This is the first in a series of blog posts about bookkeeping. I will be keeping them short and sweet, so each time I will focus on something small.
Why have invoice numbers?
The obvious answer is to distinguish between different sales transactions. This might seem obvious to you, in which case I apologise. Quite often, however, I come across invoices without them so it seems worth pointing out.
Some businesses might well see it as more bother that it’s worth – if your business involves hand building ceremonial coaches for heads of state and each one takes ten years to complete, then just the date will be enough to make each invoice unique. If, on the other hand, you are a well-known online retailer with millions of customers worldwide buying multiple items for a few pounds at a time, you will need a reference or things are going to get messy very quickly.
I imagine most of us fall somewhere in between those two extremes, but if you don’t already use invoice numbers, consider adding them now. It helps you and your customer to know exactly which bit of paper is which.
Another reason for using them is to help with preventing fraud. We’ve all heard of ways of “cooking the books”. Using sequential invoice numbers makes it obvious if one is missing, or even duplicated.
If you are VAT registered, unique sequential numbers are a requirement for the invoice to be valid. (For more information on VAT invoices, see the government guidelines here: https://www.gov.uk/vat-record-keeping/vat-invoices .)
I hope you’ve found this useful. More bookkeeping tips to follow!