I run my own setups and I prefer control over data. Self-hosted accounting software gives that control, but it also adds maintenance. This guide tells you how I pick, install and run a dependable system for basic bookkeeping and financial tracking. I keep it practical, with steps you can follow and checks to prove it works.
Getting Started with Self-Hosted Accounting Software
Assessing Your Accounting Needs
Start by listing what you must track. For most self-employed people that means income, expenses, VAT where applicable, and simple profit-and-loss reporting. Count your active invoices and receipts. If you operate multiple income streams, note that now. That list decides how heavy the software needs to be.
Ask two concrete questions. First, how many transactions per month? If under 200, a lightweight app is fine. Second, do you need VAT MTD compatibility? If you do UK VAT reporting, pick software that can export compliant reports or has an MTD path.
Choosing the Right Software
I favour projects with recent commits, clear issue activity, and sensible documentation. Open-source matters to many, but active maintenance matters more. Examples that often work well for the self-employed include single-tenant apps that focus on invoicing, bookkeeping and basic reports. Avoid projects that haven’t had a release in two years.
Check the tech stack before committing. If the app is PHP plus MySQL and you already run a LAMP homelab, setup is faster. If it uses Docker, that can simplify upgrades. Pick software with a straightforward backup/export format, such as CSV or SQL dumps.
Installation and Setup
I use a short, repeatable process for installs. Follow these steps.
- Prepare a test host. Use a VM or a separate container. Do not install on your live system yet.
- Install the app per the project docs. If Docker compose is provided, use that. If not, follow the standard service steps: database, app, web server.
- Create a dedicated database user and limit its privileges to that database.
- Set HTTPS using a valid certificate. Let’s Encrypt is free and scriptable.
After installation, verify the service runs and the web UI responds. Check logs for errors. If the app exposes ports, lock them down to local network or proxy with authentication.
Basic Configuration Steps
On first run complete these items.
- Set your base currency and VAT rate. Enter any default tax codes you use.
- Create at least one sample invoice and one expense entry. Use a test client name and a test supplier name.
- Configure accounting periods and your fiscal year start. That avoids later date errors.
- Configure user accounts. Give yourself admin rights and a plain user account for day-to-day entry if you want separation.
Record your database credentials and config file locations in a secure password manager.
Testing Before Going Live
Test with sample data and then perform these checks.
- Export a full backup and restore it to a second test instance.
- Generate a profit-and-loss report and a trial balance.
- Run a VAT report for a sample quarter.
If any of these fail, fix the issue before importing real data. Only migrate live books after you can restore a backup and produce the reports you need.
Managing Your Finances Effectively
Tracking Income and Expenses
Keep categories lean. I use no more than ten expense categories. Fewer categories reduce mistakes. Tag invoices with client or project codes so you can slice income later.
Adopt a daily or weekly routine. Enter receipts the same day you scan them. For bank transactions, set up a CSV import if available. Reconcile bank statements at least monthly. Reconciliation is the single habit that prevents surprises.
Generating Financial Reports
Decide which reports you will use regularly. I run three each month: profit and loss, balance sheet overview, and aged receivables. Use date presets where the app offers them. Export reports to CSV or PDF for HMRC or your accountant.
If you need a one-off calculation, export raw transactions and use a spreadsheet to pivot. That keeps your core system simple and lets you create bespoke views without changing the accounting data.
Automating Routine Tasks
Automation saves time but adds complexity. I automate invoice numbering, recurring invoices for regular clients, and bank CSV imports. Use automation only where you have repeatable patterns.
For software that supports webhooks, set up a webhook to push new invoice events to your backup script. For Docker setups, add a scheduled container restart and image pull once a week. That gives you small, safe automation without heavy scripting.
Data Security
Treat accounting data as sensitive. Run the app behind HTTPS. Use strong passwords and an MFA-capable authentication method where available. Limit database access to the application host.
Keep the app off the public internet unless you need remote access. If you must expose it, put it behind a VPN or a reverse proxy with IP allow lists and rate limits. Log access and check logs weekly for unexpected logins.
Regular Backups and Updates
Backups must be automated and verifiable. I keep three backup copies: local, offsite, and an encrypted copy in object storage. Schedule daily backups for transaction data and weekly full dumps.
Test restores monthly. A backup that restores is useful; a backup that only sits on a drive is not. Apply security patches within a few days of release for web and database components. For application upgrades, follow this process:
- Take a full backup.
- Apply the update on a staging instance.
- Run the same set of verification reports.
- If staging checks pass, roll the update to production in a maintenance window.
Final takeaways. Pick software that matches your transaction volume and VAT needs. Test thoroughly before migrating live books. Automate the boring parts, but keep backups simple and test restores. If you follow those steps, self-hosted accounting software will stay reliable and usable for a self-employed practice.
