Sequential invoice numbers in Germany explained

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  1. Introduction
  2. What is a sequential invoice number?
  3. What are the legal obligations for invoice numberings?
    1. Additional billing requirements
  4. What are the advantages of sequential invoice numbers?
  5. How can you hide invoice counts with sequential numbers?
  6. What are some examples of sequential invoice numbers?

Sequential invoice numbers play a key role in accounting and tax documentation in Germany – they ensure clarity and transparency in business transactions. Companies in Germany must use a systematic numbering system to meet legal requirements. In this article, you will learn what a sequential invoice number is, the legal obligations involved, and how this numbering system won’t disclose the total number of invoices you issue each year.

What’s in this article?

  • What is a sequential invoice number?
  • What are the legal obligations for invoice numbering?
  • What are the advantages of sequential invoice numbers?
  • How can you hide invoice counts with sequential numbers?
  • What are some examples of sequential invoice numbers?

What is a sequential invoice number?

Sequential invoice numbers are unique identification values that every invoice requires. They serve to structure transaction records and ensure traceability for tax authorities.

The invoice number can be a combination of digits, letters, and special characters. You could use these elements to integrate additional information into the figure, such as the year of issue, customer number, or department identifier.

Section 14, Paragraph 4 of the German VAT Act(UStG) regulates the obligation to assign sequential invoice numbers. As stated by this law, each statement must contain a unique and successive identifier.
This serves several purposes:

  • Uniqueness: You can only assign each value once and arrange them logically, leaving no room for gaps or manipulation. You cannot duplicate the same invoice number, as tax auditors could consider this an accounting error.
  • Comprehensibility: The system must be comprehensible to third parties (e.g., tax auditors). A random or arbitrary assignment that is not understandable contradicts the specifications.
  • Continuity: The numbering must not have unexplained gaps, which could indicate undocumented or altered processes.

Additional billing requirements

The legal requirement to provide invoices with a sequential number is just one of several conditions for proper invoicing under German value-added tax (VAT) rules. Per Section 14 of the UStG, they must contain specific mandatory details to meet legal standards. This includes:

  • Name and full address of the issuing company and customer
  • Date of issue of the invoice
  • Date of delivery or service provided
  • Tax number of the company or its VAT identification number
  • A one-time sequential invoice number
  • Description of the products or services delivered, including quantity and type
  • Gross and net amount
  • The applicable tax rate and the associated tax amount or an indication of a tax exemption

These requirements ensure transparency and traceability of invoicing and form the basis for the correct tax treatment.

Stripe Invoicing automatically generates sequential invoice numbers according to the legal requirements. This allows you to create invoices quickly without worrying about assigning a numeric sequence. With Invoicing, you can send bills to customers online and also simplify your business processes.

What are the advantages of sequential invoice numbers?

The systematic use of sequential invoice numbers offers companies multiple benefits. The key ones are:

  • Comprehensibility and transparency: A seamless system ensures each invoice has a unique identifier. This facilitates business transactions’ traceability internally and for external audit bodies such as tax authorities.
  • Efficient bookkeeping and archiving: Ordered labels help to organise invoices in a segmented way, making them easier to find in the accounting documents. This saves time when managing and preparing financial statements or tax returns.
  • Protection against manipulation and fraud: A fixed system of sequential invoice numbering makes it harder to manipulate or deliberately omit statements. This increases the integrity of bookkeeping and protects the company from legal consequences related to tax fraud or incorrect records.
  • Simplification of cooperation with external auditors: For tax or external audits, structured invoice numbering enables auditors to swiftly identify discrepancies or evaluate the completeness of accounting. This can significantly reduce the duration and complexity of such reviews.
  • Avoiding confusion among business partners: Consistent and logical indexing helps a company’s partners to assign invoices. This can reduce queries and speed up payment processing.
  • Company-specific flexibility: Since companies can adapt their numbering structure to specific needs, they can incorporate details like year, customer, or project identifiers into the invoice number. This approach increases efficiency and clarity in administration.

How can you hide invoice counts with sequential numbers?

Companies that do not want external parties (e.g., customers or business associates) to see how many invoices have been issued can conceal this legally. Although invoice numbers in Germany must be consecutive, the numbering design offers the following flexibility:

  • Using a complex numbering system: You can disguise the order by including other information in the invoice. For example, INV-2024-XYZ-1005 – here, “XYZ” can be a customer code, and “1005” can be a consecutive figure that does not start at 1. Another example is PROJ-Q2-2024-0123 – here, the prefix indicates the project or quarter, hiding the order within the invoicing.
  • Separate number ranges for different departments or projects: A company can segment individual ranges for various business areas or customers (e.g., Department A: A-2024-001, A-2024-002; Department B: B-2024-001, B-2024-002). Since each department in the example uses its own sequence, the total number of invoices issued becomes unclear to outsiders.
  • Start values outside the zero range: The numbering does not need to begin at “1.” Companies can work with higher starting points to suggest that they have already issued many invoices. For instance, starting at 1001 means the first are 1001, 1002, 1003. This can be helpful for newer businesses that do not want to appear less active.
  • Pseudo-consecutive numbers through regular jumps: A company can introduce larger, uniform jumps in the indexing, which still maintain a transparent system (e.g., 2024-010, 2024-020, 2024-030). This disguises the exact number of invoices issued and remains comprehensible.
  • Numbers related to customers or projects: When companies issue statements to a specific customer or for a certain project, they can build individual codes (e.g., CUSTOMER01-2024-001, CUSTOMER02-2024-001). Since each customer series starts with “001,” the total number of invoices issued is not directly visible.
  • Incorporation of random features: By embedding additional, non-consecutive features such as letters or years, you can reduce the visibility of the actual order (e.g., R-2024-AX023, R-2024-BZ024, R-2024-CY025). In the example, “AX,” “BZ,” and “CY” can be arbitrary or topic-specific codes.

  • Division into internal and external invoice numbers: Some companies maintain a separate external code and the consecutive internal invoice number sent to customers. The external code does not necessarily have to reflect the internal order, as long as the internal accounting remains complete.

What are some examples of sequential invoice numbers?

You can design the invoice numbering flexibly as long as it meets the legal requirements. Common approaches include:

  • Pure number sequence: A straightforward system, e.g., 1, 2, 3, is especially suitable for small businesses.
  • Numbers with year: For instance, 2024-001 and 2024-002, where the year of issuance is part of the figure.
  • Combination of letters and numbers: For example, INV-2024-0056, where “INV“ signifies invoice and “2024” means the year of issue.
  • Project-related numbering: For companies working on multiple projects, an invoice number can look like PROJ-123-01, where “PROJ-123” is the project and “01” is the sequence for that task.

The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practise in your jurisdiction for advice on your particular situation.

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