I keep it simple and very low cost without any special equipment. I write, in ink, on a small piece of usually white or light colored paper, 1/2 inch wide x 2 inch, the function of the wire, not just a number that would require keeping a list of numbers and functions. A written function allows one to know the purpose of the wire immediately, like while crawling under the layout. This is very helpful when searching for the purpose of a wire among many wires where all the wires have numbers.
I fasten the paper ID tag to the wires with regular clear shinny Scotch tape as I have found it more durable, tougher and longer lasting than the Scotch Magic tape that is frosty and can be written on. The regular Scotch tape is wrapped around the wire and fastened to both sides of paper tag, covering all the paper on both sides. I often use double layers of regular Scotch tape. This will work with any size or gauge of wire. I have some tags put on by this method for many years on my layout.
I do not have to label most my wires on my layout. I used old control wire from a destroyed chemical plant that had four colored 14 ga wires in a cable. I used the black wires for common, and other colors for each transformer loop and for switches. The color gives at indication as to the function. Where the wires all meet at the control panel, I can tell the wire function from the switch it goes to as the switch functions are labeled or known from the track diagram on the control panel. These two means has allowed most wires to not requiring labeling.
Charlie