In the past, anytime you needed to sign a contract or put your signature to a form or other piece of paper, you had to have an original document in front of you.
This usually created more work for every party involved and slowed down the process considerably. Important documents would also often simply get lost in the mail. Today, e-documents (those sent digitally) are becoming more and more common in all fields as people embrace the benefits of using them.
In 2000, the Electronic Signatures in Global and National Commerce Act first gave electronic signatures the same legal standing as handwritten ones, though many businesses have been slow to adopt this process until recently. If you're not sure whether or not to make the switch in your business, read on for the lowdown on e-documents and the main advantages of using them.
When it comes to e-document signatures, it's important to understand there are two main terms in the industry: electronic and digital. Whether your clients are signing a contract or paying for goods with an electronic check, you will deal with both electronic and digital signatures. While the terms are frequently used interchangeably and sound similar, they refer to different things.
An electronic signature is a general term typically referring to the electronic equivalent of a handwritten signature. When people agree to some sort of content contained in an electronic message that could be communicated through any electronic means, they give an electronic signature.
An electronic signature may include scanning or taking a picture of a handwritten signature and attaching it to a document or typing your name and initials, but it can also cover less specific methods. For example, you might check a box, provide an email address or password, submit information for knowledge-based verifications, give a phone authorization or swipe a credit or debit card at a retailer.
Electronic signatures are used as an audit history of a transaction. They take into account the verification of the person who sent the signed document, the recipient they sent it to, when the document was opened and the date and time of each step along the way. IP addresses may be a factor as well.
A digital signature, on the other hand, is more comprehensive. While it includes all of the elements mentioned above, it also includes a certificate of authority issued by a third party. This third party must validate the identity of both the person signing and the signature they create.
Digital signature applications include public key infrastructure (PKI) encryption technology. This particular type of signature confirms that intended recipients return the details they received without having made alterations.
There are numerous reasons to consider paperless signing. Electronic documents are less likely to get lost and can usually be easily forwarded on again if they don't make it to the intended recipient for some reason. This can often save a lot of time, energy and stress.
Dealing with physical pieces of paper costs businesses time and money. Paper documents need to be printed, put in an envelope, addressed, mailed, filed and later stored. This can add up to a lot of wasted time in document handling and postage. Significant amounts of money could be saved if you factor in the purchase cost of paper, the expense of printing and shipping and the potential fees involved in storing documentation over the years.
E-documents are also often more secure. Printed documents are more likely to be seen and read by unauthorized people or intercepted along the way. Paper documents also have more chance of being altered or destroyed. On the other hand, digital versions are typically sent directly from the sender to the recipient, automatically mitigating several risks.
Business owners and managers should also consider the effect e-documents have on their organization's reputation. Customers are busier and more demanding than ever before and expect convenience. Providing them the opportunity to sign and transfer contracts and forms digitally can strengthen a business' reputation as a customer service-oriented, tech-savvy organization.