Living in a digital world enables us to have certain advantages. You've probably already felt the pressure to go towards paperless possibilities for your business. Today, we can do things quickly; businesses move at very fast paces, deals are completed within seconds, bank transfers happen in the blink of an eye, etc. So how can we afford to fall behind when it comes to signing documents, especially with electronic signatures?
In the corporate sector, electronic signatures are gradually taking over as the standard. A growing number of businesses are going paperless, abandoning traditional pen-and-ink workflows in favour of digital alternatives. While it is unclear whether the concept of a completely paperless office will ever be practical, we are getting closer and closer to that reality.
Electronic signatures are at the heart of the paperless workflow. This is why their use has increased dramatically in the last few years.
Companies that choose electronic signatures tend to see a variety of positive results, ranging from reduced paperwork, reduced paper costs, and increased productivity and efficiency. Moreover, in the vast majority of cases, investing in a document management program provides a positive return on investment.
If you're thinking about using electronic signatures in your organization, the six proven benefits outlined below should be enough to push you over the edge.
What is an electronic signature?
The term 'electronic signature' or 'E signature' has different definitions, yet the meaning remains the same - an electronic signature that allows a person to give consent to a document's content
- Dictionary defines as symbols or other data in the digital form attached to an electronically transmitted document as verification of the sender’s intent to sign the document.
- Wikipedia defines: An electronic signature, or e-signature, is data that is logically associated with other data and which is used by the signatory to sign the associated data
- Adobe defines: An e-signature or electronic signature as an efficient, legally binding way to get approval on electronic documents. Secure and verifiable, it can replace a handwritten signature in virtually any process.
- European commission defines: an electronic signature is an electronic indication of a person’s intent to agree to the content of a document or a set of data to which the signature relates. Like its handwritten counterpart in the offline world, an electronic signature is a legal concept capturing the signatory's intent to be bound by the terms of the signed document.
Fun fact: It might sound like the terms digital signature and electronic signature are synonymous, but they're not the same. “Not all electronic signatures are digital signatures, but all digital signatures are a type of electronic signature”
In Digital signatures, person need to provide a form of certificate-based authentication to confirm the person signing is who they claim to be.
Is it secure to use an E-Signature?
We will be discussing the benefits of e-signature soon but before getting to know why they are secure and beneficial let's have a quick look at the evolution of the signature.
- First, there was the seal: one of the earliest marks of written identity far back as the Sumerians in 3500BCE who used them to stamp as an identity of quality authenticity. With time it grew up into a complex design to secure it from replication but with the age of new technology 3d printing to replicate a seal is not much of a big task.
- Second, Wet signature: this is the process of signing a paper document or contract using ink and pen. Before the 17th century, they were less popular than seals.. This got updated cause of rising literacy rates and complications in seal identity.
- Thirdly E-Signature comes into play: With the technology development and by 1995 internet and World Wide Web were established phenomena, the release of the PDF, e-signature became even more accessible.
With the use of E signature authentication of documents became more secure than wet signature as e-signature come with an electronic record that serves as an audit trail and proof of the transaction plus more detailed certificates of completion which include specific details about each signer on the document
Electronic signatures are legally recognised in many nations, including Australia, India, the European Union, Brazil, and the United States, as good as traditional signatures, making them fully valid. Therefore, making it more secure.
What Exactly Are the Benefits of Electronic Signature?
This makes sense when you consider the resources needed to process paper documents. A US employee uses two cases of paper annually on average, costing $40 each case. Without even factoring in storage space, printer repairs, ink, and other expenses, that comes to $8000 annually for a 100-person organization.
When running a business, one is constantly looking for ways to minimize expenses while maximizing gains. By choosing E-signatures, you can avoid paying for superfluous paper, pens, xeroxing, printing, and other miscellaneous expenses that come with the traditional paper-and-ink method of signing a document.
In fact, the amount of paper utilized by a typical organization is not entirely comprised of the papers requiring an electronic signature. However, there are still considerable savings to be had. Additionally, e-signature software typically enables safe online archiving of contracts, PDFs, proposals, invoices, etc. without the requirement for physical storage area.
- Faster document processing time
E-signatures can cut off an astounding number of hours from document turnaround times.
Based on one study, the use of e-signatures decreased the typical processing time for documents from five days to just 37 minutes.
You read that correctly, 37 minutes!
Using the handwritten paper-ink approach to sign a document might be a tedious operation. The process involves printing the document, faxing it, sending it by courier, scanning it, etc. Consider how long it would take you to send and receive a certain document that needs to be signed by a few persons.
You can save all the hassle by choosing to electronically sign your paperwork. It will enable you to quickly, if not immediately, sign a document! Electronic signatures are a simple choice that will save your business a tonne of time that can be put to much better use. Increasing your contract speed will provide you the advantage you need and enable you to uphold your public trust even more.
Organizational and corporate documents are legally binding, so all information must be presented accurately. It is of utmost importance that the documentation is accurate. If you still use the old procedures and a signer forgot to sign one or two pages, you must send it back to them and request that they correct their errors.
Contract management apps are typically used by businesses and people to add electronic signatures to papers. Numerous more advantages arise from using these apps, especially in terms of fewer errors in contracts, bids, invoices, and other documents.
According to research, e-signature apps reduce overall errors by an average of 80%. A set of tools made to operate with e-signatures are available to writers, managers, and legal professionals. These consist of content libraries, templates, and automated approval workflows.
- Safe and Secure
Making sure that official paperwork is handled properly and goes to the right people may be very stressful. Even with complete security, there is still a danger that your documents will be stolen, lost, or tampered with.
When you switch to the method of electronically signing your document you can speed up the procedure and use fewer hands. Additionally, since e-signatures frequently come with a digital audit trail composed of emails, signing certificates, saved copies of contracts, and other documents, it makes it easier to maintain track of all the required signing operations.
Also, a handwritten signature can be forged considerably easier than an electronic one. Even more, protection is offered to signers via digital signatures, a very secure type of online signing.
- Greater customer loyalty
E-signatures enhance more than just internal business procedures. They also enhance client happiness and loyalty by improving the consumer experience. E-signature-using companies typically have a better Net Promoter Score.
In addition to speeding the signing procedure and getting rid of the office printer, e-signatures provide clients with several advantages.
For one, customers can electronically sign documents from any device, which adds another level of efficiency. The recipient of proposals and contracts provided with a contract management solution typically doesn't need to exit their email app or download any files in order to approve them.
Additionally, clients are reassured by the added security of e-signatures that contracts won't be misplaced or lost.
- Positive return on investment (ROI)
In research by AIIM, 81% of participants reported that after using e-signature software for a year, they had seen a positive return on their investment. One-fourth of those questioned claimed they saw a return on their investment from e-signature solutions within three months.
It is simple and affordable to set up a software infrastructure that enables customers and staff to use electronic signatures. Apps exist in a variety of packages for businesses of all kinds (and individuals), and most of them provide dedicated onboarding assistance to make the switch to a paperless workflow as quick and painless as possible. Most businesses may usually see a profit from electronic signers just by reducing the expense of paper.
Oh, and we also must not overlook that they are beneficial to the environment!
It should not be a surprise that electronic signatures are significantly more environmentally friendly than pen-and-ink alternatives. Employers of e-signatures have contributed to hundreds of tonnes less paper being used.
Going paperless would be incredibly cost-friendly and practical for your company, as well as contribute to the promotion of a healthy environment. Additionally, you will spare yourself the headache of sorting through a mountain of documentation.
Is an Electronic signature legally binding in the United States of America?
Electronic signatures increase productivity and cut down on paper waste by removing the need for people to physically sign contracts and legal documents. However, some people continue to question the legal validity of e-signatures.
- Electronic Signatures in Global and National Commerce Act (ESIGN Act)
- The Uniform Electronic Transactions Act (UETA)
The Electronic Signatures in Global and National Commerce Act was passed by the federal government of the United States in 2000. The ESIGN Act made it clear that e-signatures are acceptable for use on legally binding documents if all parties opt to do sign digitally. This ruling is applicable across the U.S.
E-signatures normally carry the same legal weight as handwritten signatures under the federal ESIGN Act of 2000.
An e-signature must contain the following elements in order to be valid or recognised by a court:
- A digital seal with origin-tracking capabilities.
- A traceback to the original signer in the audit trail; and
- Reliable identity verification techniques for signers.
The Uniform Law Commission also created UETA (Uniform Electronic Transactions Act) in 1999 to offer a legal foundation for the use of electronic signatures on a state-by-state basis in addition to the ESIGN Act. The legality of e-signatures is described in relation to transferable records, automated transactions, and record keeping, among other things. 48 US states have ratified UETA.
Note: Business, governmental affairs, and e-commerce transactions are all covered under the UETA and the ESIGN Act. They do not, however, apply to documents like wills, marriage licences, death certificates, birth certificates, codicils, and testamentary trusts (as specified under section 103 of the ESIGN act).
What is an e-signature used for?
Several states adopted the UETA act to ensure uniformity in the use of e-signs and electronic records. The use of electronic signatures is a legal way to digitally secure approval of documents, contracts, or a set of documents.
Basically, any documents which need to be secured, Lock down quickly, or which requires reasonable set of security and giving the user legal binding and save his time can use e-signature.
The following documents are being prepared using these signatures for a variety of purposes:
- Processing invoices, sales proposals, and purchase agreements
- Recruitment and onboarding
- Timesheets, leases, and rental agreement
- Non-disclosure agreements (NDAs), non-compete agreements (NCCs), etc.
- Tax returns, bank statements, insurance forms, and other paperwork.
- Model and product releases
- Vendor agreements
- Internal compliance
- Authorization slips
- Expense reporting
E-signatures are used by businesses today for several reasons, including:
- Electronically signing PDF contracts and other contracts is quicker.
- Lessening the use of paper makes it simple to save documents digitally and enable electronic tracking of those documents throughout their content management lifecycle.
- They provide additional legal protection especially in instances of a contract breach or breach of an NDA
- The availability of digital tools facilitates the auto-integration of the e-signature into different document formats and templates to give users a quicker signing experience
Therefore, almost every aspect of life can benefit from using electronic signatures. Actually, unless your nation of residence specifies otherwise, there are no restrictions on when and where you can use them.
What documents are excluded from electronic signatures?
A wet signature or non-electronic signature is still favoured over an electronic signature in a few specific circumstances. For instance, a person must use an ink signature when filing for bankruptcy because an electronic signature is not accepted in this situation.
E-signatures and digital signatures are prohibited in the following situations as well:
- Other than checks, handwritten negotiable instruments
- A handwritten power of attorney (POA)
- Written trust agreements
- Written wills or other testamentary dispositions of this nature
- A handwritten agreement for the sale or transfer of any movable item or an interest in one
Some nations have not yet adopted electronic signatures, thus in those nations, the wet signature's validity prevails over that of the E-signature.
If you're still signing documents with the old-fashioned method of pen and paper, there's no need to panic or sound the alarms but now is a good time to transition immediately.
Electronic signatures are finally common enough that when presented with a document that needs to be electronically signed, people will no longer raise an eyebrow or wonder what all the fuss is about.
It not only helps you save a tonne of time, but it also advances your financial situation. By choosing E-signatures, you can sign papers more quickly, easily, and effectively than you could in the past.
They won't affect how your company does business. Numerous business applications that you may currently be using, such as PDF, Google Docs, Salesforce, Dropbox, Microsoft Word, etc., are compatible with electronic signature software. You have no excuse for not making an investment in one. Based on the wants and specifications of your corporation, every organization, administration, or company is certain to discover benefits.