With more and more businesses going global, the need for proper international communication increases, which means the translation of financial documents, among other business documents, which should be available in different languages. The estimated earnings of the language services industry by end of 2018 would be US $46.52 billion according to Common Sense Advisory and US $50 billion by Nimdzi.
This is good news for translators who are specialists in translating financial documents as well as the chief financial officers, financial controllers and accountants.
This may be so but translating financial documents is specialized work and it needs a different skill set to ensure accuracy and high quality.
What are financial documents?
All companies, especially multinationals generate several documents. They produce business plans and sales forecasts. They have various analysis and reports required for administrative processes of local management and the executives at their headquarters. Financial documents are sometimes called financial statements. They are required for reporting a business’ financial information, which are critical in the analysis of the company’s success.
Each region has different management practices and their accounting systems differ. Despite this, the financial position of the business is presented in a standard format, which includes a cash flow statement, income statement and a balance sheet.
Since the financial documents are prepared in different languages and different accounting processes, they require translation. This presents a major challenge to the translator. Translating financial documents demands more from the translator and requires understanding of financial systems and the experience to be able to provide translated documents that can be meaningful and useful to their different users.
Requirements of financial document translation
All translation projects require confidentiality and privacy, but financial translation demands more because of the nature of the documents. They are very vital to the company’s operations, stability, integrity and success.
1. Privacy and confidentiality
Anyone who has to handle these types of sensitive documents should know their responsibility to keep the secrecy and fidelity of the documents. Clients should be careful about selecting the translation agency that will handle their financial document translation. The company should have a proven track record in maintaining confidentiality and privacy of their clients. They have to fully trust their translators.
Types of financial documents that usually require translation include policy documents, fact sheets, sales projections, audit reports, contracts, financial statements, business plans, annual reports, public offering prospectuses, profit and loss statements, shareholder communications, board resolutions and sales projections. Press materials are also included in this category.
2. Regulatory compliance
Companies from other countries wanting to collaborate with organizations in the United States for example, have to file specific documents with regulatory organizations in the United States, like the SEC or the U.S. Securities and Exchange Commission. Since they want to enter the U.S. market, they need to have their required documents translated into English. They need to hire a translator who is familiar with the specific industry they belong to and the regulations that pertain to that particular industry sector.
3. Knowledge of specific terminology
Industry niches and specific administrative business processes like accounting differ between regions. For financial translations, it is important that the right terminology be used in the right context. If the company is huge and is present in many countries, it is necessary for them to coordinate with their translators in order to build a uniform financial terminology exclusive to their company or their specific industry.
Even in two countries that speak English such as the United Kingdom and the United States, their financial terms might look the same at the first glance but there would actually be some slight differences, such as:
American English British English
legal holiday bank holiday
underground economy black economy
bridge loan bridging loan
durable goods consumer durables
checking account current account
hazard pay danger money
fiscal year financial year
leverage gearing
installment plan hire purchase
common stock ordinary share
pay envelope pay packet
stock option share option
lawyer solicitor
labor union trade union
It goes without saying that the financial translator, aside from being knowledgeable in financial terminology must also know the current regulations that affect local, regional and international businesses. Details are very important to financial documents so the translator must be aware that accuracy should be maintained aside from using the right legal and financial terminology, such as the use and positioning of commas and decimal points.
Conforming to international standards
Plenty of translation work is required by an international company. An organization must carefully choose the language services provider to ensure professional conduct, security, accuracy and expertise in their specific industry. It is difficult to be knowledgeable in the accounting, financial, business and legal terms in two languages. The same is true in complying with the international standards, which can differ not only in the terminology but also in sentence structures.
U.S. versus EU standards
If the company is operating in any European Union member country, following the International Financial Reporting Standards (IFRS) is a strict requirement. The IFRS furnishes universal guidelines for the preparation of financial statements and their disclosure. Its closest equivalent in the United States is the GAAP or the Generally Accepted Accounting Principles. The translator must know that there are still many differences between the two standards to prevent errors. The IFRS is principle-based while GAAP is rules-based. The two also differ in research methodology and convergence.
Relevance and consistency
The nuances of the different terminologies should be very familiar with the translator. It will help in maintaining consistency. Having a terminology database is likewise important. Likewise, it is also vital that the database is reviewed from time to time, in order to check if all of the terms are still relevant. International and local standards change therefore it is also necessary to update your records.
Subject matter expertise
The client should see to it that the translator to handle their financial document translation is a subject matter expert. Getting a professional translator who is knowledgeable in finance assures you that you’ll have accurate and high quality translation.
Common mistakes in translation of financial documents
It is to the advantage of the client to know about the mistakes commonly committed during the financial document translation.
The use and placement of punctuation marks can make a huge difference in accuracy and correctness of the translation because of the rules in writing currency in many countries. In the United States for example, one thousand five hundred is written as 1,500. In many European countries however, the number would be smaller by one thousand. Moreover, depending on the language, 1,500 could be written as 1.500, 1 500, 1’500, 1500.
Security and confidentiality are huge issues with financial documents. Therefore, clients should never attempt to lower their translation costs by using any of the free online translation tools. You might be inadvertently making your financial documents accessible to third parties, which could also violate some confidentiality policies.
It is critical that the client provides the translator with explicit and clear instructions to avoid mistranslations.
Mistranslations can be avoided by ensuring that your financial documents are written with translation in mind. This means that the writer must use the right financial and legal terminologies. Likewise, it is better to choose the words that are easy to understand and translate without sacrificing the integrity and factuality of the financial documents. It can help avoid using terms that may have several or different meaning in other languages.
Each financial document has distinct features that a professional translation agency can identify. The agency knows which parts have to be translated in a specific way. It has the experience to understand the format required by different agencies and governing bodies while preserving the accuracy of the facts and figures.
Professional financial translation providers are aware of the responsibility they are given by clients to render flawless translation of their financial statements. Financial translators are also obliged to maintain confidentiality of all the financial documents entrusted to them.
We at Day Translations, Inc. understand how meticulous and detailed financial and business translations can be, which is why we only assign the task to our subject matter experts on business and finance. They have the right set of skills, the experience and the expertise to translate any type of business and financial documents. Our business clients are fully satisfied by the fast turnaround time and accuracy of our financial translations. We accord your financial documents with the utmost security because we know that your documents need the highest level of confidentiality and privacy. Whenever you need accurate translation of your financial documents, give us call at 1-800-969-6853 or send us an email at Contact us. We are available any time of the day, every day of the year, so you do not have to wait long for your high quality, professionally done financial translations.