately pinpoints the location of the error and how to solve it. According to SAP Concur, duplicate payments cost small startups as much as $12,000 a month. And one of the main causes for this fee is incorrect invoice numbers. We suggest updating your invoice numbers only at the end of an accounting period, which corresponds to the business fiscal year. This way you avoid confusion and prevent any errors from getting made. The last option for referencing your invoices is through the project number.
Proforma invoice
In other cases, customers may not have an issue with the invoice, but rather simply haven’t paid the invoice according to the agreed payment terms. In this situation, contact your customer about the unpaid invoice as soon as possible. If your attempts to collect payment aren’t successful, you have a few options, such as invoice factoring or taking legal action. Letting customers know you offer discounts for early payments or charge late fees on overdue invoices may encourage them to make timely payments. As a small business owner, you might be sending a bunch of invoices each month to your customers.
I’ve been using Hiveage’s predecessor Curdbee for years, and Hiveage improves on Curdbee in every way. The interface is polished, fast, fluid and intuitive, and the amount of features available are pretty amazing. It will be my project management software for the foreseeable future, and the only one I recommend to clients and colleagues. If you do project-based work, another way to format your invoice number is to have a project code as the prefix. Thus, this requires each of your projects to have a unique code as well. Then, each of the invoices raised for that particular project can have the project code as the invoice number prefix.