Including an invoice number is a legal requirement for your sales invoices, whether you are self-employed, have a Limited Company and/or VAT registered or not.
Invoice numbering is needed because if HMRC ever investigates your business, they will review your invoices in numerical order.
This is a check to confirm that you have included all invoices in your records and give them some assurance that you keep your accounting records in good order.
That means it is not important what number you start with, but that you run a consistent system for processing your sales invoices.
Should I Start at Invoice Number 1?
Yes, you could simply start at sales invoice number 1 and go sequentially thereafter.
Although some businesses opt to start with something further along. That way their customers don’t know they have only just started trading.
Should I Include a Client Reference?
Some businesses opt to include a client reference as part of their numbering so they can identify invoices relating to a client or project.
For example, sales invoicing for a project with ABC Limited could begin ABC001, then ABC002.
This would allow you to check that you have invoiced correctly and in full for this project with ABC Limited.
Should I Include the Year?
Sometimes businesses use the year as the anchor reference for each invoice they raise.
So in 2019, a business may begin their invoice with 2019-01, 2019-02, 2019-03 etc.
Then in the new year begin using 2020-01, 2020-02 and so on.
Whichever method of sales invoice numbering you choose to adopt always ensure you are consistent with the referencing.
Updated 21 April 2019