Development in digital technology has introduced new levels of efficiency across almost all industries. In the business world, everything from the way companies communicate to accounting, HR, marketing and even how documents are signed has been improved. Digital signatures like those offered by Eversign or Docusign took some time before gaining wide acceptance, but small businesses and large enterprises alike now use the technology instead of overnighting documents back and forth.
Here are 10 ways that digital signatures like the options Eversign or Docusign offer are changing the way that contracts are signed and the impact they have on small businesses.
Changes in Legality
It goes without saying, the most important element of a contract is its mutually accepted legality. Both signatories and any overseeing governing bodies have to agree to its legitimacy.
Since their inception, digital signatures have been recognized as legitimate and legally binding representations of an agreement. Where applicable, digital signatures have clearly altered the definition of “signed” when it comes to contracts.
Any eSignatures by Eversign, for example, all meet the strict security and authentication requirements required under U.S. and European law.
The United States Electronic Signatures in Global and National Commerce (ESIGN) Act and the Uniform Electronic Transactions Act (UETA) have requirements before an electronic signature can be recognized as valid under U.S. laws. These include the intent to sign, consent to do business electronically, association of signature with the record and record retention.
If both parties agree to these, digital signatures are then valid and legally binding.
Changes in Security
The security threat in today’s digital landscape is no secret, but physical documents are just as vulnerable or more. In addition to theft or being misplaced, paper can be damaged in a flood, fire or other unforeseen disaster.
With digital signatures, documents are no longer aimlessly floating around waiting for a signature like a physical document, and once they are signed they can be stored digitally for safe keeping. Best of all, they can be accessed from anywhere at any time.
Greater Efficiency in Multi-Transaction Contracts
The power of digital signatures is evident in how they’ve changed the way multiple businesses sign contracts. Internal and external parties can sign contracts regardless of location faster than ever before. Because of digital signatures, local, national and international parties are able to more easily finalize a deal and expedite the signatory process.
Changes in Controls and Audits
Digital signatures make it easier to manage a wide range of record keeping practices. It quickly turns contracts into excellent sources of documentation, whether the contract is an internal agreement between employees or an external one with another organization.
The technology has changed the way contracts are managed and archived, so they can be accessed immediately for e-discovery or when there is an audit.
Greater Efficiency in Internal Contracts
Digital signatures have also altered the internal operations of businesses. The efficiency and convenience the technology offers has seen its use increase dramatically. More companies are using contracts to enforce general operations, which in the past didn’t require such agreements.
Internal contracts include everything from basic assignments on a project to more formal agreements, such as promotions and employee contracts. Digital signatures deliver an aspect of formality and accountability to the day-to-day operations of a small business that are legally binding.
Improvement in Company Image
Implementing digital signatures lets your customers, vendors and partners know your company has the latest technology in place when it comes to finalizing a contract.
All things being equal, the fact that your small business uses digital signatures could be the differentiator to get that deal. The additional expense of the back and forth of a physical document, whether it is local, in another part of the country or around the world, is one more task or expense everyone would rather avoid.
Improved Corporate Social Responsibility
A certain level of CSR is expected from businesses when they enter into a partnership with organizations in different industries. With digital signatures, you are showing your level of awareness about the environmental impact of using paper and the associated costs that go along with it.
It is not just the paper, but the transportation of a document, especially if the other signatory is far away. All of this has an environmental impact. For many of today’s businesses that are already going paperless, using digital signatures lets them know you are on the same page when it comes to the environment.
Better Time Management
Physical document management is time consuming before and after signing a contract. The physical signing, handling and managing of paper contracts as well as the pre and post signing tasks often go unnoticed.
Once the document is signed, the inefficiency also extends to the life of the contract. If one of your employees needs to see a contract at a later time, make a copy and send it to a client, the process can take a minimum of 20 minutes to find, fax, send a copy and put it back. If you add that to all of your physical documents, you can see how the time can quickly add up. This of course doesn’t take into account a lost or misplaced document.
With digital signatures, it is as easy as finding the contract on a server and sending it in an email in less than one minute.
For example, Eversign securely stores your documents after completion and makes them available in your Eversign account. You can also manage your documents by setting them to auto-expire, exporting the to private location or permanently removing them from the Eversign system.
Better Cost Management
For a business, implementing a policy that saves money without affecting the overall efficiency and functionality of a service is great all around.
Digital signatures are much cheaper. Not having to pay postage, courier, storage, management and other document handling fees is definitely a plus.
Accelerated Company Evolution
Digital signatures provide a fundamental shift in how a business signs contracts. Implementing this solution also makes the organization evolve technologically because solutions also have to be integrated.
Digital signatures and cloud-based contract management are designed to work well with other applications by automating repetitive tasks and making resources available remotely.
On the surface, digital signatures may seem to only change the way a company signs contracts, but the fact is they change the way businesses operate for the better in general.