Including an invoice number is a legal requirement for your sales invoices, whether you are a Limited Company and/or VAT registered or not.
Invoice numbering a necessary requirement because if HMRC ever investigate your business they can review your invoices in numerical order as part of their checks 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.
Therefore it is not important what number you start with, but that you run a consistent system for processing your sales invoices.
Every business and person has different method and different reasons for adopting their own system.
Should I Start at number 1?
Yes, you could simply start at sales invoice number 1 and sequentially thereafter. Although some businesses opt to start with something further along so their customers don’t know they have only just started trading.
Including 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.
Including the Year
Sometimes businesses use the year as the anchor reference for each invoice they raise. So in 2016 a business may begin their invoice with 2016-01, 2016-02, 2016-03 etc. Then in the new year begin using 2017-01, 2017-02 and so on.
Whichever method of sales invoice numbering you choose to adopt always ensure you are consistent with the referencing and choose the method that will suit your business the best.