Why Signing Documents Digitally is the Future of Contract Management.
If you are thinking about going remote, hiring workers offshore, or reaching international clients, you are probably wondering how secure and convenient it is to sign documents through internet and not on paper.
So, what's the legitimacy of digitally signing documents? Well, the E-Sign Act (2000), states that electronic signatures are valid and legally binding, and should not be considered otherwise solely because they are electronic. For instance, DocuSign, the most popular e-signature software with over a billion users worldwide, is valid and legally binding in 188 countries around the world.
If you are considering trying one of these e-signature platforms, here are some benefits and challenges of digitally signing documents.
What Is E-Signature And Why Are They Legal
E-signatures are digital signatures that replace the need for traditional handwritten ones on paper documents. They work by capturing an individual's unique signature, storing them as a digital image or unique code, and adding it to a document whenever needed. These new cloud-based signing protocols offer numerous benefits such as improved efficiency, cost savings, and enhanced security. We’ll talk about this in a minute.
Despite their digital nature, e-signatures have the same legal validity as traditional signatures. In the United States, in addition to the E-Sign Act, the Uniform Electronic Transactions Act (UETA) has been adopted by 47 states and provides a framework for their use. The UETA establishes that electronic signatures and records are the equivalent of traditional ones and have the same legal effect as paper.
The legal validity of e-signatures has also been recognized internationally, with many countries passing laws and regulations that support their use. For instance, in Europe, the eIDAS Regulation establishes a harmonized legal framework that applies to all EU members. Canada, Australia, and countries from South America also have their own e-signature regulations.
Overall, the legal validity of electronic signatures varies by country, but most of them recognize and regulate the use of electronic signatures in business transactions.
The Benefits of e-Signatures
Save time
Signing documents through E-signatures is much faster than the traditional handwritten way. Not only you can do it in just a few seconds by pushing a button, but everybody involved is noticed right after. Also, as it already has its own validation protocols, there is no longer the need to go through notaries or any other bureaucracy.
Save money and archive space
Printing paper and hiring storehouses for paper documents are expensive. By digitally signing documents you can free up space in the office and forget about ink cartridges. The entire signing process is now handled over a phone or computer wherever you are.
Hire fully remote offshore workers
Hiring workers located outside the US is gaining more and more popularity as it opens up a vast pool of qualified professionals at half the costs. But navigating legal and tax compliance can be a complex undertaking. As e-signatures are bound to international standards, documents can be signed without the need for face-to-face meetings, while still ensuring compliance with security protocols.
Reduce risk
E-signature platforms offer complex authentication and security features that help ensure that your documents are signed safely and securely. Thanks to this, e-signatures are legally enforceable and very difficult to forge, making them a more secure option than handwritten signatures. Paper documents can always be stolen or permanently damaged.
Enable automation
E-signatures are particularly interesting to accountants. Automation e-signature can be used to sign invoices, contracts, and other accounting documents, saving time and effort. Automation e-signature can also help with various accounting regulations and legal requirements compliance. This can be particularly useful in industries where compliance is critical, such as financial services.
Sign documents anywhere
Maybe this is obvious, but your remote workers can sign their contracts while on the bus, and you can verify documents delivered from the beach or the airport.
Workflow tracking
By digitizing the entire process, e-signatures have also made it easier to track and monitor contracts, ensuring greater transparency and accountability. You know exactly who has opened, signed, or approved a document, and who is holding you up.
Most Popular e-Signature platforms
According to Investopedia, this is the top ranking e- Signature of 2023:
- Best Overall: PandaDoc
- Best Value: eSignatures.io
- Best Free Option: Preview for macOS
- Best for Freelancers: HelloSign
- Best for Small Businesses: Adobe Acrobat Pro / Adobe Sign
- Best for Contract Management: DocuSign
- Best for Payment Collection: signNow
The Future of Contract Management
E-signatures have a major component of the digital transformation of contract management. With their ability to streamline the entire process, from document creation to signature collection and storage, e-signatures have revolutionized the way contracts are managed. They have eliminated the need for manual signatures and physical paperwork, resulting in faster turnaround times and reduced costs.
As businesses continue to embrace digital transformation, e-signatures will undoubtedly remain a vital tool in the world of contract management, enabling companies to operate more efficiently, securely, and effectively in a rapidly evolving digital landscape.
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Kevin Mitchell, CPA
Senior Manager and CPA with over 20 years of experience in accounting and financial services, specializing in risk management and regulatory compliance. Skilled in managing audits and leading teams to deliver exceptional services. Proud father of two.
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Solve document challenges with e-signatures
