• 1. Choose a Format
  • 2. Choose One Series or Several

A good invoice numbering system gives every invoice a unique number from a series that runs in order, uses one format, and keeps a record of what happened to every number, including invoices you void. To set one up, choose a format, decide whether you need one series or several, pick a starting number, and keep a numbering log. For what UK and EU VAT rules require of invoice numbers, see what is an invoice number.

Billed publishes this page. It gives practical steps, not legal or tax advice. The rules on invoice numbers are quoted on the invoice number page; ask your accountant which apply to you.

1. Choose a Format

  • A plain number: 1001, 1002, 1003. Short, but it says nothing about the date or the client.
  • A prefix and a number: INV-1001. The prefix tells invoices apart from other documents, such as credit notes.
  • The year and a counter: 2027-001, 2027-002. The counter can start again each year, because the year keeps each number unique.
  • The year, month and a counter: 202703-001. The counter can start again each month.
  • A client code and a counter: ACME-001. You keep one counter for each client, and each client code has to be unique.

Pick the format before you send your first invoice under it, and use it for every invoice in that series.

2. Choose One Series or Several

A series is one run of numbers in order. You can run more than one at the same time, for example:

  • One series for each business line, such as A-2027-001 for design work and B-2027-001 for development.
  • A separate series for credit notes, such as CR-2027-001, each one referring to the invoice it corrects. See what is a credit invoice.

Each series still has to run in order on its own. The invoice number page quotes what HMRC says about running more than one sequence.

3. Pick a Starting Number

You don't have to start at 1. Choose a number, and run the series in order from there. The invoice number page quotes HMRC on starting from a number other than 1.

4. Keep a Numbering Log

For each number, record:

  • the date and the client;
  • the amount;
  • its status: sent, paid, partly paid or void;
  • any credit note issued against it.

With a log, every number in a series is accounted for, including ones you didn't send.

5. Handle Voided Invoices and Gaps

  • Don't delete a voided invoice or reuse its number. Mark it void and keep it in your records.
  • Explain every gap. If a number is missing from the series, the log should say why, such as an invoice canceled before it was sent.
  • Correct a sent invoice with a credit note, not by editing or reissuing it under the same number.

What a gap means for VAT purposes is covered on the invoice number page; ask your accountant how to record one.

6. Change Your Format Carefully

  • Don't renumber invoices you've already sent.
  • Switch on a clean date, such as the first day of a new year.
  • Note the switch in your log, with the last number in the old format and the first in the new one.

Worked Example: Choosing a Counter Length (sample figures)

A sample agency, invented for this example, expects to send 35 invoices a month for design work and 12 a month for development. It wants a year-based format with a three-digit counter that starts again each January.

  • Design series per year: 35 × 12 = 420 invoices, which fits in a three-digit counter (up to 999).
  • Development series per year: 12 × 12 = 144 invoices, which also fits.
  • If both shared one series: (35 + 12) × 12 = 47 × 12 = 564 invoices, which still fits.
  • The agency's choice: two series, A-2027-001 for design and B-2027-001 for development, so each business line can be checked on its own.
  • At the year end: after A-2027-420, the next design invoice is A-2028-001. It can't be confused with A-2027-001, because the year is part of the number.

Related Guides

FAQ

Can I start invoice numbers at any number?

For UK VAT invoices, HMRC says yes, as long as the series runs in order from that point; the invoice number page quotes it. For other countries, ask your accountant.

Can the counter start again each year?

A year-based format such as 2027-001 lets the counter start again each year while each number stays unique. Ask your accountant whether a yearly series suits the rules where you invoice, and note the switch in your numbering log.

What should I do if I void an invoice?

Keep it in your records, mark it void, and don't reuse its number. Record the reason in your numbering log so the gap in the series is explained.

Should credit notes use the invoice series?

A separate series, such as CR-2027-001, keeps credit notes apart from invoices. Each credit note should refer to the invoice it corrects. Ask your accountant which arrangement suits your records.

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