5 things small businesses need to know about Electronic Signatures

Even in today’s digitally-first world, 80% of business documents are manually printed, signed, scanned, and faxed.

Such paper-based processes create massive roadblocks in the efficiency of your business workflow. And, it can spell trouble for your customer experience.

Recent research suggests that more than 37% of small business leaders face issues with incomplete agreements or those signed by the wrong people. 

Electronic signatures offer SMBs an easy solution for such issues.

But, during the early stages of research into electronic signatures, most small businesses struggle to find the answers they need. Are these signatures secure? Are they legal across all states in the U.S.? What kinds of industry-specific documents do electronic signatures support? 

The sooner you answer these questions, the faster you reap the benefits of the electronic signature solution. This is why, in this blog post, we will discuss the following:

5 things about electronic signatures that you never knew

Electronic signatures have the same legal value as handwritten signatures. Hence, small businesses may use it to send purchase orders (PO), payslips, employment contracts, or quotes. 

Yet, some unfounded myths around electronic signatures tend to confuse potential users.

As experts in the space, we are here to bust these misconceptions and help you make an informed technology purchase decision. 

1. Digital signatures are not the same as electronic signatures

It’s true, the terms ‘electronic signature’ and ‘digital signature’ are often used interchangeably. But, they are two very different things. An electronic signature is equivalent to the digitized version of a handwritten signature. Businesses use it to or show their intent to approve or accept the contents of an electronic document.

Digital signatures are a category of advanced electronic signatures. They leverage algorithms to generate a digital fingerprint (also known as a “hash” of a digital certificate). These fingerprints are unique to each document. And it links to the identity of the person who signed the electronic document.

Small businesses may use either electronic and digital signatures to sign electronic documents. But, it is important to understand the local regulations before choosing between the two methods.

2. Electronic signatures have the same legal status as wet ink signatures

Electronic signatures are a federally recognized form of signature. The ESIGN Act (Electronic Signatures in Global and National Commerce) in the United States and the eIDAS Regulation (Electronic Identification and Authentication and Trust Services) in the E.U. prevent the denial of legal effect, validity, or enforceability of an electronically signed document solely because it is in an electronic form.

Today, over 60 countries around the world have adopted their own set of laws and standards. Thus, electronic signatures are legal and enforceable in a court of law, as long as the signing process is designed and implemented as per the requirements of the law.

3. Electronic signatures are legal across all states in the U.S.

Contrary to popular belief, electronic signatures are legal in all 50 U.S. states. 

Misunderstandings about the eSignature’s legal reach stem from the fact that only 47 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands have adopted the UETA (Uniform Electronic Transactions Act).

Indeed, Illinois, New York, and Washington have not adopted UETA. But, don’t forget that they have implemented similar statutes validating the legality of electronic signatures.

Additionally, the federal government adopted the ESIGN Act in 2000. This grants electronic signatures the same validity as wet ink signatures across the U.S.

4. Electronic signatures are legal for most document types across many industries

You can electronically sign proposals, rent agreements, sales contracts, and just about any other kind of agreement. But, there are a few key exceptions stated by most electronic signature laws around the world.

For instance, the ESIGN Act and UETA do not recognize the electronic signing of property transfers, wills, and other legal notices.

Also, the IT Act (The Information Technology Act) of India doesn’t recognize electronically signed powers of attorney, wills, and real estate contracts.

5. Electronic signatures do not need technical expertise for implementation

Integrating electronic signature technology into your workflow is easy. Most electronic signature solutions these days are rolling out built-in integration capabilities.

So, employees can electronically sign from within their favorite business apps, such as Zoho, Outlook, and Office 365. This, in turn, frees up their time to focus on the task at hand.

Recent research claims that 45% of small business leaders see electronic signatures as a means to increase employee productivity.

Additionally, when choosing an electronic signature software, focus on an intuitive user experience. This way, you can have your team up and running in minutes.

11 reasons why small businesses love Signeasy 

The pandemic has brought physical contract exchange and signing to a standstill. Hence, small and medium businesses are struggling to maintain business continuity.

But, no more. Today, Signeasy enables no-contact approvals on routine paperwork. 

You may self-sign, request for signatures, and store electronic documents from anywhere, at any time. We also fast-track electronic communication and sharing of legally signed documents.

Here are some of the other reasons for the growing adoption of eSignature solutions by small businesses:

  1. Reduces paperwork turnaround times from days to minutes. 
  2. Automates mundane paperwork to improve staff efficiency and productivity.
  3. Reduces the need for human assistance in the signing process by offering a guided signing workflow.
  4. Allows users to send signature requests out to many parties at the same time.
  5. Helps track incomplete paperwork and automates the sending of reminders to signers.
  6. Secures electronic records with SSL encryption, a digital audit trail, and biometric identification.
  7. Enables users to sign as they work thanks to integrations with business and productivity tools (Freshteam, G Suite, Microsoft Teams, etc.)
  8. Complies with the American ESIGN Act, the EU’s eIDAS regulation, and other electronic signature laws.
  9. Presents no software learning curve and doesn’t need any elaborate setup.
  10. Cuts down on complex paperwork processes by eliminating the need for printing, scanning, or faxing.
  11. Saves more on paper, ink, courier, and productivity costs, as compared to manual signature workflow.

To learn more about electronic signature solutions, sign up for Signeasy’s free trial today.

FAQs about electronic signatures

Here are responses to commonly asked questions about the electronic format of signing documents: 

How do electronic signatures work?

When you enter an electronic signature into the signature page of a document, it creates a unique link between the signer and the document. This electronic sound, symbol, or process (along with an audit trail) helps prove in the court of law that the right person signed the document.

Can you insert an electronic signature in Word? 

To sign a word document by electronic means, you need to use an electronic signature software such as Signeasy. With a few clicks of the software, a signer can approve the electronic document and send it onwards.

All the signatory needs to do is:
Login to Signeasy. 
Click Sign Document.
Import your document.
Click Signature.
Click anywhere on the signature page to add your signature. 
Click Finish.

How do you add an electronic signature to pdf?

A signer who wishes to add an electronic signature to the PDF may follow these steps:
Log in to Signeasy.
Choose your PDF file after clicking on Sign Document.
Click Signature, and then click on any part of the signature page.
Choose to draw, type, or upload an image of your signature.
Click Finish, once the signature block is properly positioned.

Can an electronic be legally binding?

According to the American ESIGN Act, the EU’s eIDAS regulation, and other electronic signature laws, the electronic signature method legally binds all signers. No wonder, more electronic contracts are being approved using an electronic signing solution.

Recommended Reads