How to format invoice numbers
Invoice numbers are a mandatory invoice field in the UK. They’re unique identification numbers that are assigned to each individual invoice that a business issues.
This article explains why invoice numbers are important, how to format them, and how to use software to automatically generate your invoice numbers to be compliant under UK law.Start invoicing for free
Why are invoice numbers important?
Invoice numbers are one of the most important fields on an invoice because they ensure that your income is correctly documented for accounting and tax purposes.
Every business is required to keep accurate records of their sales for at least 6 years from the end of the accounting period it relates to. If any details are incorrect or missing, including your invoice numbers, you may incur fines from HMRC.
Invoice numbers help your accountant easily reconcile your accounts, and help your business keep track of all of your invoices and whether they have been paid. Naturally, things like managing outstanding invoices will be simpler if all of your documents are organised in sequential order.
Invoice number format
Invoice numbers play an important part of maintaining order in your business. It’s therefore important that they are formatted correctly.
Do invoice numbers need to be sequential?
Your invoice numbers must follow a sequence that cannot contain any repeated or missing numbers. Whilst it’s possible to change your invoicing number sequence, it’s not a good idea to do this too often.
Therefore, before you start invoicing, you must consider what invoice numbering system would benefit your business and simplify your record keeping. For example, it’s common to include the date the invoice was issued in an invoice number.
What should I include in my invoice numbers?
Most accountants recommend including the year in your invoicing sequence. If you issue several different types of sales documents, you may also consider adding prefixes such as “INV”, “QU”, “CN”, and “DL” to differentiate between invoices, quotes, credit notes, and delivery notes.
Some common invoice number formats include:
2021-001: This includes the year the invoice was issued, and the number of the invoice within that year.
INV-2021-001: This includes “INV” to state that the document is an invoice, as well as the year and invoice number within that year.
2021/01-001: This includes the year, the month, and the number of the invoice within that month. If your business issues several invoices each month, this format will help you find invoices quickly.
Your invoice numbers can include letters, numbers, and special characters such as “/” and “-”. We recommend using a simple and easy to understand format that includes the year.
How to generate your invoice numbers
If you issue an invoice with an incorrect invoice number, you will need to cancel the invoice and make a new one. To cancel an invoice, you need to issue a credit note.
Some businesses create their invoice template using Word or Excel, however, with these programs, you will need to either manually type the invoice number, or use a formula to generate one. You might inadvertently skip a number or use a repeated number if used incorrectly.
Invoicing software, on the other hand, is specifically designed to create compliant professional invoices. Most invoicing software uses machine learning to learn your numbering sequence, and automatically apply the next invoice number in the sequence. It will also ensure that there are no duplicates or gaps.
Invoice number considerations
Invoices need to follow their own numbering system. Every type of sales document, for instance, quotes and delivery notes, should each have their own sequence.
Once you’ve started invoicing, you should try not to change your numbering sequence unless absolutely necessary. However, each new year, you should update the year if it’s included in your invoice numbers.
Ensure that each and every invoice includes a unique invoice number and your sequence doesn’t contain any missing numbers.
Invoicing software that generates your invoice numbers
SumUp Invoices is invoicing software that helps you to create professional invoices fast. Your invoice numbers are automatically generated and if you decide to change the numbering format, the system will automatically detect the next one in the sequence.
You can create and issue an invoice to your customer’s email in less than 1 minute. If you already have a list of customers and suppliers, you can import them into the system for quick selection on our premade template.
SumUp Invoices can also help you get paid faster! If you enable payment links in your profile, a secure payment link will be added to your invoices so your customers can pay the invoice instantly online.Start invoicing for free