What the rules say
| Where | What the rules ask for |
|---|---|
| Australia | No number at all on the ATO's list for a tax invoice. A unique number is standard practice, and your records need to trace every sale. |
| New Zealand | No number in the GST record rules (taxable supply information). |
| United Kingdom | Every invoice needs a unique identification number. A VAT invoice's number must follow on from the last, in one or more series. |
| European Union | A VAT invoice needs "a sequential number, based on one or more series, which uniquely identifies the invoice", in every member state. |
| United States | No federal rule. The IRS expects records that support your income. |
Why number them in order anyway
- Your accountant expects it. A run of numbers with no gaps and no duplicates is how they check that every sale made it into your records.
- Missing payments stand out. INV-0024, 0025, 0027: where's 0026?
- Clients quote it. "INV-0027" in a bank transfer's reference is how you match money to invoices.
- Software keys on it. Imports, bank reconciliation and payment matching all work by invoice number, and duplicates cause trouble.
Formats that work
| Format | Example | Good for |
|---|---|---|
| Prefix and number | INV-0027 | Most sole traders. Simple, and the leading zeros keep it in order. |
| Year and number | 2026-014 | A count that restarts each year without ever repeating. |
| A series per business | MND-0027, PHO-0003 | Two trading names, so neither's numbers look like the other's. |
| A series per document | Q-0012, INV-0027 | Keeping quotes out of the invoice sequence. |
Avoid numbering by date alone (two invoices on one day collide) or by client name (the sequence disappears).
Where to start
At 1, or at any number you like. Starting at 1001 so your first client isn't obviously your first is common and perfectly fine. Where a rule exists, it's that each number follows the last, not that the first one is 1. Just don't jump around after that.
Mistakes, cancellations and gaps
- Never reuse or delete a number. If an invoice was wrong, cancel it and issue a new one with the next number. The cancelled one stays in your records, marked void.
- In the UK and EU, a VAT invoice that has been issued is corrected with a credit note, not edited or deleted.
- In Australia, if you're registered for GST and a sale changes after you've issued the tax invoice (a refund, a discount, a cancelled job), the document for the change is an adjustment note.
- A gap isn't a crime, but you should be able to explain it. A voided invoice that's still in your records explains itself.
Worked example
Mara's September. She sent INV-0025 to the wrong address, so she voided it and reissued the invoice as INV-0026.
| Number | Client | Status |
|---|---|---|
| INV-0024 | Fernway Bakery | Paid |
| INV-0025 | Corella Books | Void: wrong address |
| INV-0026 | Corella Books | Paid, replaces INV-0025 |
| INV-0027 | Hollis Landscaping | Sent |
No gaps, no duplicates, and the one mistake explains itself.