Did you know that adding e-signatures can reduce employee error rates by 80 percent?
While e-signatures aren’t new (in fact, they’ve been around since the 1990s), it wasn’t until the 2010s that many businesses started using them in their documentation processes.
And some late adopters had to implement e-signature collection in their businesses earlier this year when the COVID-19 pandemic forced many employees to work from home and all businesses to limit in-person contact to minimize the spread of the virus.
While the pandemic might have been the catalyst for widespread e-signature adoption among the holdouts, the benefits of using e-signatures go far beyond reducing person-to-person contact.
In this post, we’re going to share how you can use e-signatures to improve the documentation process for your business. First, let’s start with what an e-signature actually is.
What’s an e-signature?
An e-signature — aka electronic signature — is a legally binding way to sign a legal agreement, contract, or document electronically.
In fact, the U.S. made e-signatures legally binding back in 2000 when The ESIGN Act and the Uniform Electronic Transaction Act were passed. Around the same time, similar legislation was passed throughout the world, including in the United Kingdom and the European Union.
E-signatures are an alternative to the traditional wet signature, which requires someone to sign their name on a physical piece of paper. Wet signatures go back thousands of years.
Pro tip: Ancient historians discovered the world’s oldest signature on a clay tablet in Sumeria (i.e., modern day Iraq). The signature dates back to 3100 BC, making it more than 5,000 years old.
Despite being around for literally thousands of years, wet signatures have some real downsides.
The biggest one is that a wet signature requires both parties to either be physically present or to mail the document back and forth.
What are the benefits of e-signatures?
Here some of the main benefits of replacing wet signatures with e-signatures:
- Legally binding. For starters, e-signatures will hold up in a court of law. If executed properly, they are just as binding as a traditional wet signature.
- Faster. There’s no need to sign a document in person and then mail or fax it. (Who has a fax machine anymore?) Instead, you can request an electronic signature with the click of a button.
- Convenient. Besides being faster, there’s also an undeniable convenience factor to e-signatures, especially if the other person can sign the document on the go from their smartphone.
- Cheaper. You’ll save a lot of money on pens, paper, envelopes, and stamps.
- Take less time. Besides saving money, you’ll also speed up processing times. For example, even if both parties choose the fastest shipping method, it will still take at least one day to sign and return a document. Realistically, you’re looking at least three to five days when you mail a signed document back and forth compared to a few minutes online.
- More secure. All reputable e-signature software is fully encrypted and complies with the highest security standards. That’s not the case for mailed documents.
- Better for the environment. When everything is handled electronically, you save trees by reducing the amount of paper you use.
- Increase employee productivity. Your employees will also be more productive since they can literally press a few buttons to get documents signed instead of having to print a document, put it in an envelope, mail it, and then wait for the recipient to send it back with their signature.
- Minimize human errors. While it’s not foolproof, multiple studies have shown that electronic signatures reduce errors. And in the event you do make a mistake, it’s a lot easier to fix since that means sending a new email instead of mailing a new version.
What are some best practices for collecting e-signatures?
E-signatures are usually needed for contracts and financial and legal documents. It makes sense in these cases to cross your “t’s and dot your “i’s” to ensure you don’t accidentally void your agreement.
Here are five best practices to follow when asking someone to sign a document electronically:
- Authenticate signatures. The software should be able to be identified all of the people who sign the document.
- Ensure clear intent. Make sure all parties express clear intent to sign the document.
- Provide proof of identity and date. Can you prove that the person did, in fact, sign the document and that it wasn’t forged or changed at a later date?
- Establish explicit consent. In addition to establishing intent, you should also make sure that everyone is comfortable signing the document electronically.
- Keep records safe. Establish how long you need to hold onto these documents for safekeeping.
How do I add an e-signature to a business document?
There are two ways to add a digital signature to a document.
The easiest way, which is also fully compliant, is to use a trusted e-signature app.
However, if you’re looking for a quick way, here’s how to sign a PDF.
For example, if you’re using Adobe Acrobat Reader, you just need to take a few simple steps. First, open your PDF. Next, click on Fill & Sign in the Tools pane. Then, add your signature.
Pro tip: There are three ways to add a signature in Adobe Acrobat Reader: type, draw, and image.
Examining the most common e-signature use cases
From sales and HR to finance, legal, and healthcare, there are countless ways your company can use e-signatures to improve and speed up documentation processes.
Here are some of the most common use cases:
- New client contracts
- New employee contracts
- Freelancer contracts
- 401(k)/benefits agreements and paperwork
- Background check consent forms
- Tax forms
- Insurance paperwork
- Accounting/finance confidentiality agreements
- Legal confidentiality agreements
- Supplier/vendor agreements
- Purchase orders
- Patient confidentiality agreements
- Emergency contact forms
How to implement e-signatures in your organization
Here’s how to integrate e-signatures into your organization’s documentation process.
Put together a list of your must-have features
The best way to start is by putting together a list of all your must-have and nice-to-have features. This can include everything from price, security, compliance, and custom workflows to reporting, notifications, and custom branding options.
Research your options
There are countless e-signature options on the market. Here are some of the most popular ones:
- Adobe Sign
- Citrix RightSignature
- Zoho Sign
You can obviously find alternative options for these e-signature tools, articles that list alternatives does a pretty good job to provide the pros and cons for each tool, helping your decision making process such as this article about DocuSign alternatives.
Demo the top three to five apps
Unless you have copious amounts of free time or run an e-signature review site, there’s no point in setting up demos for all of the options above.
Instead, pick the top three to five options that stand out, then thoroughly research and test them.
Integrate your e-signature software with your key business software
Did you know it takes the average small business two to three months to fully implement an e-signature solution? And for large enterprises, it can take nine months.
Once you decide which option works best for your business, it’s time to integrate it with all of your key business systems, from your CRM to your HR software.
We recommend bringing in all key stakeholders, from finance and legal to IT and sales operations, early in the process. This makes the implementation process faster.
Craft an effective e-signature policy for your company
Just as your company has policies for paid time off, communication, and devices, you should also implement a policy for collecting e-signatures.
This ensures not only that everyone in the company follows the same process, but that the organization can also avoid compliance issues — and even fines — down the line.
Train your team to use your e-signature software
Now, it’s time to train your team to use this software. Do this before you go live, particularly if you’re in a highly regulated industry like finance or healthcare.
Start small and scale up
Any time you implement new software across a large enterprise, there’s a possibility something can break. This is why we recommend starting small — with just one team or department — then ramping up across the organization.
This allows you to collect feedback and catch any issues early on. You can then make adjustments before you roll out the software to more people.
Continue to iterate on your e-signature processes
Whenever you add new software, it isn’t a static, one-and-done process. For best results, make sure that you’re continuously collecting feedback from all stakeholders and using that feedback to refine your processes over time.
Whether you own a small accounting firm or a multimillion-dollar technology company, e-signatures make it easier to approve and sign documents for your business. This will save you valuable time and money.
Eralp is interested in literature, cinema, music, and technology. He is a digital marketing specialist at JotForm