Technology Tip
Dave Pelland has extensive experience covering the business use of technology, networking and communications tools by companies of all sizes. Dave's editorial and corporate experience includes more than 10 years editing an electronic technology and communications industry newsletter for a global professional services firm.

Using Digital Signatures Effectively

Using Digital Signatures Effectively

Using digital signatures to complete agreements offers a cost-effective and secure way for small businesses to streamline processes and improve productivity.

Contracts and agreements are a necessary part of running any organization, and digital signatures help small business owners reduce a lot of the administrative overhead that’s traditionally been associated with getting documents exchanged, signed and returned.

In many cases, completing an agreement can be as simple as opening a document and clicking a couple of times. This allows both parties to spend less time dealing with paperwork, freeing up time that’s better invested in other activities.

Understanding Digital Signatures

The term “digital signature” refers to a subset of electronic signature technologies that serve the confirmation and agreement purposes of a physical signature. While an electronic signature can be as basic as clicking the “agree” button as you run an app for the first time, a digital signature adds encryption and locks the file to prevent future alteration.

Digital signatures are considered legally binding, although different countries have specific requirements for legal acceptability. Some of the requirements for making a digital signature valid include:

  • The signer must show a clear intention to sign electronically, and agree to accept an electronic signature (typically through a checkbox or their signature)
  • Both parties need to receive the signed document and the ability to access it later
  • The signer must have the option to opt-out of signing the agreement electronically.

Digital Advantages

Digital signatures offer advantages over physically signed documents, starting with the need to get a piece of paper in front of your counterparty to sign. If you email a document that needs a signature, the recipient has to print the document (or at least the page that needs to be signed), sign the document, scan it, save it and send it back.

In contrast, creating a digital signature can be a simple as downloading a document, typing your name or pasting a signature file into the appropriate box. Different apps take varying approaches, but any digital signature program offers an easy alternative to the potential hassles of getting a physical signature on a digital document.

In addition, a digitally signed document can’t be altered. Each file contains a digital audit trail of when it was signed and by whom. And some mobile digital signature apps use the device’s GPS capabilities to add the location where a document was signed.

Another potential advantage is that many digital signature providers include templates for commonly used documents, such as sales contracts, non-disclosure agreements, human resources documents, and other forms or documents many small businesses need. These templates can be customized easily to fit your specific situation.

Features to Consider

One of the important characteristics as you’re comparing digital signature applications is how easy it is to send documents, and for your recipients to sign and return them. Although the encryption underlining digital signatures is technically complex, the best programs hide the complexity and are straightforward to use.

You should also look for integration with the productivity tools you already use, such as Microsoft Office or Google Docs. Being able to blend digital signatures into your existing workflow will provide additional convenience and productivity enhancements.

If your salesforce is primarily in the field, accepting mobile signatures can be a helpful feature.

Popular digital signature apps include DocuSign, Adobe Sign, HelloSign, and others.

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