What is an Invoice?

An invoice is a document submitted to a customer, identifying a transaction for which the customer owes payment to the issuer. It provides documentation and a reminder to the customer that it owes the seller the amount stated on the invoice. It may be issued on paper or in an electronic format.

The Problem With a Missing Invoice Number

The main identifier used to track any supplier invoice is the invoice number. This is used, because a core feature of any accounting software package is to automatically flag invoices for which information has already been recorded. This is an essential control point, to keep a business from accidentally paying the same invoice more than once.

The issuance of invoices without invoice numbers is particularly common in the utilities industries, which report on usage over a certain period of time, and therefore identify their invoices with a date range. A similar problem arises with manually-submitted employee expense reports, which do not contain an invoice number.

How to Record an Invoice That Has No Invoice Number

To resolve the issue, adopt a standard procedure for creating invoice numbers for any invoices that do not already have an invoice number. By doing so, anyone entering an invoice should derive exactly the same invoice number from the information on the invoice, thereby mitigating the risk that such an invoice will be entered into the computer system more than once (the computer should reject any invoice number that already resides in the system). Examples of an invoice numbering convention are:

Use the invoice date as the invoice number
Use the packing slip number as the invoice number
Never enter the leading zeros in an invoice number
Never enter any dashes or other punctuation in an invoice number

When you enter this derived invoice number into the accounting system, it can be helpful to include a note regarding how the invoice number was derived, as well as a scanned copy of the invoice. This makes it easier for someone else to understand how you came up with the invoice number.