Debitoor Dictionary

Accounting terms explained in a simple way

Over 150 Articles for Founders and Entrepreneurs

  1. Accounting year
  2. Credit note
  3. Invoice
  4. Proforma invoice
  5. Quotation

Invoice number - What is an invoice number?

An invoice number is a unique, sequential code that is systematically assigned to invoices.

Create invoices with custom, automatically-updated invoice numbers with Debitoor invoicing software. Try Debitoor free for 7 days.

Invoice numbers are one of the most important aspects of invoicing as they ensure that income is properly documented for tax and accounting purposes; they also make it easier to track payments.

Each invoice issued should be assigned a unique invoice number. The invoice number should always be clearly stated on the invoice – without an invoice number, an invoice is not considered a legal document.

As proforma invoices are not ‘true’ invoices, they should not be given invoice numbers.

How to assign invoice numbers

Invoice numbers should be assigned sequentially, meaning that the number of each new invoice increases. Legally, an invoice number sequence should never contain repeats or gaps.

It is not a good idea to simply number invoices '1', '2', '3', etc. as this can be confusing when invoice numbers reach double or triple figures. New businesses may not have high numbers of invoices to begin with, but it is important to consider future growth when choosing an effective invoice numbering system.

A common way to create a longer, more specific, invoice number is to include month or year when the invoice was issued. For example, within a sequence which refers to the year, the first invoice in 2018 could be numbered '180001'. The next invoices would be '180002', '180003', and so on. At the start of a new year, the numbers would be reset. The first invoice number of 2019 would be '190001'.

This system allows you to quickly see which year an invoice is issued and still follows the sequential numbering requirement.

Find out the meaning of an invoice number with Debitoor invoicing and accounting software

Alphanumeric invoice numbers

An invoice number doesn’t always contain just numbers – it’s also possible to create a unique code which includes numbers, letters, and special characters such as slashes (/) or dashes (-).

Adding letters and characters to an invoice number series can help make it easier to organise records and identify invoices.

An alphanumeric invoice number series must follow the same rules as regular invoice numbers series – they should be sequential and should never contain gaps.

Letters can be used to identify different types of documents – for example, an invoice number sequence could contain 'INV' and a quotation number sequence could contain 'QUT'. If you choose to include letters in your invoice number series, the letters should not be changed – only numbers should increase.

Examples of alphanumeric invoice sequences include:

  • 2018/INV/0001
  • 18-QUT-0001
  • 2018/0001
  • 2018-0001
  • 18/0001

When to update invoice numbers

If you use an invoice number series which follows the date, it should be updated accordingly. For example, invoice number 'INV-17-12-009' includes the date and year, referring to the ninth invoice issued in December 2017. The first invoice of the next month, January 2018, would be numbered 'INV-18-01-001'.

If you want to change your invoice number series entirely, it is best to wait until the next accounting period as this helps avoid confusion and prevents missing or duplicating invoice numbers.

However you change your invoice number series, you should be sure that you do not repeat or leave out numbers. This means that if your last invoice number was ‘023’, your next invoice number must include '024' – for example '18/INV/024' or '2018-024'.

Invoice numbers and deleted invoices

As a standard rule, invoices should not be deleted. Because invoices are numbered sequentially, an invoice that has been completed in your records and is then deleted could show up as a gap in your financial records.

If you want to remove a transaction, it is usually better to issue a credit note for the same amount. This will effectively cancel-out a transaction, while ensuring that your number sequence is complete.

Invoice numbers with Debitoor

With Debitoor invoicing software its easy to keep track of your invoice numbers.

Choose your own custom invoice number series by typing your preferred number into the ‘Invoice No.’ box. The number will automatically be updated to the following sequential number whenever you create a new quote or invoice.

Invoice numbers are an important part of the invoicing process, find out more about how to assign invoice numbers and what invoice numbers mean with Debitoor