Paragraph numbering is necessary in a legal document where each provision needs to have a unique identifier. This helps parties using a contract or regulation to reference a requirement when considering how it applies to their situation.
Because legal documents have an elevated status as ‘authoritative’ texts, other documents in the professional world have tended to echo legal numbering systems. The ASG recommends you resist the urge to number at the paragraph level unless you are genuinely writing a legal document. You will burden your reader with cognitive load that makes it harder for them to absorb your content.
In particular, do not paragraph number long documents such as reports or business cases. But even shorter documents such as briefs, submissions, policies and procedures will benefit most from numbering of the main sections and headings without paragraph numbering. Never number website text.
It is very easy to convince yourself that your document is ‘legally’ important or that paragraph numbering is needed for readers to cross-reference particular paragraphs. But if you mainly want your readers to work through the document from start to finish, paragraph numbering will hamper more than help them. Reserve it for documents where readers will mainly need to look up a specific provision without reading the whole.