Last updated November 6, 2026
General information, not tax or legal advice. The rules depend on your country and your situation, so check anything with a tax or legal consequence with your accountant.
Number invoices in one sequence that only goes up, never reuse a number, and assign it at the moment you issue the invoice. A format such as INV-2026-0042, with a prefix, the year and a counter, works almost everywhere. EU and UK VAT rules require a sequential number that uniquely identifies each invoice.
What do the rules actually say about invoice numbers?
The rules on invoice numbers ask for less than most people assume. Article 226(2) of the EU VAT Directive requires "a sequential number, based on one or more series, which uniquely identifies the invoice". HMRC's VAT guide uses nearly the same words at paragraph 16.3.1. If you aren't VAT registered, GOV.UK still asks for a unique identification number.
Neither text sets a format or a starting point, or says anything about letters or the year. "One or more series" means separate runs are allowed in principle.
Whether "sequential" also means "no gaps" depends on where you are. France's tax guidance asks for a number based on a chronological and continuous sequence, and allows separate series only where the way you operate justifies them. In Germany, a tax court held in 2017 that gaps alone didn't entitle the tax office to estimate extra income. Build to the stricter standard: no gaps, and a written reason if one appears.
Which invoice number format should you use?
The best invoice number format for most small businesses is a prefix, the year and a four-digit counter, because it sorts properly, stays unique across years and tells invoices apart from your other documents.
| Format | Example | Suits | Watch out for |
|---|---|---|---|
| Plain counter | 1042 | Very small businesses | Never restart it, or you'll repeat numbers |
| Year and counter | 2026-0042 | Most businesses | None in particular |
| Prefix, year, counter | INV-2026-0042 | Anyone who also numbers quotes or orders | Keep the prefix stable |
| Date based | 20260314-01 | A few invoices a day | A skipped day looks the same as a missing invoice |
| Separate series by branch | TLN-2026-0042 | Several sites billing independently | Each run must stay unbroken, and some countries want a reason for it |
| Customer code and counter | ACME-007 | Nobody, really | Every customer becomes its own series, so you can't show the set is complete |
Customer-coded numbers are the popular mistake. They look organised, and they turn one sequence into dozens. If a customer wants its own reference on the invoice, put that in a separate field, such as the purchase order number.
Should invoice numbers restart every year?
Invoice numbers can restart each year as long as the year is part of the number, so that INV-2026-0001 and INV-2027-0001 stay distinct. A plain counter can't restart, because a second invoice 0001 breaks the rule that each number identifies one invoice.
Year-based numbering also makes a year's invoices easy to count. If your last invoice of 2026 is INV-2026-0214, you should be able to produce 214 documents for that year, cancelled ones included.
What number should your first invoice have?
Your first invoice can have any number, because EU and UK VAT rules don't set a starting point. Starting at 1001 is fine if you'd rather not tell your first customer they're your first. What matters is that the sequence runs on from there, and that a note in your records says where it started, so nobody hunts for invoices 1 to 1000.
What happens to the number when an invoice is cancelled?
A cancelled invoice keeps its number for good, and the replacement takes the next one. That's the rule that catches people out, because fixing the original feels tidier.
| What happened | What to do with the number |
|---|---|
| Draft deleted, never sent | Nothing, if numbers are assigned on issue: it never had one |
| Sent with an error | Keep it, cancel it with a credit note or by voiding it, and issue a new invoice under the next number |
| Customer cancelled the deal | Keep it, and cancel it the same way |
| A number was skipped | Don't fill it in later or renumber anything. Write down the reason and keep the note |
| Two invoices share a number | Keep the first, cancel the second, reissue it under the next number |
| You've changed software | Carry on from your last number, or use a new prefix so the two systems can't collide |
Here's an invented example of a register that stays clean through a messy week:
| Number | Date | Customer | Net | Status |
|---|---|---|---|---|
| INV-2026-0040 | 2 March | Oak Dental | €600 | Paid |
| INV-2026-0041 | 3 March | Pine Logistics | €1,200 | Void: billed to the wrong company |
| INV-2026-0042 | 3 March | Fern Café | €1,200 | Issued: replaces 0041 |
| INV-2026-0043 | 9 March | Oak Dental | €450 | Paid |
Anyone reading that can account for every number, including the mistake. That's the whole purpose of the sequence: it shows nothing has been left out of your books.
How do you check an invoice sequence for gaps?
You can check an invoice sequence for gaps in a spreadsheet in about two minutes. Export your invoice list and sort it by number, with the numbers in column A. Then:
- In B2, pull out the counter:
=VALUE(RIGHT(A2,4)), and copy it down. - In C3, compare neighbours:
=B3-B2, and copy it down. - Filter column C for anything other than 1.
A 2 is one missing number, a 0 is a duplicate, and a big negative number usually marks a new year. Run it per year, and before you hand anything to your accountant, so you can explain each gap while you still remember the reason.
Numbering mistakes that cost time later
- Numbering when the draft is created. Every abandoned draft then leaves a gap. Assign the number when you issue.
- Reusing a voided number for the corrected invoice. The customer now holds two different documents with one number.
- Renumbering at year end to close gaps. That destroys the link to what the customer holds, and looks worse than any gap.
- Sharing a spreadsheet counter. Two people invoicing on the same morning will produce the same number sooner or later.
- Sharing a sequence with quotes. Declined quotes leave holes. Give quotes and invoices separate runs.
Invoice numbering in ERPFlow
ERPFlow numbers invoices for you, as INV-YYYY-NNNN. A draft has no number, and it gets one when it's issued, so deleting a draft leaves no gap. The year comes from the issue date and the counter restarts each year, per organisation. A draft back-dated into last year takes the next number in last year's run. A voided invoice keeps its number, and its PDF is stamped VOID. The correction, made with Duplicate, is a new draft that gets a new number.
You can change the prefix in Settings > Business Info. That affects future invoices only, and the counter carries on. Quotes and orders run on their own counters, as QUO- and ORD-.
ERPFlow keeps one invoice series per organisation, so there are no separate runs by branch, and there's no setting for a custom starting number. Invoices brought in by CSV import keep the numbers in the file, and the import doesn't move the counter, so if you're importing this year's invoices from another system, set a different prefix for the new ones to stop numbers repeating.