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Imagine a world without any kind of electronic signatures. Through a number of manual steps, traditional signature processes can appear endless. These include:
➤ Print the relevant documents
➤ Distribute the documents
➤ Find the signer
➤ Scan and email the document
➤ Check the validity of the wet signature
➤ Save for management
Time-critical agreements can suffer because all of these steps are required to get a simple signature. Furthermore, documents may be lost or located in different locations, which will only further delay processing. Fortunately, thanks to electronic signatures, the signing process is now swiftly, straightforward, sure and - more importantly - compliant with the law.
What Exactly is an eSignature?
An electronic signature Often referred to as an e-signature, it is basically a digital version of a person's name that is attached to a document to indicate their consent.
In the European Union, the EU Regulation No. 910/2014, that in most transactions, electronic signatures have the same legal effect as handwritten signatures, provided that a person gives their consent. In the United States, the Electronic Signatures in Global and National Commerce Act something similar.
What Are the Benefits of eSignatures?
There are several obvious advantages to using an electronic signature. Here are some of the top reasons why you should introduce e-signatures to your business:
1. Save time and resources
- Signing with pen and paper is a time-consuming process, but with an electronic signature You can save several hours a week that you can use for more valuable activities. Applications for electronic signatures can be sent quickly and are usually signed immediately. For that reason alone, your signature agreement will be faster and more effective.
2. A safer alternative to ink on paper
- As a result of the additional identity verification, encryption and integrity verification, electronic signatures are much more secure. Compared to a handwritten signature, an electronic signature is much more difficult to falsify.
3. Email ping pong will come to an end
- Get rid of email ping pong, by working on an agreement with your employees and business partners in real time. They can add comments, and you can instantly edit and update the contract from anywhere and at any time on a single platform.
4. Track contract progress
- Say goodbye to the days when you had to run behind contracts. With the help of an electronic signature, it becomes easy to keep track of documents, monitor the status of contracts, and even send reminders to signatories to ensure timely signatures.
5. Better customer experience
- Customer satisfaction has a huge impact on your company's success. And it goes without saying that your customers are happier when you can interact with them faster and more easily. Customers also benefit from the time savings and greater convenience of the signature process.
6. Positive impact on the environment
- Another major benefit of electronic signatures is the reduction in paper usage. Your documents don't need to be printed, scanned, or physically archived. The introduction of an electronic signature shows the community that your organization modern and responsible is.
The Requirements for an Electronic Signature
In most circumstances, electronic signatures have the same legal force as traditional signatures. However, they must meet a number of requirements to be legally recognized.
Legally binding electronic signatures must generally:
- Prove that the signatory is who he claims to be.
- Make it clear that the signatory wanted to sign electronically. The best way to show this is to offer the signer the option to sign on paper and let him decide.
- Indicate the willingness of the signer to sign (for example, by the presence of a “cancel” button or another option to refuse to sign).
- Offer the opportunity to independently confirm the legitimacy of the signatory. This often means the presence of an IP address, a time stamp, a mobile phone number, and an email trail. For the purpose of identification, two-stage identification may also be useful in this situation.
By meeting the above requirements, eSignatures serve as a legally binding alternative to bulky physical papers to obtain customer consent.
What Types of Electronic Signatures Are Allowed?
According to the eIDAS Regulation, there are three levels of electronic signatures:
Simple electronic signature (SES)
- It can be as simple as ticking a box and making a statement, sending an email with your name, or even just a scanned signature.
Advanced electronic signature (AES)
- Requires more information to:
- Identify the signer
- Uniquely link the signature to the signer
- and track down any additional data changes.
This type of signature typically uses certificates and strong encryption and provides additional information to confirm the authenticity of the signature.
Qualified electronic signature (QES):
- The qualified electronic signature is considered the most complete and secure way to digitally prove a person's identity and their consent to the content of a document. Compared to traditional handwritten signatures, QES offers legal validity with an even higher degree of legitimacy.
Advanced and qualified electronic signatures can provide higher levels of authentication, integrity, and security, making them better suited for higher-value transactions. These signatures are also just as legally binding as traditional signatures.
How to Implement and Use Electronic Signatures
The process of creating an electronic signature is simple but varies depending on the software used. Many well-known platforms such as PandaDoc and DocuSign will used by large companies across the European continent, but they lack a basic framework for managing contracts.
Here is a brief guide to introducing electronic signatures in your company:
1. Make a list of features that are important to you
- It's best to start by making a list of all the features that you both absolutely must have and would like to have. This list can cover a wide range of topics, including costs, security, compliance, and custom workflows, as well as options for reports, notifications, and custom branding.
2. Find out about your options
- There are many different options for e-signatures on the market, such as DocuSign and PandaDoc, but there are clearly better alternatives out there.
Our articles top.legal vs. PandaDoc and top.legal vs. DocuSign are good examples of comparisons in which the advantages and disadvantages of the individual tools are presented very well.
3. Sign up for a demo to try out the three e-signature tools you've chosen
- It's pointless to set up demos for tons of e-signature tools unless you have plenty of free time. Instead, limit yourself to the top three options, which you then thoroughly research and test.
4. Introduce your e-signature tool to your organization
- Since the entire company must be converted to using electronic signatures, all employees and departments should be involved in the process. Have conversations to address issues, provide information, and identify the needs of each department.
5. Create and outline an effective process
- Once everything is set up, electronic signatures must become part of the standard operating procedures of your company and employees. This not only ensures that everyone in the company follows the same process, but also that the organization can avoid compliance issues — and even fines — in the future.
