Based on a slightly modified Dollarhide system, apologies to William Dollarhide

Genealogist often adopt a numbering system to keep everyone straight in their database. Ahnentafel numbering and collateral numbering systems abound. William Dollarhide proposed a system that seems to marry all the strengths of a number of system. His work and thoughts on this subject are no longer on the web so far as I can determine, but they can be found on the internet archive Way Back Machine. I adopted this system with some modifications and love it. If you already know the Dollarhide system, the specific modifications proposed by Cole (me) are listed separately Modification to Dollarhide Numbering. If you just want to understand the modified system from scratch, the brief tutorial below will hopefully suffice. Information on more numbering systems (and this one) can be found in the Encyclopedia of Genealogy.

Basics

Starting Person
First, a person is selected as the starting point who is directly related to those you are studying. All people in the database related in any way to this person can be numbered using this system. The starting person is person 1. This can be anyone , but it will make sense if this is either your oldest person for a descendant project or your youngest for an ancestry project.
 

Direct Ancestors
Using traditional Ahnentafel or ancestry numbering, the starting person's father is person 2, their mother is person 3, paternal grandfather... person 4, paternal grandmother ...person 5, etc. Each person's father is double their own number; each person's mother is double plus 1. Unlike Ahnentafel numbering, Dollarhide prescribes adding a decimal point and 0 (".0") to the number of each direct ancestor. This is a very important modification as we shall see. All direct ancestors have a number that ends in ".0". When presented with a list (or items labeled with the numbers), it is very easy to identify direct ancestors.

Here is an example of a starting person and their parents and grandparents:

Siblings
Dollarhide prescribes that siblings and half-siblings of direct ancestors are numbered using a .1, .2, .3, .4, etc. suffix. Thus all the (half-)siblings of person 3.0 are labeled 3.1, 3.2, 3.3, 3.4, etc. They are numbered in birth order (or whatever the genealogists believes is the best order when birth order is not available). A modification I have made is to skip the .n label corresponding to the direct ancestor. This allows us to see the birth order position of the direct ancestor at a glance.

The entire set of siblings, including half siblings through each direct ancestor parent, receive numbers that have the person number of the direct ancestor. This makes it easy to identify these extended families.

It is not uncommon to run out of numbers in the .1, .2, ... .8, .9 series. In this case, we start with letters .A, .B, .C, .D, etc...

Here is an example of how to number siblings and half-siblings of a director answer 12.0:

Secondary Spouses
You will note in the above example, we did not have numbers for the spouses. Dollarhide prescribes denoting a non-direct ancestor spouse by a * suffix on the spouses number. If there are more than one marriage, use *1, *2, *3, etc., in order of the marriage (or whatever order the genealogist things best if this is not available). I have modified this system and skip the number of marriage corresponding to a marriage of the two direct ancestors. This system applies to any marriage not of two direct ancestors. Thus we can number spouses of siblings (12.1*) or previous or subsequent spouses of direct ancestors. We have not yet described descendant numbering (next section) but we also number spouses of descendants in the same way.

 Now we can label the spouses from the same example in the sibling discussion using secondary spouse labeling:

 Decendents
Dollarhide prescribed numbering descendent's as well as ancestors. Descendants are numbered by appending a new number to their already numbered parent. Thus descendent's of the starting person (who is 1.0) become 1.1, 1.2, 1.3, etc. Descendants of a sibling of a direct ancestor 9.0 are 9.1, 9.2, 9.3, etc. This is applied as often as needed, so grandchildren of the starting person are 1.11, 1.12, 1.13 (children of 1.1) and 1.21, 1.22, 1.23 (children of 1.2). Note that some cousins have a nice property in that they have similar numbers using their common ancestor. Of course, cousins is a complex issue.

Complications

Trees within trees
Using the basic methods already described, it is possible to number all ancestors and spouses going backward. Additionally it is possible to begin going forward from any of the direct ancestors. This allows us to number lots of the common people in our databases. But what of mother's in law? Brothers and sisters of in-laws? Or even their descendants? To do this we need to stop and examine what the numbers are saying a bit more.
 
Dollarhide numbering conveniently allows us to go backward in the family line (2.0 to 4.0), to go laterally in a family (4.1, 4.2, 4.3) and to start going down the family tree again (4.31, 4.32, 4.33). This change in direction from backward to forward seems family natural. Dollarhide prescribes that we can change direction in another way, too. When we change from sibling or descendancy back to ancestry, we use a "/" to show this. If we wish to start going backward from certain spouse labeled person, 9.2*1, we can talk about their father as 9.2*1/2.0. We treat everything on the left of the "/" as person 1 and move backward using the basic rules again. 9.2*1/3.0 is the mother of 9.2*1. The tree can continue backward (using ancestry numbering), and indeed forward (using descendant numbering). This change of direction can be applied at any level of descendancy. I think of it is a tree that grows within the tree.

Temporary Assignments
Sometimes we just don't know the birth or marriage orders. In such cases, I sometimes use a series x, y, z (or other "late alphabet" letters). This shows that I really don't know and encourages me to research and find out. It allows me to number some other relatives on the basis of the temporary number. Of course, if this gets out of hand you will find it not very useful. If it remains a long term assignment, it is probably best to simply number the item with best available inference (or guess) and move forward.

Multiple Starting Persons
It is possible to denote more than one starting point. You might want to do this for several different reasons. First, it might be desired to describe more than one set of people for whom no relationship can be exactly described (because they are unrelated, or because the relationship cannot yet be described). In the case, we designate the person one but put a unique prefix to work for each, for example person 1 to your main tree, but person Z1 for a set of related people whom you eventually intend to find a precise relation as a fruit of research. Or two equally important trees could be described with designations A1 and B1 for root people. When people are related in some way to both root persons, you must choose between two possible labels, or you could at that point renumber everyone is one or the other trees (using the common person as the starting point).

Another reason for multiple roots can be a political issue of naming a set of siblings as root. This can be done by designating all siblings as 1.x. For example, 1.1, 1.2, and 1.3 for three brothers and sisters who will all be treated as root person. If the children do not have the same parents, one set is selected for the direct descendant line, and the other parents are labeled using secondary spouse names. I used this situation for my database, because I wanted my two daughters to be the root people, 1.1 and 1.2.

Another reason that I have encountered for using multiple roots is to truncate an extremely deep ancestry numbering. Many tools (PAF being one of them) have a limited number of characters in their custom number fields. When you reach the limit, you must designate a person as a new root. This shortens the numbers again so they fit in the fields. Using the on-line and printed research material, it is not uncommon to have Ahnentafel numbers that go into the 10's and 100's of millions. You must restart the numbering on such trees in many programs when this occurs.

Using the Labels

I assign the number manually in PAF & PAFWIZ using the custom ID field. I ask PAF & PAFWIZ to dispaly the custom ID after the names on the screen.
 
One of the most convenience ways I use the numbers is in labeling files on my computer. I actually uses the ids to label reports (e.g. 12.0 Individual Full Name.pdf, 12.0 & 13.0 Family Group Full Names.pdf, 12.0 Pedigree Full Name.pdf, etc), to label picture files (12.0 Name (date) Place.jpg), and sources (15.0 Birth Certificate Name Issuer), etc. You cannot use the * character in the file name nor the separator (/) in many operating systems, so you have to device a substitute. I use o for * and - for / (just for file names).