Invoice numbering seems trivial until an auditor asks about a gap. Sequential, unique, traceable numbering is a legal requirement under GST and practical necessity for management.
GST Requirements
Under Rule 46: sequential order, unique per financial year, alphanumeric with hyphens/slashes only, maximum 16 characters. Non-compliance attracts audit scrutiny.
Recommended Format
PREFIX-YYMM-SERIAL: INV-2604-0001. Readable, sortable, and immediately shows when and in what sequence generated.
Separate Series by Document Type
Invoices (INV-), receipts (RCP-), credit notes (CN-), debit notes (DN-), proforma (PI-). Prevents confusion and satisfies auditors.
Multi-Branch Numbering
Prefix with branch code: DEL-INV-2604-0001 for Delhi. Each branch maintains its own sequential series.
Financial Year Reset
Reset serial numbers April 1st. Year prefix changes. Keeps numbers manageable and identifies the financial year instantly.
Handling Gaps
Never delete an invoice number. Cancel with reason and issue credit note. Gaps without explanation are audit red flags.
System-Enforced Sequencing
Software must enforce sequential numbering preventing manual overrides and duplicates. Nxiora handles this with database-level constraints.
Archival
GST law requires 7 years retention. Your digital system should retain all invoices indefinitely with search capability.