Financial Translation and Everything You Need to Know

A global business owner may think that it wouldn’t be necessary to use another language for work, but this changes drastically if you're expanding your market or building partnerships with local corporations around the world.

Although most high-level corporate environments in the world use English to some extent, that doesn't mean it's the only language being spoken. For example, Taiwan was ranked the sixth-best destination for investment in the latest BERI report, and its official language is Mandarin Chinese (Traditional Chinese). This means that if you want to do business in Taiwan or with a Taiwanese company, you need to be able to thoroughly understand and correctly translate these documents, particularly those related to finance.

And as we know, the finance industry is one where a mistake in translation can have disastrous consequences. Even a simple mistranslation could lead to a loss of confidence in the company, resulting in a loss of business.

In this article, we'll talk about finance translation and everything you need to know about it.

What Financial Documents Are Typically Translated?

Financial translation is critical if you want to ensure that your translations can convey the context, complex statistical figures, and technical terms commonly found in financial documents.

The most common finance-related documents that require translation are the following.

• Annual reports. These are reports released to shareholders and potential partners and typically outline the company's financial condition and events of the previous year.
• Financial statements. These documents formally detail the financial activity and performance of a company over a certain period. 
• Investor relations documents. These outline your company's performance and financial status, such as the balance sheet, statement of stockholder's equity, and more.
• Banking documents. Any documents that record your dealings and agreements with a bank.
• Insurance documents. This corporate document details your company insurance policy, what it covers, who it protects, its limitations, and more.
• Contracts. These talk about the terms of any legally binding agreement that you have made with specific parties.
• Legal documents. There are a wide variety of legal documents that might need translation, including trademarks, patents, and other IP-related documents.
• Transfer pricing documentation. The TP is a standardized legal document for the tax authority involved in transfer pricing regulation.

Other types of documents commonly requested during international company transactions are audit confirmation, credit rating, and feasibility study reports.

All of these documents, by necessity, are highly technical – they go into detail about various aspects of your company's operation and are generally used for assessing the market value of your business.

Challenges of Financial Translation

Financial translation can be complicated and grueling. There are a few key challenges that come with translating finance-related documents.

• Financial Terminology

Financial documents are often highly technical, making them difficult to be translated accurately if the translator doesn’t possess a deep understanding of the subject matter.

For instance, a balance sheet lists a company's assets, liabilities, and equity. These concepts might be familiar to someone with a business background, but they can be challenging to understand for those without this specific domain knowledge.

Consequently, to ensure the quality of finance translation pieces, it's essential to work with a translator who is both knowledgeable about finance and experienced in translating financial documents.

• Formatting Differences

Financial services are a global industry; different countries often adopt different formats in the finance sector. For instance, figures, dates, units, or currencies on balance sheets in the United States might be displayed differently than one in Europe. This can make it challenging to ensure that the translated document is correctly formatted and easy to understand.

• Legal Compliance

Another requirement of financial translation is to ensure that the translated documents comply with all relevant regulations, such as ESG reporting standards. This is especially important for financial statements, which are subject to stringent accounting standards such as IFRS and GAAP. To meet relevant compliance, it's important to work with a translator who is familiar with these standards.

• Exchange Rate Change

Since finance is global, documents often need to be translated into multiple languages. This can be challenging because exchange rates fluctuate daily, which can impact the amounts specified in the translation.

For instance, if you're translating a document from Euros into US Dollars, and the exchange rate changes between when you start the project and when you finish, the amounts will also change.

The Most Common Errors in Financial Translation

• Formatting mistakes. One of the most common mistakes made in financial translation is overlooking the punctuation differences between languages. For example, commas are used in English to separate thousands, while in French, people use periods. This can lead to confusion and mistakes if the translator isn't careful.
• Violation of confidentiality. In finance, confidentiality is key. When translating financial documents, all information must remain confidential and should not be shared with anyone who isn't authorized to view it. This can be fairly complicated if the documents are sent to unqualified translators for translation.
• Unclear instructions. To prevent violation of confidentiality, some clients would hide certain information before sending it for translation. Another common mistake is unclear instructions from the client, which can lead to confusion, mistakes, and even omissions in translated content pieces. To avoid this, effective communication is crucial to request clear and concise instructions from the client for the finance translation projects.

How to Choose the Right Financial Translation Company

Technology and AI have come a long way, but translation and language in general are one area where the human touch cannot be replaced. Therefore, when choosing a financial translation company, here are a few things you should keep in mind:

• Expertise in finance. You'll want to make sure that the company obtains adequate domain knowledge in finance. This means that they are able to help you navigate through complex regulations while staying current with financial market dynamics.
• Accuracy. In finance, accuracy is essential. The company you choose should have a proven track record of translating documents accurately and in compliance with all relevant regulations.
• Details. The company should also be able to provide detailed information about its services, such as confidentiality measures, local legitimate measures, project timelines, workflow, cost estimation, etc.

As you can see, when it comes to finance translation, accuracy, and compliance are key. Make sure you choose a credible financial translation company that will work with you to ensure that all of your needs are met in the proper time frame that you expect.

If that's what you're looking for, Linguitronics is the only language translation service provider you'll ever need. Although we believe that technology is a valuable tool when it comes to translations, we prioritize human knowledge and put highly-skilled human brains at the forefront of everything we do.

Linguitronics for All Your Finance Translation Needs

Finance translation is critical when you're expanding your market or collaborating with international partners – which is why you should expect no less than the most accurate, contextual, and technical translation.

Here at Linguitronics, we aim to provide our clients with the best possible financial translation services. We have a team of expert translators who are highly knowledgeable in all aspects of finance, from accounting to investing, and we put them at the forefront of all our translation projects.

If you need documents translated that are related to finance, like prospectuses, annual reports, CSR/ESG reports, investment reports, risk management policies, merger filings, money laundering prevention, investment reports, and more, we can help. Contact Us Today for a free quote!
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