2026-10-21・Invoicing / Small business / Excel

How to number your invoices (a simple system, plus a formula that does it for you)

If you started invoicing without deciding on a numbering system, you probably have invoices called "1", "Invoice-Oct", "ACME 2" and so on. That's fine until you need to find one, or match a payment to the right invoice.

In this article:

• a simple numbering system that works for most small businesses
• whether invoice numbers are required
• a formula that numbers invoices automatically in Excel or Google Sheets
• what to do when an invoice is cancelled or corrected

The simple system: year + running number

2026-001
2026-002
2026-003

• The year tells you when: you can see at a glance which tax year or financial year an invoice belongs to, which helps with filing and record keeping.
• A running number shows gaps: if you see 014 and 016 but no 015, you know to check what happened to 015.
• Fixed width keeps things in order: writing 001 instead of 1 means invoices sort as 001, 002 … 010, not 1, 10, 2.

If you send more than a few hundred invoices a year, use four digits (2026-0001).

Other common variations: year and month (202610-01) if you invoice monthly, or a client or department prefix (ACME-2026-001). Whatever you choose, pick one format and stick to it.

Are invoice numbers required?

It depends on where you are. In the UK, GOV.UK lists "a unique identification number" first among the things an invoice must include, along with your details, the customer's details, a description, the supply date, the invoice date, the amounts, VAT if applicable and the total. If you and your customer are VAT registered, you need a VAT invoice, which has more requirements.

Other countries have their own rules, so check your tax authority's guidance. Even where a number isn't strictly required, it makes payments much easier to match.

A formula that numbers invoices for you

Put the invoice date in column A and the invoice number in column B. Rows should be in date order.

In B2, enter this formula and copy it down:

=YEAR(A2)&"-"&TEXT(COUNTIFS($A$2:A2,">="&DATE(YEAR(A2),1,1),$A$2:A2,"<="&DATE(YEAR(A2),12,31)),"000")

• YEAR(A2) is the year of the invoice date
• COUNTIFS(...) counts how many invoices from the same year appear from the top down to this row, so it gives "the nth invoice of the year"
• TEXT(..., "000") pads it to three digits

The count restarts at 001 when the year changes. The same formula works in Excel and Google Sheets.

If your financial year doesn't start in January, you can use your own year label instead of YEAR(A2), but the simplest option is often to number by calendar year and let your accounting software handle the financial year.

Lock the numbers once sent

The formula recalculates if you sort the sheet or insert a row in the middle, so numbers can shift. Once an invoice has been sent, copy column B and paste it back as values so the number can't change. Never renumber an invoice a customer already has.

Cancelled and corrected invoices

• Cancelled before sending: don't reuse the number. Mark it "void" in your list and carry on with the next number. A gap is fine as long as you can explain it.
• Wrong amount after sending: rather than quietly changing the invoice under the same number, agree the fix with the customer and issue a credit note or a replacement invoice with a new number, and record that the original was cancelled. For VAT invoices, follow HMRC's guidance on credit and debit notes.

Summary

• Use year + running number (2026-001): easy to read, easy to sort, gaps are obvious
• In the UK, an invoice must have a unique identification number
• A COUNTIFS formula can number invoices automatically; paste as values once sent
• Don't reuse or renumber invoices; record voids and corrections

Source: GOV.UK: Invoicing and taking payment from customers, what invoices must include

General information, not tax advice. This article was drafted with the help of AI and checked against GOV.UK on 2026-10-21.