diff --git a/app/models/invoice.rb b/app/models/invoice.rb
index 33a128a3e0..b86d362b5b 100644
--- a/app/models/invoice.rb
+++ b/app/models/invoice.rb
@@ -4,6 +4,7 @@ class Invoice < ApplicationRecord
   belongs_to :order, class_name: 'Spree::Order'
   serialize :data, Hash
   before_validation :serialize_order
+  after_create :cancel_previous_invoices
 
   def presenter
     @presenter ||= Invoice::DataPresenter.new(self)
@@ -14,4 +15,8 @@ class Invoice < ApplicationRecord
 
     self.data = Invoice::OrderSerializer.new(order).serializable_hash
   end
+
+  def cancel_previous_invoices
+    order.invoices.where.not(id:).update_all(cancelled: true)
+  end
 end
diff --git a/app/views/spree/admin/invoices/_invoices_table.html.haml b/app/views/spree/admin/invoices/_invoices_table.html.haml
index 1718521112..7d312a7139 100644
--- a/app/views/spree/admin/invoices/_invoices_table.html.haml
+++ b/app/views/spree/admin/invoices/_invoices_table.html.haml
@@ -18,7 +18,7 @@
         %td.align-center.label
           = invoice.presenter.total
         %td.align-center.label
-          = t(invoice.status)
+          = t(invoice.cancelled ? :cancelled : :active)
         %td.align-center.label
           =link_to(t(:download),print_admin_order_path(@order,invoice_id: invoice.id),target: "_blank")
 
diff --git a/config/locales/en.yml b/config/locales/en.yml
index 896cb91aa0..8ca1b63541 100644
--- a/config/locales/en.yml
+++ b/config/locales/en.yml
@@ -394,6 +394,11 @@ en:
   confirm_resend_order_confirmation: "Are you sure you want to resend the order confirmation email?"
   must_have_valid_business_number: "%{enterprise_name} must have a valid ABN before invoices can be sent."
   invoice: "Invoice"
+  invoices: "Invoices"
+  file: "File"
+  active: "Active"
+  download: "Download"
+  cancelled: "Cancelled"
   more: "More"
   say_no: "No"
   say_yes: "Yes"
diff --git a/db/migrate/20230629015322_set_default_invoice_status.rb b/db/migrate/20230629015322_set_default_invoice_status.rb
new file mode 100644
index 0000000000..4dd10d3eb4
--- /dev/null
+++ b/db/migrate/20230629015322_set_default_invoice_status.rb
@@ -0,0 +1,14 @@
+# frozen_string_literal: true
+
+class SetDefaultInvoiceStatus < ActiveRecord::Migration[7.0]
+  def change
+    add_column :invoices, :cancelled, :boolean, default: false, null: false
+    ActiveRecord::Base.connection.execute(<<-SQL.squish
+      UPDATE invoices
+      SET cancelled = true
+      WHERE status = 'inactive'
+    SQL
+                                         )
+    remove_column :invoices, :status, :string
+  end
+end
diff --git a/db/schema.rb b/db/schema.rb
index 533ad446c6..90a51e7208 100644
--- a/db/schema.rb
+++ b/db/schema.rb
@@ -306,12 +306,12 @@ ActiveRecord::Schema[7.0].define(version: 2023_07_06_033212) do
 
   create_table "invoices", force: :cascade do |t|
     t.bigint "order_id"
-    t.string "status"
     t.integer "number"
     t.jsonb "data"
     t.date "date", default: -> { "CURRENT_TIMESTAMP" }
     t.datetime "created_at", null: false
     t.datetime "updated_at", null: false
+    t.boolean "cancelled", default: false, null: false
     t.index ["order_id"], name: "index_invoices_on_order_id"
   end
 
diff --git a/spec/models/invoice_spec.rb b/spec/models/invoice_spec.rb
index 6bd6257c1e..81dad4005e 100644
--- a/spec/models/invoice_spec.rb
+++ b/spec/models/invoice_spec.rb
@@ -3,18 +3,18 @@
 require 'spec_helper'
 
 RSpec.describe Invoice, type: :model do
+  let(:distributor) { create(:distributor_enterprise) }
+  let(:order) { create(:order, :with_line_item, :completed, distributor:) }
   describe 'presenter' do
     it 'should return an instance of Invoice::DataPresenter' do
-      invoice = create(:invoice)
+      invoice = create(:invoice, order:)
       expect(invoice.presenter).to be_a(Invoice::DataPresenter)
     end
   end
 
   describe 'serialize_order' do
-    let!(:distributor) { create(:distributor_enterprise) }
-    let!(:order) { create(:order, :with_line_item, :completed, distributor: distributor) }
     it 'serializes the order' do
-      invoice = create(:invoice, order: order)
+      invoice = create(:invoice, order:)
       expect(invoice.data).to eq(Invoice::OrderSerializer.new(order).serializable_hash)
     end
   end
diff --git a/spec/system/admin/orders/invoices_spec.rb b/spec/system/admin/orders/invoices_spec.rb
new file mode 100644
index 0000000000..cdd3a8de6e
--- /dev/null
+++ b/spec/system/admin/orders/invoices_spec.rb
@@ -0,0 +1,104 @@
+# frozen_string_literal: true
+
+require 'system_helper'
+
+describe '
+ As an administrator
+ I want to create an invoice for an order
+' do
+  include WebHelper
+  include AuthenticationHelper
+
+  let(:user) { create(:user) }
+  let(:product) { create(:simple_product) }
+  let(:distributor) { create(:distributor_enterprise, owner: user, charges_sales_tax: true) }
+  let(:order_cycle) do
+    create(:simple_order_cycle, name: 'One', distributors: [distributor],
+                                variants: [product.variants.first])
+  end
+
+  let(:order) do
+    create(:order_with_totals_and_distribution,
+           distributor:, user:,
+           order_cycle:, state: 'complete',
+           payment_state: 'balance_due')
+  end
+  let(:customer) { order.customer }
+
+  before do
+    Flipper.enable(:invoices)
+    order.finalize!
+    login_as_admin
+    visit spree.edit_admin_order_path(order)
+  end
+
+  context 'when the order has no invoices' do
+    it 'creates an invoice for the order' do
+      click_link 'Invoices'
+
+      expect {
+        click_link 'New Invoice'
+        expect(page).to have_no_link "New Invoice"
+      }.to change { order.invoices.count }.by(1)
+
+      invoice = order.invoices.first
+      expect(invoice.cancelled).to eq false
+      expect(invoice.number).to eq 1
+    end
+  end
+
+  context 'when the order has an invoice' do
+    let!(:latest_invoice){ create(:invoice, order:, number: 1, cancelled: false) }
+
+    context 'order not updated since latest invoice' do
+      it 'should not render new invoice button' do
+        click_link 'Invoices'
+        expect(page).to_not have_link 'New Invoice'
+      end
+    end
+
+    # For reference check:
+    # https://docs.google.com/spreadsheets/d/1hOM6UL4mWeRCFLcDQ3fTkbhbUQ2WvIUCCA1IerDBtUA/edit#gid=0
+    context 'order updated since latest invoice' do
+      context 'changes require regenerating' do
+        let(:new_note){ 'new note' }
+        before do
+          order.update!(note: new_note)
+        end
+
+        it 'updates the lastest invoice for the order' do
+          click_link 'Invoices'
+          expect {
+            click_link 'New Invoice'
+            expect(page).to have_no_link "New Invoice"
+          }.to change { order.reload.invoices.count }.by(0)
+            .and change { latest_invoice.reload.presenter.note }.from("").to(new_note)
+
+          expect(latest_invoice.reload.cancelled).to eq false
+        end
+      end
+
+      context 'changes require generating a new invoice' do
+        before do
+          order.line_items.first.update!(quantity: 2)
+        end
+
+        it 'creates a new invoice for the order' do
+          click_link 'Invoices'
+          expect {
+            click_link 'New Invoice'
+            expect(page).to have_no_link "New Invoice"
+          }.to change { order.reload.invoices.count }.by(1)
+
+          expect(latest_invoice.reload.cancelled).to eq true
+          expect(latest_invoice.presenter.sorted_line_items.first.quantity).to eq 1
+
+          new_invoice = order.invoices.last
+          expect(new_invoice.cancelled).to eq false
+          expect(new_invoice.number).to eq 2
+          expect(new_invoice.presenter.sorted_line_items.first.quantity).to eq 2
+        end
+      end
+    end
+  end
+end