How do Custom Transaction Numbers work in QuickBooks Online?

The “Custom Transaction Numbers” setting in QuickBooks Online allows you to set your own invoice numbering format. Turning custom transaction numbers on adds an Invoice Number field to the invoice and you can use any number or letter format that you want. To adjust the custom transaction numbers setting in QuickBooks Online, do the following:

Go to Settings ⚙ and select Account and settings.
Select Sales.
In Sales form content, select Edit ✎.
Turn Custom transaction numbers on or off.
Select Save, then select Done.

The sales form content section will look as follows (Figure 1):

Figure 1 - Custom Transaction Numbers Setting in QuickBooks Online

When custom transaction numbers are off, QuickBooks Online is in control of invoice numbering. It doesn’t matter what invoice number exists on the draft invoice that gets published from Ruddr because QuickBooks Online will override it with the number it determines is next. If some invoices get created manually in QuickBooks Online, it is usually a good idea to keep custom transaction numbers off in QuickBooks so that you don’t attempt to create duplicate invoice numbers. If custom transaction numbers are on, QuickBooks Online will use whatever invoice number Ruddr provides. But, that invoice number must not already exist in QuickBooks Online. If that invoice number already exists, Ruddr will show a “Duplicate invoice number” error message (Figure 2).

Figure 2 - Duplicate Invoice Number Error Message

When custom transaction numbers are off and an invoice is deleted, QuickBooks Online will not reuse the deleted invoice number. So, if invoice #1005 is deleted, QuickBooks Online will still use invoice #1006 when the next invoice is published from Ruddr. This will leave a gap in the sequence of invoice numbers. To resolve this, you must turn custom transaction numbers on, set the draft invoice to #1005, publish the draft from Ruddr to QuickBooks Online, and then turn custom transaction numbers back off. At that point, the gap at #1005 has been resolved and QuickBooks Online will use #1006 for the next invoice that is published from Ruddr.