In general, there are two different methods you can use when preparing references for a paper you may be writing. Generically, these are known as the name-date system and citation-sequence system. The former is demonstrated by APA and the latter by Vancouver style referencing. Which one you use depends on the journal to which you plan to submit.
In name-date system, you cite a reference in text, by including author name and publication date in parentheses. You then put that reference at the end of the paper, in the reference list, and in alphabetical order. An example would be something like this: “In the seminal work by Andrews (Andrews, 1998)...” the chief benefit to this system is the ease of update and correction- if you need to add a reference, it can easily be done and the same holds true if you need to delete a reference. But the main disadvantage here is that it ends up with strings of words interrupting the text that the reader is looking at, which can be frustrating to read. This is often referred to as APA style, based on the American Psychological Association; it may also be referred to as Oxford style.
In a citation-sequence system, which is more common in biomedical publication, the citation is made by number in the test, in the order of occurrence. The reference list at the end is thus the actual order of citation of each reference. If you need to cite an earlier reference, you do so by reference to its original citation number. An example would be: “In the seminal work by Andrews (1)…” The chief benefit of this system is that it makes the text much easier to read, since there are fewer interruptions in the flow of words. Its primary disadvantage is that if you need to add or delete a reference, you will then need to renumber your reference list and also change all the numbers in text to make sure they still match. It is for this reason that we often see people using reference managers such as EndNote or Reference Manager. I caution, though, that reference managers are only as good as the information you import. This system is also referred to as Vancouver style, after the so-called Vancouver Accords followed by many biomedical journals.
Both systems are seen in scientific publication, but Vancouver is more common. You should be familiar with both and carefully follow journal instructions related to references. They are certainly the most common source of problems for editors.