It’s like you made an entry into your accounts and you had your document for it. How do you connect those two? I mean yes, of course right now you know and after a short while you may still remember the document this entry is made based on, but what about tomorrow or the day after tomorrow? Will you still remember the document? I sincerely doubt it and this is why referencing was invented. 

Referencing in accounting is something you should do naturally, but also systematically. Naturally in the sense that you just do it and you always do it without forgetting or arguing yourself whether to do it. The system itself is entirely up to you to work out and in doing so I’d like you to think about few things:

• It’s the same with everything – keep it easy – there’s no point in making your system overly complicated, for an example giving all documents numbers that are like 10 digits long. Is there a reason for it? I doubt it.
• You’re making your own life a lot easier if the system is understandable. For an example, why not but the letter “P” in front of all invoices you’ve received from your suppliers? It would refer to a “purchase” and in this case you’d know where to look for your document (from the invoices folders obviously).
• Think which documents you want to number separately (i.e. documents you’ll be storing separately) – is it the invoices, purchase orders, tax statement and whatnot. If you’re storing them separately, it’s advisable to also keep their numbering separate and keeping our previous point in mind, have a meaningful letter for an example in the coding.
• I know that it sounds like so silly, but do make it a habit to write those numbers in one understandable format, on the same place on documents and preferably also in different colour, i.e. if the document is all with black text the reference number should be written in blue for an example. Just so it’s easily notable.

Referencing properly is the key to having meaning of all of those documents you’ve stored. Without references how would you ever find what you’re looking for? And what a mess it would be. So take the time and think through which numbering system works the best for you. Remember, there are no ground rules by law or some such, it’s all you and it’s also you who has to work with it.