Shadowing Practice: Bookkeeping in 6 Steps (for Beginners) - Learn English Speaking with Video

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Bookkeeping is an important part of running your business,

but to be honest, it's not something most business owners know much about or even want to do.

But now more than ever, bookkeeping is crucial to staying organized and having accurate data about your business.

My name is Kristen, and I'm a certified public accountant turned small business owner and entrepreneur.

I left my job at a big four accounting firm to start my own boutique firm

that serves small business owners like maybe yourself.

So today I'm going to teach you the bookkeeping basics.

This video is designed for business owners or anyone that is interested in becoming a bookkeeper.

What is bookkeeping?

Simply put, it is the process of keeping financial records for a business.

And this is so important because bookkeeping is required to file taxes, to get loans or funding,

and to stay compliant with local, state, and federal regulations.

And even more than that, it's crucial to have financial data about your business to make decisions for the future.

And surprisingly, the process is pretty simple.

So I'm going to break down the steps of bookkeeping.

So step one

One is to simply gather financial records or source documents.

And these documents include, most importantly,

bank statements and credit card statements that show a list of transactions during that financial period with an amount,

a date, and a description.

Some other documents that are really helpful are receipt, any record of cash transactions.

So if the business pulled out cash and that cash was used for different types of activities,

that's really important to have written down or logged somewhere.

Also, any invoices that the business issued to its customers or clients and any bills that were issued to the business.

Step two is to categorize transactions.

So now that you have all of the data you'll need,

you then need to sort through those transactions and make some decisions around what category they fall under.

So we have several normal categories in the bookkeeping world, and that's going to be revenue or sales and expenses,

assets, liability, and owner's equity.

And a lot of those terms you may have heard before, equity may be a new one,

but essentially it's a record of owner's distributions and contributions and what money is remaining in the business undistributed.

It's important to be able to basically list out all of the transactions from that bank statement,

from those source records, and decide on categories.

And this is where I will recommend using an accounting software.

And the two that I love the most are Xero Accounting Software and QuickBooks Online.

You definitely want something digital and cloud -based.

You don't want to have to worry about, you know, a physical device being stolen or lost and losing all of your records.

So get something cloud -based and those two softwares will definitely do the trick.

Step three is where a lot of newbie bookkeepers

or business owners who try to DIY their own bookkeeping mess up and that is reconciling your bank account.

So you've got all of the transactions in the accounting software

and categorized and now you have to take an additional step to ensure accuracy and completeness of your data.

In a nutshell, that step is you get the source documents, the bank statements or credit card statements,

and you match them to the balance in the accounting software.

And then when there are discrepancies, you have to really understand those discrepancies because they could be caused by missing transactions,

duplicate transactions, or timing issues.

So you've got to be able to speak to those and make any corrections as needed.

It's shocking how many people's books I see

that come to our accounting firm

and you can very much tell a bank reconciliation has never been completed

because their credit card may say that they have a positive 500 balance

when really they owe negative $2 ,000 on that card, right?

Step four is preparing the financial statements.

And under generally accepted accounting principles, there are three main financial reports that I recommend most business owners know and understand.

And that's going to be the income statement or profit and loss.

Both names are totally acceptable the balance sheet, and then lastly, the statement of cash flows.

And that basically just explains how the cash has moved in

and out of the business for that period and what the net cash increase or decrease was.

So these statements can often be run for various periods of time.

So normally at our firm, we prepare statements on a monthly basis.

So the monthly report would show that month's data, but also a year to date view.

So the business owner can go into their income statement and not only see how they did that month,

but how they're tracking for the whole year.

Now, the balance sheet is a little bit different because it's not over a span of time.

It's an as of period because the balance sheet is basically the statement of net worth of the business.

So what does the business own and what does the business owe?

So because there's really only a snapshot available for that

and there's not going to be the span of time like an income statement or profit and loss,

that would be run as of a certain date.

So as of December 31st. And then the statement of cash flow, similar to the profit and loss or income statement,

can be run for a span of time to show the activity over that period of time.

The next step is reviewing the financial statement.

So these beautiful statements mean nothing if we don't understand them.

So the first statement that we talked about, the income statement or profit and loss is giving you a summary of revenue,

cost of goods sold or cost of services sold,

which basically are those variable expenses that are changing as your revenue grows or as it decreases, right?

So for a product space business, that's going to be the cost of inventory that they sold during that period.

And then the next section is operating expenses.

And generally these are overhead expenses or fixed expenses.

And what that means is they don't fluctuate as much with revenue as the cost of goods sold expenses would.

So you're going to see things like rent and insurance and payroll, etc. in this part of the profit and loss or income statement.

The last line, the bottom line is going to tell you your net profit or net loss.

So this is really a great picture of how the business is performing.

Is there going to be profit left over after the month or is the business in the red?

Are they in a loss position?

The next statement is the balance sheet.

So like we talked about this is going to be a summary of what the business owns

which is called assets and that's at the top of the statement

and what they owe which is called liabilities and that's next

so that's going to be things like credit card balances loan balances

or any bills that are outstanding and then the last section is equity

which like we talked about is a summary of owners contributions to the business, owner's distributions from the business, and also a retained earnings.

So basically what is leftover, what is undistributed in the business.

And then lastly is our statement of cash flows.

And this is broken down into three main sections.

So it's cash flow from operations, cash flow from investing activities, and cash flow from financing activities.

So it pulls data from both the income statement and the balance sheet to show a cash summary.

So how much cash did you start the month with?

How much cash did you increase by or spend?

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And then what's your leftover cash balance?

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So it's a reconciliation of cash, which is a business's most important tool.

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Step six is to use your financial statements to make informed business decisions.

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So there is so much information to gather from these financial statements and really they tell a story of your business's performance.

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So some examples about how my clients have used their financial

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statements to make decisions is they track things like return on ad spend.

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So if they're spending a bunch of money on advertising they basically see what their return was in revenue

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and they can make a decision around whether to continue that ad campaign or to halt it altogether.

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Another good example is your payroll spend right so seeing the total amount

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that you spend to pay your team members and employees

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and tracking that on a consistent basis is really important

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because a lot of business owners like to track revenue per headcount

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so if there are people in your business that are working for you

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but aren't producing revenue they may be eating away at a lot of your profits

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and so it's really helpful to see that in one financial report

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and then lastly the most important number like I said is the net profit

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or net loss so really understanding that number

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and what it tells about the health of your business so

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if you're constantly in a net loss position look closer at your expenses

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and see what you might be able to cut

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or reduce to put you into that profit position okay so you've just learned the six steps for bookkeeping for a business

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And these steps are so important, whether you're doing your own bookkeeping for your business, or if you're interested in becoming a bookkeeper.

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Me and my team run a program called Brilliant Bookkeeper, and it will teach you just that.

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It'll provide you the mentorship and the coaching

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and the support to learn the skills needed to become a bookkeeper

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and seal the deal with your first client within 30 days.

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So I hope that you'll check that out if you're interested in.

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Bookkeeping really is the difference that can help you

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or your clients have a more profitable year and take home more income personally.

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So if you liked this video,

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please give it a thumbs up and subscribe to the channel and feel free to leave a comment or a question.

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We would love to hear from you.

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Thanks so much.

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Vocabulary and speaking notes for this lesson

This speaking lesson is built on the video “Bookkeeping in 6 Steps”. The speaker keeps coming back to these words: statement, cash, bookkeeping, financial, step. This video has 132 sentences and 1741 words to shadow. The speech runs for 10:41. The speaker talks at a natural 163 words per minute, close to everyday conversation. 88% of the words are among the 3,000 most common in English, so the vocabulary is easy to follow.

Key vocabulary in this video

15 words from the video worth learning, with pronunciation and meaning:

Word	Pronunciation	Meaning
transaction noun	/tɹænˈzækʃən/	The act of conducting or carrying out (business, negotiations, plans).
expense noun	/ɪkˈspɛns/	A spending or consuming, often a disbursement of funds.
sheet noun	/ʃit/	A thin bed cloth used as a covering for a mattress or as a layer over the sleeper.
summary noun	/ˈsʌm.ə.ɹi/	An abstract or a condensed presentation of the substance of a body of material.
spin verb	/spɪn/	To rotate, revolve, gyrate (usually quickly); to partially or completely rotate to face another direction.
equity noun	/ˈɛk.wɪ.ti/	Fairness, impartiality, or justice as determined in light of "natural law" or "natural right".
lastly adverb	/ˈlæstli/	Used to mark the beginning of the last in a list of items or propositions.
cloud noun	/ˈklaʊ̯d/	A visible mass of water droplets suspended in the air.
helpful adjective	/ˈhɛlp.fl̩/	Furnishing help; giving aid; useful.
contribution noun	/ˌkɑntɹɪˈbjuʃən/	Something given or offered that adds to a larger whole.
crucial adjective	/ˈkɹuː.ʃəl/	Essential or decisive for determining the outcome or future of something; extremely important; vital.
gather verb	/ˈɡæðɚ/	To collect normally separate things.
asset noun	/ˈæsɛt/	A thing or quality that has value, especially one that generates cash flows.
decrease verb	/dɪˈkɹiːs/	Of a quantity, to become smaller.
liability noun	/laɪəˈbɪlɪti/	An obligation, debt or responsibility owed to someone.

Phrasal verbs you will hear

Word	Meaning
break down verb	To stop functioning.
eat away at verb	To erode.
fall under verb	To belong to for purposes of categorization.
mess up verb	To make a mess of; to untidy, disorder, soil, or muss.
pull out verb	To withdraw; especially of military forces; to retreat.
sort through verb	To look through (a collection of documents, facts, etc.) to make sense of them or put them in order.
write down verb	To produce or set (something) down in writing; to record something.

Grammar in this video

The structures the speaker uses most, with the exact words from the video:

Structure	In the video
Passive voice be + past participle — the focus is on what happens, not who does it	is designed · is required · were issued
Present perfect have/has + past participle — a past action that still matters now	has never been completed · has moved · you've just learned
Relative clauses who / which + clause — extra information about a person or thing	owe which is · cash, which is
Possibility with “might / may” might/may + verb — something that is possible but not certain	may have · may say · may be

Pronunciation to watch

The speaker uses 20 contractions and reduced forms, such as you're, don't, I'm. Say them the short way, as you hear them.

The “th” sounds: gather /ˈɡæðɚ/, altogether /ɔl.tuˈɡɛð.ɚ/, thumb /ˈθʌm/
The “sh” and “zh” sounds: transaction /tɹænˈzækʃən/, sheet /ʃit/, contribution /ˌkɑntɹɪˈbjuʃən/, crucial /ˈkɹuː.ʃəl/, reconciliation /ˌɹɛkənˌsɪliˈeɪʃ(ə)n/
Long words — get the stress right: contribution /ˌkɑntɹɪˈbjuʃən/, liability /laɪəˈbɪlɪti/, reconciliation /ˌɹɛkənˌsɪliˈeɪʃ(ə)n/, essentially /ɪˈsɛnʃəli/, regulation /ˌɹɛɡjʊˈleɪʃən/

How to practise with this video

Listen to the whole video once without speaking and note the words you do not know.
Start at 0.75× speed, shadow it sentence by sentence, then go back to normal speed once it feels easy.
Record yourself and compare with the original, paying attention to words like transaction, expense, sheet.

What is the Shadowing Technique?

Shadowing is a science-backed language learning technique originally developed for professional interpreter training and popularized by polyglot Dr. Alexander Arguelles. The method is simple but powerful: you listen to native English audio and immediately repeat it out loud — like a shadow following the speaker with just a 1–2 second delay. Unlike passive listening or grammar drills, shadowing forces your brain and mouth muscles to simultaneously process and reproduce real speech patterns. Research shows it significantly improves pronunciation accuracy, intonation, rhythm, connected speech, listening comprehension, and speaking fluency — making it one of the most effective methods for IELTS Speaking preparation and real-world English communication.

Shadowing technique: read the full step-by-step guide →

Shadowing Practice: Bookkeeping in 6 Steps (for Beginners) - Learn English Speaking with Video

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