Invoice Number
What is it
A unique alphanumeric code assigned to a specific invoice. It distinguishes the document from all others issued by the sender. It acts as the primary key in accounting systems. It prevents duplication and confusion in financial records.
When is it required
It is mandatory for every invoice. Tax authorities and accounting standards require sequential and unique numbering. Without it, the document is not a valid invoice. Audits fail without this sequence.
Common pitfalls
- Using the same number for multiple documents. This causes rejection by accounting software.
- Creating long or complex codes that are hard to type. This increases the risk of data entry errors.
- Failing to maintain a continuous sequence. Gaps in numbering trigger suspicion during tax audits.
Common mistakes when filling the field
- Resetting the count to 1 at the start of a year without a prefix. This creates duplicate numbers from previous years.
- Including special characters that payment systems reject. Slashes and symbols often break banking imports.
- Forgetting to update the number from a previous template. Sending a new invoice with an old number confuses the record.
Sequencing rules
Most tax authorities strictly regulate numbering to prevent tax evasion. The sequence must be continuous and gapless.
Accepted sequences
- Sequential integers: 001, 002, 003. This is universally accepted and the simplest to manage.
- Chronological prefixes: 2024-001, 2024-002. This resets annually and helps organize records by period.
- Series based: INV-A-001, INV-B-001. This works for businesses with multiple branches or product lines.
Unacceptable sequences
- Random or non-sequential numbers: 5, 12, 99. This triggers immediate audits as it implies hidden invoices.
- Alphanumeric only without logical order: A, AA, B. This makes it impossible to verify completeness.
- Gap-filled sequences: 100, 105, 110. This signals potential voided invoices which must be accounted for carefully.
Regional laws comparison
While "unique and sequential" is the global standard, the strictness varies significantly by region.
| Region | Strictness | Key Requirement | Specifics |
|---|---|---|---|
| USA | Low | No federal mandate | Sequential numbering is highly recommended for IRS audits but not legally defined. |
| EU (General) | High | Sequential & Unique | Multiple series (e.g., per branch) are allowed as long as each is sequential. |
| Germany | Very High | Gapless Sequence | Missing numbers (gaps) are viewed as potential signs of fraud and must be justified to auditors. |
| UK | High | Sequential & Unique | Gaps or duplicates can invalidate an invoice for VAT recovery purposes. |
| India (GST) | High | Serial & Unique | Must reset every financial year. Maximum 16 characters. Alphanumeric allowed. |
| Portugal | Critical | Certified Series | You must register your invoice series with the government to get a validation code (ATCUD). |
| Italy | Critical | SdI Validation | Invoices must be transmitted via the SdI system. Numbers must be unique and sequential to pass validation. |
| Mexico | Critical | UUID (Folio) | The tax authority (SAT) assigns a unique UUID to every invoice. You cannot generate this yourself. |
| Saudi Arabia | High | ZATCA E-invoicing | Part of a phased rollout. Sequencing must be continuous and part of the XML data submitted to ZATCA. |
| Australia | Medium | Unique & Sequential | Strictly enforced to prevent double claiming of GST credits. Gaps are frowned upon but not illegal if explained. |
Why is it there
It tracks payments and references specific transactions. Both sender and receiver use it to match funds to obligations. It allows efficient retrieval of past records.