An electronic signature is a process of attaching an encoded signature to an electronic document. Electronic signatures are legally binding based on federal and provincial laws in Canada and most other countries. Organizations are no longer tied to paper to execute contracts and the resulting process improvement and cost savings can be substantial.
Before we get into the benefits, let’s just clarify what the difference is between electronic signatures and digital signatures.
The terms electronic signature and digital signature are often used interchangeably, but there is a difference between the two.
Electronic signatures cover the full range of technologies and solutions to create signatures electronically, from simple images of a digital signature file attached to an electronic document, to encryption-based signatures.
There are several methods that can be used to capture signatures electronically, such as:
- Typing your name in a signature box
- Signing your name on a courier’s digital device
- Using an e-signature solution
Digital signatures are a specific type of electronic signature that has an additional authentication component for the signer. Digital signatures include a “digital certificate” that is issued only when there is validation of the identity of the signer. A type of encryption referred to as public key infrastructure is used to associate the signer with the document which provides additional certainty of the identity of the signer. In most cases, the extra steps for a digital signature are not required.
Not so long ago, before the legal recognition of electronic signatures, all contracts had to be signed, shipped, faxed, or scanned, and then filed. The process was very manual and included multiple steps making it time consuming and costly.
1. Reduce time to signature
There are several ways electronic signatures can simplify and expediate the contract process, including:
- An electronic signature is good for the life of the contract
- Negotiations can be simplified and accelerated. Each step in the process is validated and can be accessed by all parties involved. This allows issues to be signaled and tracked until contracts are fully executed
- Electronic signatures reduce delays in both updating and executing contracts even if multiple people in multiple geographies are involved.
Another benefit is increased security. Paper contracts can be tampered with. Many of the applications available for contract management software with electronic signing capability can detect changes, even minor ones making tampering much more difficult.
3. Lower Costs
The automated processes of electronic signing can reduce the financial cost of human error such as signing mistakes, which can slow down the process. Electronic signing software can help mitigate these risks by providing alerts about unusual issues involved with a contract.
In addition, there are the savings on items such as paper, copying, packaging, and shipping. These costs add up.
All in all, implementing electronic signature solutions can be helpful to organizations. MicroAge can help determine what the best IT services and solutions are to help your organization achieve your business goals. Contact us today to find out how we can help you.