Companies with cross-border activity almost always spend money on translation, but rarely record it as one line. The spend is scattered across legal, finance, human resources and marketing budgets, so nobody really knows the total. Consolidating it produces two things: a better negotiating position, and the ability to plan.
Split the requirement into three layers
Recurring and predictable
Documents that appear every year: financial statements, licence renewals, employment contract updates, periodic compliance filings. The volume is stable and can be derived from last year's data.
Project-driven
Tied to plans already on the agenda: opening a new office, product certification, trademark registration, tenders whose timing is known.
Unforeseen
Disputes, sudden regulator requests, due diligence from a prospective partner, unscheduled audits. It cannot be planned, but it can be provisioned for.
Calculating layer one from historical data
Collect every translation invoice from the last twelve months across all departments. If your company has never done this, the total alone is often a surprise. Group by language pair and document type, then remove anything clearly one-off. What remains is the basis for layer one.
Add around ten per cent for growth in activity, unless you have a specific reason for a different figure.
Calculating layer two from the work plan
Take each department's annual work plan and mark every activity involving a foreign party or an overseas authority. Each mark almost certainly requires translation. Estimate the volume using the four-step method in the cost estimation guide, then total them.
Provisioning for layer three
The size of the provision depends on the company's risk profile. A company in active litigation, preparing a funding round, or operating in a closely supervised sector needs a larger provision. The usual range is 15 to 25 per cent of layers one and two combined.
Annual budget framework
| Layer | Source of the figure | Accuracy |
|---|---|---|
| Recurring | Twelve months of invoices, plus 10 per cent | High |
| Project | Departmental work plans, costed per activity | Medium |
| Provision | 15–25 per cent of layers one and two | Estimate |
Turning the budget into leverage
Once you know the annual total, you hold something valuable: volume you can commit to. Vendors price against certainty, and volume certainty is the form they value most. This is the basis for asking for a framework agreement with locked rates.
What to demand in return for a volume commitment
Not just a discount. Ask for reserved capacity during your busy periods, a company glossary maintained by the vendor, a named account owner, and periodic usage reporting so you can track actuals against budget through the year.
Read about framework agreementsTracking actuals through the year
- Ask for quarterly usage reports broken down by pages, language and department.
- Compare the realised average rate against the contract rate to confirm no drift.
- Log every express request and its cause — the pattern usually repeats and can be designed out.
- Review the glossary each half-year so consistency holds across departments.