Why is it important to translate your financial statements?

For any company that is international or seeks to expand globally, to translate your financial statements is of paramount importance. And if several languages are involved in your company, you should be clear about some aspects when translating your annual reports.

 

Why professional translators should translate financial statements

They’re just numbers, right? And these are international… Well, not really. Cultural conventions  affect all kinds of messages and numbers form a language with different standards for each culture.

The translation of financial statements, carried out by professional translators, can free us from major conceptual errors. Just by entering the Anglo-Saxon world (in which obviously, this type of document is translated the most), we find differences that can be catastrophic if not taken into account:

The comma and decimal point

In English, unlike in Spanish, the comma separates three-digit groups (thousands, millions, etc.) and the dot separates whole numbers from decimals.

Therefore, a figure like this: $100.000 means one hundred thousand dollars in Spanish but means one hundred dollars in English. Small difference, right?

 

One English (or Brazilian or Greek) billion is not the same as one Spanish billion.

 We know that these figures are very high for many companies. It’s just that not everything that appears in a financial statement are financial figures. It is not that hard for a company to manage one billion of something that is measured in small amounts (litres, for example).

To clarify: an English billion is (1,000,000,000), while a Spanish billion is (1.000.000.000.000).

 

Imperial or decimal system

If when translating financial statements some figures appear, we’d better be careful because things can get even more complicated.

Depending on the country, either the imperial system (pounds, miles, etc., in England or the EU) or the metric system (Australia or New Zealand) will be used.

 

Specialised translation or sworn translation?

One of the first questions we must ask when translating financial statemtents is what and who we are doing it for? Once we know this, then we must assess the degree of certainty we need to show to our audience. Consider these options:

Specialised translation

Let’s say that the report is for the shareholders, or the staff, and we present it annually: they trust us, and it is information that is given to them regularly.

For this reason, a specialised translation will be enough: it will be carried out by a professional translator who has knowledge of economics and financial background.

Sworn translation of financial and economic texts

A translation will have to be certified when the report is an important document for a later event.

Imagine that we have a round of funding with international investors from a particular country, or that we are closing an M&A with a foreign company.

In this case a sworn translation of financial statements would be suitable: a translation signed and stamped by an official sworn translator in the destination country which gives it official status before any entity in that country.

We ensure that any error in the translation can be handled by an external entity (in the case of Spain, the Office for the Interpretation of Languages), which will give complete certainty to the two parties.

 

Terminology is essential when translating financial statements

Furthermore, when translating financial reports, we often come across very specific terminology that requires knowledge in the field. If we do not know the most common terms in economics, our translation could be fatal.

We need professional translators with great knowledge of specific glossaries.

Experts that know that a Spanish “acción” is not an action in English, but a share or equity, or that a rising market in Ireland or India is not an upward market but a bull market. It’s best that there are no errors that damage our image!

Be transparent, but don’t be too literal when explaining the performance of your company

That is because doing a literal translation can be very costly. Look for a translation services provider with background in economics, who are familiar with the specific terms and numerical conventions in the target language.

Think about whether the translation of your company economic and financial texts that you need must be certified. In case you want to provide extra certainty, go for a sworn translation, otherwise  stick with a specialised translation service. Numbers matter, so don’t disregard them!

If you need to translate any economic or financial texts for your company or you need a sworn translation, don’t hesitate and contact us.