What is an invoice number?

No matter your chosen profession, every self-employed tradesperson will eventually need to invoice their clients for the work they’ve been asked to carry out. After all, if you don’t invoice your clients, your business isn’t going to get paid.

Naturally, this means part of your everyday business admin is going to include creating these invoices, with a new one being needed for each individual job or project you’re involved in – which also means you’ll need to make a unique invoice number to go with them.

A vital part of every invoice, setting up and generating these unique invoice numbers is very important; not just for invoice tracking purposes, but for a variety of other tax and business-related reasons.

Take a look at our guide below to learn more about what invoice numbers are, how to create them, and the benefits that can come with setting up a reliable invoice number system for your business.

What is an invoice number?

An invoice number refers to a unique alphanumeric identification code that should be included on every invoice you send out. A point of reference for you and your customers, it allows for easy invoice tracking, letting you see which customers have and haven’t paid you for your work, while making invoice organisation much more straightforward.

Much like every invoice you create, every invoice number you generate and use needs to be different from the last, and that means coming up with an invoice number generation system that’s quick to use and easy to understand for you and your customers.

How to create an invoice numbering system

Despite being applied to the majority of invoices issued in the UK, there is no universally agreed-upon invoice number system that you’ll be expected to use for your business. Instead, you’ll need to come up with one for yourself.

However, just because there’s no set system in place for you to copy doesn’t mean there aren’t common layouts you can draw inspiration from. And most businesses tend to go with one of the following invoice number methods to keep things simple:

• Sequential numbering – Sequential invoice numbers start from a base number (usually 001 or 1001) and then increase sequentially for each invoice sent out – i.e., 002 or 1002, 003 or 1003, etc.
• Chronological invoicing – Chronological invoice numbers are a little more complex than sequential number systems and typically include a combination of dates and numbers to track documents. For example, you might decide to issue invoice numbers numerically, based on the current tax year – i.e., 2025-001. Or you may want to include the exact date an invoice was issued – i.e., 01-02-2025-001.
• By client – If you’re a trader who works with multiple clients simultaneously (as most traders tend to do), you may find it easier to organise your invoices on a per-client basis. This could involve assigning a unique letter identification for each client and then numbering their specific invoices in the order they’re issued. For example, you might identify Which? Trusted Traders as WTT, meaning your first, second, and third invoice numbers might look something along the lines of WTT-001, WTT-002, and WTT-003.
• Per project – Similar to generating your invoice numbers on a per-client basis, tracking your invoices by project usually involves giving each project a letter code, followed again by sequential numbering – i.e., P1-001, P1-002, P1-003, etc.

Of course, all of the above examples we’ve provided are just that – examples – and you should take the time to create an invoice number generation system that works for you personally, rather than directly copying a system that someone else uses.

Why are invoice numbers important?

Outside the obvious need for streamlining invoice and payment tracking, numbering your invoices comes with numerous benefits to your business, such as:

• Providing a record and evidence of payment for you and your customers.
• Streamlined tracking for multiple ongoing projects and work taking place simultaneously.
• Quick answering for customer billing questions.
• Smoother accounting processes.
• Easier monitoring of tab payments and goods discounts.
• The ability to act as legal documentation in the event of financial disagreements and customers refusing to pay.
• Minimising the risk of invoice fraud and business scams by providing a unique reference for you and your customers alone.
• Making your business appear more professional and trustworthy in the eyes of clients.
• Helping your business to budget more effectively for future months by properly accounting for late or missed customer payments in your budget.

How to assign an invoice number to clients

In order to assign an invoice number to a particular client, you’ll first need to create your invoice number generation system. From here, it really is as simple as applying the number generated to the right invoice, then updating the invoice number for each statement going forward.

As to where your invoice number should physically sit on your invoice, this is again up to you. However, we’d suggest placing it clearly near the top of your invoice so customers can easily find it – feel free to take a look at our invoice creation guide for precise tips on how to do this.

Top tips for assigning invoice numbers

As we’ve already mentioned, there’s no set structure for generating and assigning invoice numbers. However, there are best practices that we’d suggest following.

First and foremost, the system you use to generate your invoice numbers should be clear, easy to follow, and consistent in layout to avoid confusing both yourself and your customers – but, that said, you don’t want to make them too simple.

While often used, overly simple invoice numbers, such as basic sequential numbering, run the very real risk of muddling up your invoicing process, especially if you’re looking to grow your business to attract more clients.

Instead, at a minimum, we’d recommend using alphanumeric codes for each client, followed by sequential numbering (and the date, too, if you want things to be very clear). This will allow you to clearly separate invoice numbers by clients and track their invoices separately from each other.

Also, make sure you keep both a digital and physical record of each invoice you send. This will give you a backup of every copy, ensuring you have another version to hand should either one be lost or destroyed.

Find more clients as a Trusted Trader

As you can see, understanding and assigning invoice numbers is quite a simple process once you have the basics down. Once your system is in place, all you need to do is make sure that you update your invoice numbers for each invoice you issue and any new customers you work with.

And speaking of new customers, if you’re looking to expand your client base to grow your business, then you might want to consider becoming a Which? Trusted Trader.

It provides you with the perfect opportunity to get in front of new clients, and all of our Trusted Traders get access to their own business page to display examples of their work and client reviews.

Get in touch today to find out more, and don’t forget to visit our advice hub for more guides like this one, such as our top tips for becoming a self-employed trader.

Invoice number FAQs

Do you still have some questions about invoice numbers? Take a look below to see if we’ve answered them in our FAQs:

Is an invoice number a legal requirement for businesses?

Although they’re considered an essential part of all invoices, the inclusion of an invoice number is only a legal requirement if your business is VAT-registered. However, creating and using invoice numbering is a sensible decision for any business, if for no other reason than it will make you appear more credible and professional to customers.

How often do I need to assign an invoice number?

Every single invoice you produce needs to have a unique invoice number assigned to it. If you don’t do this, you’ll run the risk of doubling up invoice numbers by accident, and it will be much harder to track your invoices overall.

Is a PO number the same as an invoice number?

No, a PO, or purchase order, is a number that refers to the purchase order of that particular invoice, which is used for order tracking and price confirmation.

Should I assign an invoice number to a pro forma invoice?

No, there is no need to create a unique invoice number for a pro forma invoice, as doing so runs the risk of disrupting your primary invoice tracking system and causing unnecessary confusion.