Basics

How to number invoices: simple rules that work in any country

Invoice numbers must be unique and in order. Here is a format that works anywhere, how to handle a new year, quotes and credit notes, and what to do with a cancelled invoice.

2 Oct 2026 · 6 min read

A draft has no number yet. When you issue it, it takes the next one in the series: your prefix, the financial year, then the count.

An invoice number looks like a small detail until someone asks about it: a customer's accounts team who has two invoices with the same number, or a tax officer who wants to know why invoice 41 is missing. A good numbering system answers those questions before they are asked, and it takes five minutes to set up.

This is a plain summary of what holds in most countries, not tax advice. The exact rules differ, so check anything unusual with your accountant.

The three rules that hold almost everywhere

Unique. No two invoices from your business share a number. Ever. Not across customers, not across years if your numbers do not include the year.
In order. Numbers go up one by one, in the order you issue the invoices. The UK and EU VAT rules ask for a unique number from a sequence, and India's GST rules ask for a running serial number.
Never reused. Once a number has been used, it stays with that invoice, even if the invoice is cancelled.

That is really all. The rest is about picking a format that keeps these three rules easy to follow.

A format that works anywhere

The most common pattern has three parts: a short prefix, the year, and a count. For example, OG/26-27/0046 is invoice 46 of the 2026-27 financial year for a business whose prefix is OG.

Prefix: two to four letters, often your business's initials. It tells your customer at a glance whose invoice it is.
Year: the financial year, like 26-27 in India or Australia where the year does not start in January, or 2026 where it does, like the US or Germany.
Count: padded with zeros (0001, 0002) so the numbers sort in the right order in a spreadsheet or a folder.

Keep it short. In India, the GST rules cap an invoice number at 16 characters, using only letters, digits, dashes and slashes. A short format fits that, and it is easier to read out on the phone and to type into a bank transfer note.

Avoid putting the customer's name or a running count per customer into the number. It looks tidy at first, but it makes it hard to prove that no invoice is missing, because there is no single sequence to check.

Starting again each year

Many countries let you start the count again at 0001 at the start of each financial year, as long as the year is part of the number, so every number stays unique. India allows this, and it is common in the UK, Europe and Australia. Some places expect one sequence that never resets, so if you are not sure, ask your accountant before the year turns. Either way, the year in the number makes it clear which series an invoice belongs to.

Quotes and credit notes get their own series

A quotation is not an invoice, so it should not use an invoice number. If it did, every quote that a customer turns down would leave a gap in your invoices. Give quotations their own series, like QT/26-27/0012, and give credit notes their own too, like CN/26-27/0003. Each counts on its own. More on the difference in our guide to quotations and proforma invoices.

Invoices, quotations and credit notes each count on their own. A quote that never turns into a sale leaves no gap in your invoices.

What to do with a cancelled invoice

Mistakes happen: the wrong amount, the wrong customer, a sale that fell through. Do not delete the invoice and reuse its number. Mark it as cancelled and keep it, so the number is still accounted for. Then issue a new invoice with the next number.

If the customer has already received it, or it has gone into a tax return, the usual fix is a credit note that refers to the original invoice. A credit note can also cover a part, like a discount agreed later or one item sent back, without cancelling the whole invoice.

Invoice 0119 had the wrong amount. It is cancelled, not deleted, so it keeps its number and the list has no hole. The corrected invoice takes the next number.

What about gaps?

A gap is not a crime, but it is a question waiting to be asked. The usual causes are a number typed by hand, a deleted invoice, or two people numbering invoices from two different spreadsheets. If you have a gap, write down why (for example, “0119 skipped by mistake, never sent”) and keep that note with your records. The best fix is to stop typing numbers by hand: let one place give out the numbers, so two people can never pick the same one.

In Openn InvoiceA draft does not use a number. The number is given only when you issue the invoice, so drafts you delete never leave gaps. Numbers follow PREFIX/YEAR/0001, for example OG/26-27/0046, using your country's financial year, and start again at 0001 each new year. Quotations (QT) and credit notes (CN) each have their own series. You set all three prefixes, up to four letters, in Settings. A cancelled invoice keeps its number and shows as Cancelled.

Moving from a spreadsheet? Start the new system at the next number after your last invoice, so the sequence carries on. Our guide to switching from Excel invoices covers the rest of the move.

The short version

Every invoice number is unique, goes up in order, and is never reused.
Use a prefix, the year and a zero-padded count, like OG/26-27/0046. Keep it short: India caps it at 16 characters.
Starting at 0001 each financial year is allowed in many countries when the year is in the number. Check yours.
Quotations and credit notes get their own series, so they never leave gaps in your invoices.
Never delete an issued invoice. Cancel it, keep its number, and issue a new one or a credit note.
Let one system give out the numbers, so nobody has to type them by hand.