Invoice numbering is one of those tedious details that does not matter, until the day it really does. An auditor asks for invoice 0089 and you cannot find it. A client mentions invoice 12 but you sent them invoice 12 last year as well. Worth getting right once and not thinking about again.
Why sequential numbering matters
Tax authorities in most jurisdictions (the IRS, HMRC, CRA, ATO, the EU VAT directive) assume your invoices are sequentially numbered with no gaps. The reason is simple: if you can skip a number, you can hide an invoice. Sequential numbering is one of the easiest ways to demonstrate that you are reporting everything.
In the UK, sequential numbering is explicitly required by HMRC for VAT-registered businesses. In Germany it is required under §14 UStG. In France, your invoicing software is supposed to be certified to comply with the anti-fraud rules introduced in 2018 and tightened since. Even in jurisdictions where it is not legally mandated, it is strongly expected.
So the first rule is short. Never skip a number. Never reuse a number. Never delete a number without explicitly voiding it.
Four numbering formats people actually use
1. Pure sequential
INV-0001, INV-0002, INV-0003and so on.
The simplest format. Works fine forever. A four-digit pad takes you to invoice 9,999, which is enough for most freelancers' entire careers. When you cross it, the format keeps working with five digits (INV-10000).
This is what I use and what most freelancers should default to.
2. Year-prefixed
2026-001, 2026-002 and so on, then resetting to 2027-001 at the start of the next year.
Common with established businesses and the accountants who audit them. Easy to glance at an invoice number and know which financial year it belongs to. Resetting the sequence annually is legally accepted everywhere I know of. The no-skipping rule applies inside each year's sequence.
The downside is the discipline of remembering to reset on 1 January (or the start of your fiscal year). If you send fewer than fifty invoices a year, the format is overkill; the year is already on the invoice date.
3. Client-prefixed
ACME-001, ACME-002, with a separate sequence per client.
Useful if you have a small number of recurring clients. Each client's own sequence makes their AP team's job easier; they can see at a glance which of your invoices they have already paid.
Do not use this if you have many one-off clients. The administrative overhead is not worth it and the no-gap-per-sequence rule starts to bite.
4. Date-encoded
20260513-001, where the leading block is the invoice date in YYYYMMDD.
Mostly seen in higher-volume operations or specific industries (legal practices, healthcare clinics, large print shops). Communicates everything at a glance. Hard to type and hard to say on the phone. Probably overkill for most freelancers.
Resetting annually: yes or no?
Year-prefixed numbers reset every 1 January. Pure sequential numbers never reset. Both are valid.
If you are a freelancer sending fewer than a hundred invoices a year, pure sequential is simpler. The invoice date is right there if you need to know when something was issued.
If you are a small business sending two hundred or more a year, year-prefixed makes year-end accounting cleaner. "These are the 2026 invoices" becomes unambiguous.
When you have to void an invoice
Sometimes an invoice goes out wrong. Wrong client, wrong amount, wrong date. You do not just delete it; you void it. Three accepted ways to handle this:
1. Issue a credit note. A negative-amount invoice that cancels out the bad one. Both stay in the sequence and the math nets to zero. This is the cleanest method and what most accountants prefer.
2. Mark it voided. Re-issue the original invoice with the same number, but with VOIDED stamped clearly across it. The number stays in the sequence. Issue a fresh invoice with the next number for the corrected version.
3. Reissue with a reference. If you caught the mistake before the client ever saw it, issue a new invoice with the next number and reference the original: "Replaces INV-0042, issued in error."
What you do not do is delete the bad invoice and reuse its number. That looks like fraud in an audit, even when it was not.
Multiple businesses, multiple sequences
If you operate two distinct businesses (say, a freelance consulting practice and a side-project ecommerce store) they should have separate invoice sequences. The same applies if you incorporate later and end up with a personal sole-prop history and a company-billed history side by side.
Prefix them differently so they are obviously distinguishable. SD-001 for SaadDev (the freelance practice), BO-001 for BookOf (the store). Each prefix gets its own unbroken sequence.
What this tool does
The generator auto-increments invoice numbers based on the last one you saved. Click New and the number bumps up by one. You can edit it manually if you need to skip ahead or use a custom prefix.
The number history is stored on your device only, so switching devices starts a fresh sequence. If that matters to you, export a backup from the History drawer and import it on the new machine.