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How to Change an Invoice Number in QuickBooks Online
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Invoice numbers serve a couple of important purposes in your business accounting operations. Firstly, invoice numbers help you catalog your invoices, making it easier for you to track what your customers owe you. This, in turn, helps you keep your accounts receivable up to date, which improves your business’s cash flow.
Secondly, invoice numbers serve as a reference for your customers. When you use invoice numbers, you and your customers can rest assured you are referring to the same document. Additionally, your customers use your invoice numbers to track bills in their accounting system. This helps them with their internal accounting and checks and balances.
Because of their importance, you want to make sure you have a good invoice numbering system in place. You also don’t want to change your numbering system unless it’s absolutely necessary. In this guide, we’ll show you how to change an invoice number in QuickBooks Online. We’ll also look at some reasons why you might want to change an invoice number in the first place.
How to Change an Invoice Number in QuickBooks Online: Step-by-Step Instructions
Below, we’ll walk you step-by-step through how to change an invoice number in QuickBooks Online. Keep in mind, Intuit changes the user interface for QuickBooks Online regularly, and sometimes they roll out the changes in phases. This means your screen might look different from the following screenshots, but the process should remain the same.
Enable Customized Invoice Numbers
In order to change invoice numbers in QuickBooks Online, you’ll first need to enable the option to customize transaction numbers.
1. On any non-form screen in QuickBooks Online, click on the Gear icon in the top right corner, then click Account and Settings under Your Company. A “non-form” screen is any screen that isn’t a check, deposit, invoice, sales receipt, etc. We typically start this process from the Dashboard.
2. Click the Sales tab on the left-hand menu, then click the pencil icon for the “Sales Form Content” section.
3. Select the checkbox next to “Custom transaction numbers,” then click Save.
Prior to enabling customized invoice numbers, the Invoice form in QuickBooks Online looked like this:
After you enable the customized transaction numbers option, your Invoice form will look like this:
Notice the invoice now shows the invoice number in the top left-hand corner. There’s also an editable “Invoice No.” box on the right-hand side of the invoice, right below the Balance Due.
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Change an Invoice Number
1. From the left-hand menu, hover over Sales, then click Invoices.
2. Select the invoice you want to edit from the list on the next screen. You can click anywhere in the area indicated by the red box to open the invoice.
3. On the invoice form, change the number in the “Invoice No.” box to the invoice number you wish to use. In this case, we’re going to change the invoice number from 1016 to 1012. You’ll notice the invoice number at the top left-hand corner of the screen changes when you edit the Invoice No. box.
4. Let’s say you’ve previously used 1012 as an invoice number. Whenever you try to reuse a transaction number in QuickBooks Online, you will get a warning like the one below. (It’s possible to disable this setting, but we don’t recommend it.) Note that your invoice numbering will be reset starting with 1012 if you accept this change.
If you’re sure you want to use this number, click the Yes button. Otherwise, click the No button to change the invoice number to a number that is not a duplicate.
Keep in mind: You will only get this warning if you try to reuse a previously used transaction number. If you click Save and don’t get this warning (or if you get this warning and click Yes) your invoice number will be updated, and your next invoice number will be the following number in the sequence.
Related : How to reconcile in QuickBooks
Stay Organized
When it comes to renumbering invoices, QuickBooks Online will let you do pretty much anything you want to do after clearing a warning. Although this flexibility allows you to fully customize your invoice numbers, it can wreak havoc on your numbering system.
In the example above, let’s say we accepted the change, so our next invoice number is automatically 1013. But there was another invoice #1013 in QuickBooks Online, so we receive another error message. The same thing happens for invoice #1014.
At the same time, we were creating duplicate invoice numbers for each consecutive invoice, until we “caught up” to the last used invoice number prior to resetting the invoice number for our sample invoice.
Then, when a customer calls and asks to speak about their invoice and refers to an invoice with a duplicated number, we have to make sure we are looking at the correct invoice. And, when customers pay their invoices, we have to make doubly sure we are applying the payment to the correct invoice and not issuing credit to the wrong customer.
If you decide to customize invoice numbers for each individual customer, or if you choose to change an invoice number that could possibly reset your invoice numbering, we recommend keeping a log of the next invoice number in your numbering sequence. Make sure anyone who issues invoices through QuickBooks Online has access to this log and understands the importance of following your established invoice numbering protocol.
This simple measure will save you innumerable headaches.
Why Change an Invoice Number?
You now know how to change an invoice number in QuickBooks Online, but why would you want to? Many businesses take a “set it and forget it” approach to their invoice numbering system—letting their accounting software set the first invoice number and then assign future numbers automatically. Although there’s nothing wrong with this, some business owners don’t like the idea of sending a customer an invoice with a low invoice number.
Credibility
Consider this: You’ve just started your business, but you have years of experience in your field. You use this experience as a selling point for your business, and you land your first client. When you produce the invoice for the work you’ve done, you notice the invoice number is… 1. Or maybe it’s 0001.
Or maybe you’ve been in business for decades, but you’ve just switched accounting software. Suddenly, you’re sending out invoices with low invoice numbers, making it appear that you haven’t been in business for very long at all.
Both of these scenarios can cause customers to question whether you truly are as experienced as you claim to be. Of course, your work will speak for itself, but when you’re starting a new customer relationship, appearances are important.Related : How to delete a duplicate payment in quickbooks
Customization
Beyond appearances, though, you might choose to adopt a custom invoice numbering system for other reasons. Perhaps you like to make your customers feel special by incorporating their names—or part of their names—in your invoice numbers. Or maybe you’ve decided it’s easier for you to track certain aspects of your business internally by customizing invoice numbers to include job numbers, dates, or other information.
Correcting Errors
Sometimes, though, your reasons for wanting to change an invoice number are simpler. Maybe you made an error on an invoice in a prior accounting period, and you want to reissue the invoice in the current accounting period. You create a new invoice, but your accounting system automatically assigns the next number in your numbering sequence to it. Instead of sending out an invoice with the new invoice number—possibly causing confusion for your customer—you want to use the same number as you used on the original invoice. This necessitates changing the invoice number assigned by your accounting software.
Note: If you decide to do the above, make sure to create a credit memo in the current accounting period for the old invoice and apply it to the original invoice to keep your accounts receivable accurate. Also, be sure you note somewhere on the revised invoice that the new invoice replaces a previous billing. This will help prevent confusion for you, your staff, and your customer.
The Bottom Line
Invoice numbers serve important purposes for both you and your customers. When you give careful thought to your invoice numbering protocol, you can creatively customize your invoices to help you with your internal tracking and to enhance your customers’ experience with you.
QuickBooks Online makes it easy to customize and change your invoice numbers, but this ease of use comes with some dangers. If you decide to customize and change your invoice numbers, keeping a log of the next number in your invoice numbering sequence is essential to prevent the accidental creation of multiple invoices with the same number. You must also make sure everyone in your business who creates invoices in QuickBooks Online has access to this log and understands the importance of following your invoice numbering protocols.
Should you have any questions about setting up a customized invoice numbering sequence or changing invoice numbers, reach out to a certified QuickBooks Online ProAdvisor or a bookkeeper or accountant experienced in QuickBooks Online. These professionals can help you devise a numbering system that will work for your business, and they can help you set up the proper processes to avoid troublesome errors.