You’ve probably noticed the growing number of activities and functions that are becoming digital, everything from finding a date for Friday night to closing business agreements, can now be done online. When it comes to businesses, some of their top priorities are efficiency, productivity, and data safety. So, it’s no surprise that electronic signatures, or e-signatures, have skyrocketed in popularity. Let’s make sure you have the knowledge to make the most out of your e-signatures.
In this guide we will explore the world of e-signatures, what they are, their benefits and how to use them effectively.
What are e-signatures?
Firstly, what do we actually mean when we say e-signatures? All signatures that are made electronically are e-signatures, but there are different types of e-signatures used in different scenarios. They’re called: basic e-signatures, digital and graphical.
- Basic e-signatures encompass various forms, from scanned images to typed names, widely accepted for electronic consent.
- Digital signatures are a specific type of e-signature that employ cryptographic techniques and digital certificates, offering heightened security and legal acceptance.
- Graphic signatures are visual representations of handwritten signatures. They provide a personal touch but may lack cryptographic security.
An e-signature provides a secure and accurate identification method for the signatory to complete a seamless electronic transaction. They are a secure and legally recognized way to obtain consent or approval on electronic documents or forms, and a much more convenient and efficient way to sign documents.
An electronic signature can be as simple as a person’s typed name, an electronic image of their handwritten signature, or even a fingerprint or voiceprint in some cases. They are commonly used in less formal agreements, everyday business transactions, and any situation where a traditional handwritten signature was previously used. This ease of use and broad legal acceptance make electronic signatures a key tool in modern digital transactions, streamlining processes and eliminating the need for physical paperwork.
Global legal frameworks for e-signatures
E-signatures are governed by a multitude of legal acts and regulations worldwide. Examples include PIPEDA in Canada, UETA and the ESIGN Act Sec 106 in the US, eIDAS in the European Union, the Electronic Transactions Act 1999 in Australia, and the Electronic Communications Act 2000 in the UK.
When handling e-signatures from different regions with different regulations you need to be aware of the varying legal requirements, acceptance and recognition of electronic signatures in each jurisdiction, ensuring comprehensive compliance with local laws.
Key benefits of e-signatures
1. Time efficiency
E-signatures eliminate the need for physical presence, allowing parties to sign documents from anywhere, as long as there is an internet connection. This reduces the time required for document processing, sending and approval.
2. Cost savings
The traditional signing process involves printing, scanning and shipping documents, involves costs for paper, ink and postage. E-signatures eliminate these expenses and can save you a lot of money – especially if you’re dealing with documents with several hundred pages.
3. Enhanced security
As mentioned earlier, there are global legal frameworks ensuring the reliability of e-signatures, making them highly secure. Many e-signature solutions also provide audit trails, ensuring a transparent record of the signing process.
4. Easy accessibility
Signed documents can easily be stored in a secure place, while still being accessible to all parties involved. This facilitates structure and seamless collaboration, both between external parties and internally.
5. Environmental impact
Going paperless with e-signatures aligns with sustainability goals, reducing the environmental impact associated with paper production, shipping and waste.
How to use e-signatures effectively
How do you make sure you get the most out of your e-signatures? We got you.
1. Ensure compliance
Make sure your e-signature software is compliant with legal acts, such as UETA and eIDAS, and that it meets essential terms and conditions, including;
- All parties involved must agree to the electronic signing of documents.
- Electronic signatures are valid only when the signer has the intention to sign, and they should have the option to decline signature requests.
- Signers should visibly mark or provide a statement on the electronic document, ensuring a clear connection to the signed document.
- Whether through a name or a unique mark, the signature should clearly identify the person who signed the document.
2. Craft a clear policy
Develop a comprehensive e-signature policy aligned with regulations and legislation. Not having a policy in place increases the risk of not being compliant with e-signature processes, potentially rendering electronic records unsupported or, even worse, unenforceable. In your policy, you should clearly state its objectives, scope, and usage rules. Communicate the policy formally to all team members and customers, defining roles, secure storage and best practices.
3. Prioritize staff training
Provide training to ensure that all team members understand and follow e-signature processes correctly. This will help standardize how you use e-signatures across the organization. By regularly updating employees on the latest e-signature legislation and encouraging continuous learning you can provide quality transactions between you and your partners.
You can also provide training to stakeholders on how to use the chosen e-signature solution to further ensure a smooth transition.
4. Implement an audit trail
Audit trails collect and store information about the delivery and signing process for each record presented – an important role when the authenticity of an electronic signature is questioned. Ensure that your e-signature software offers an audit trail, capturing key information like timestamps, IP addresses, signer details and any document changes.
An audit trail will also act as proof in case of disputes, ensuring the authenticity and validity of electronic signatures.
5. Evaluate and measure success
Regularly evaluating the effectiveness of your e-signature solution involves assessing various aspects, such as the efficiency of the signing process, customer satisfaction, and any potential bottlenecks or areas for improvement. By doing so you can identify opportunities to improve the customer experience, streamline your e-sign workflows and address evolving needs or preferences.
E-signing with Trackado
In our mission to make contract management as smooth and simple as possible, we have incorporated an e-signing function into our software. It’s a seamless integration where the contracts are signed electronically, and automatically stored in the repository, streamlining the entire process.
With Trackado, you can:
- Prepare and send documents for electronic signature to any device.
- Add attachments to the signing process or require attachments from the participants.
- Manage all your e-signing processes from within Trackado and receive your signed documents directly back into Trackado.
- When the contract is signed, you’ll automatically receive an audit trail which is saved in the repository.
Explore more of Trackado’s features in our Product Tour!