What the rules say
Most tax systems ask for the same three things from an invoice number:
- Unique. No two invoices may share a number. This is the one rule almost every country has.
- Sequential. Numbers follow a logical order, usually ascending. The UK (HMRC), Ireland, Germany (§ 14 Abs. 4 Nr. 4 UStG: „fortlaufende Nummer“, issued once) and the Netherlands all ask for a sequential number on a VAT invoice.
- Without gaps, in practice. Many EU tax inspectors check the sequence for holes, because a gap can mean an invoice was issued and never recorded. A gap is not automatically a breach, but you should be able to explain every one.
In the US there is no federal rule on invoice numbers. A clean sequence still makes bookkeeping, audits and payment matching far easier, and clients’ accounts-payable systems often reject duplicates.
What to do with a cancelled invoice
This is where most numbering trouble starts.
- Never delete an issued invoice and never reuse its number.
- If you made a mistake on an invoice you already sent, issue a credit note that refers to the original invoice and cancels it in full or in part. Then send a corrected invoice with the next free number.
- If you created a number but never sent the document, keep it anyway, mark it void and note why. That way the sequence has no unexplained gap.
Example: you sent INV-0057 for $1,200.00, but the agreed price was $1,020.00. Issue credit note CN-0009 for −$1,200.00 referencing INV-0057, then a new invoice INV-0058 for $1,020.00. Net effect in your books: $1,200.00 − $1,200.00 + $1,020.00 = $1,020.00 owed by the client. A simpler alternative is a partial credit note for −$180.00 ($1,200.00 − $1,020.00), which leaves INV-0057 standing at $1,020.00.
Numbering schemes with examples
| Scheme | Example | Good for | Watch out for |
|---|---|---|---|
| Simple counter | INV-0001, INV-0002 | Freelancers starting out | Use enough digits (0001) so files sort correctly |
| Year + counter | 2026-001, 2026-002 | Annual bookkeeping, yearly restart | Three digits caps you at 999 a year |
| Prefix + year + counter | RE-2026-0043 | German-style invoices (RE = Rechnung) | Keep the prefix the same all year |
| Client code + counter | ACME-0041, BETA-0042 | Seeing the client at a glance | Counter must still be shared across clients |
| Monthly scheme | FV/1/05/2026 | Common in Poland (faktura VAT) | Restarting each month needs extra care |
| Year + month + counter | 2026-05-014 | High volumes | Longer numbers are easier to mistype |
Whatever you pick, keep it short enough to read out on the phone, and avoid scheme changes mid-year unless you document them.
Separate series for different documents
Quotes, invoices and credit notes do different jobs, so give each its own series:
- Quotes and estimates: Q-2026-015. A quote is not a tax document, so a quote number has no effect on your invoice sequence. See quote vs estimate.
- Pro forma invoices: PF-2026-007. A pro forma is not an invoice either; keep it out of the invoice series. See proforma vs invoice.
- Invoices: INV-0058 or 2026-058.
- Credit notes: CN-0009. In many countries a credit note is part of your sales records too, so give it a clean sequence.
The Netherlands explicitly allows several invoice series, for example one per branch or per activity, as long as each is unique and sequential. Several series are common elsewhere too; just make sure no number can occur twice.
How our tool numbers your documents
The invoice generator and the other editors, such as the quote and receipt editors, keep a pattern per document type. A pattern is built from tokens:
| Token | Meaning | Example output |
|---|---|---|
| {YYYY} | Four-digit year | 2026 |
| {YY} | Two-digit year | 26 |
| {MM} | Month | 05 |
| {####} | Counter, padded to the number of # signs | 0043 |
| {CLIENT} | The client code from the saved client | ACME |
The English default is INV-{####}. How the counter moves:
- Next number = highest used number in that series + 1. If your last invoice was RE-2026-0042, the next suggestion is RE-2026-0043.
- Yearly reset. If the pattern contains a year, the counter restarts in a new year. An invoice dated 2 January 2027 after RE-2026-0043 becomes RE-2027-0001. The automatic reset is yearly; for a monthly scheme, check the suggested number at the start of each month and edit it if needed.
- Duplicate warning. If you type a number that already exists, the editor warns you: “Number already used on” followed by the date.
- Gap check. My documents shows an amber note when the sequence has a hole, so you can explain or fix it before your accountant asks.
Your numbering lives in your browser along with your documents. Download a backup from My documents regularly; clearing browser data resets everything.
Switching software mid-year
Moving from another program, a spreadsheet or a Word template? Continue the existing sequence:
- Find the last number you issued, say INV-0137.
- Set your pattern to match the old format, for example INV-{####}.
- On your first invoice here, type INV-0138 into the number field. From then on the tool suggests INV-0139, INV-0140 and so on, because it always takes the highest used number plus one.
- Keep the old invoices and a note of the switch date in your records.
If you would rather start a new format, do it at the start of a year, use a clearly different prefix so the two series cannot collide, and note the change for your accountant.