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What is an eSignature?

An electronic signature, or eSignature, is a convenient, cost effective, legally binding, and secure way for signers to electronically agree to a document’s terms and conditions without requiring a “wet” (pen and paper) signature.

Electronic signature definition

Electronic signatures are very common in today’s business world due to their efficiency, simplicity, and environmental friendliness. Many of these transactions are multi-party, making the traditional signing process time-consuming, expensive, and error prone. With electronic signatures, gone are the days of printing, signing, scanning, and emailing a signed document, only to have it printed, signed, scanned, and emailed again for the next signing party.

eSignatures solutions available on the market today allow you to setup, request, sign/remind, send and store documents as well as manage the workflow around the eSignature process itself, including actions that must be taken before and after the actual signing ceremony.

These solutions enable you to do all of this from any device, anywhere, including mobile devices. Integrations are also a key component of an eSignature solution, allowing organizations to dynamically pull and merge data from CRM systems like Salesforce, or integrating an eSignature capability into an existing user experience and process flow that might be currently held back by printing, wet signing, and sending.

Are eSignatures legal?

Yes, eSignatures are recognized by many countries around the world as a legally binding way to sign a document. In the U.S., the Uniform Electronic Transaction Act (UETA) of 1999 and the ESIGN (Electronic Signatures in Global and National Commerce Act) Act of 2000 made e-signed documents legally binding as long as all parties consent to e-signing, with other wet signature rules still applying (showing intent to agree, attributing the e-signature to the document and name of person signing, and the electronic document being retained for future reference).

The only documents that still must be signed with pen and paper are family law-related documents such as wills, trust, and divorce documents, as well as court-related documents.

Are eSignatures secure?

Yes, eSignatures are secure, and more than wet signatures for a few reasons. Wet signatures can be forged, and signed documents lost or tampered with. With an e-signed document, an audit trail is generated and stored, tracking back to the signer’s authenticated identity and location and what documents were signed and when. E-signed documents should be transmitted and stored in encrypted form to prevent tampering in a cloud environment that safely stores personally identifiable information, the documents signed, and any associated payment information.

What are examples of eSignatures?

Signatures are required on many types of business transactions, from offer letters to purchase orders to vendor and sales contracts to real estate transactions to insurance policies. eSignature complexity can range from a single signature and date at the end of a document, to dozens of fields needing completion throughout the document (fill in the blanks, checkboxes, initials on each page, etc.), to dozens of fields across multiple signers across multiple parties where an automated workflow is needed to advance each step of the process.

What is the difference between electronic and digital signatures?

Digital signatures are a subset of electronic signatures. eSignatures in their simplest form provide an image of your signature, whether hand-drawn or selected from a list of cursive templates, digitally imprinted on an electronic document. Digital signatures take security to a new level by cryptographically attaching a third-party-authorized digital certificate to your eSignature that is unique to you, providing proof that you are in fact the person signing the document and not someone else. Public and private keys associated with your digital certificate ensure that no one can falsely impersonate the signer.

For many business transactions, such as signing an NDA or a vendor contract, eSignatures are sufficient. However if the transaction involves highly sensitive personal data and/or takes place within a highly regulated industry, digital signatures may be the preferred route.

How do eSignatures work?

1. Set up

The setup process involves selecting the document or file to be signed, identifying the areas where you want the recipient(s) to sign or complete data, selecting the data type of the field (fill-in, signature, date, etc.), and specifying the recipient names, email addresses, and order to be sent. For more sophisticated workflows, you would also configure what happens before the eSigning ceremony—like creating a personalized document to sign by merging data from the CRM system or triggering the eSigning to be auto-sent upon a certain condition like change of sales stage to “proposal”—and what happens after the eSigning, such as sending a thank you email with the fully executed document and exporting the document to a system of record. This is where a broader workflow product that integrates eSignature would come into the picture.

2. Request

Kicking off the eSignature process can be done manually or via a condition trigger (date/time, email received, field changed, etc.). eSignature requests can also be done individually or in batches, for example, sending an update to a segment of your customer base. You can also set up eSignature requests to send to multiple recipients at once, or one at a time in a specified order so that recipients two and three cannot sign until recipient one signs.

3. Sign

On the recipient side, modern eSignature solutions can support signing via desktop, mobile web page, mobile app, or mobile text link. The key here is to provide an eSignature capability that is accessible anytime, anywhere, from any device. The recipient simply clicks on the eSignature link and taps each field to either sign or complete the requested data, and a few seconds later, submits the information to the requestor.

4. Remind

eSignature solutions also provide the ability to auto-remind recipients via email or text to sign if they have not yet done so. This further accelerates the eSigning process.

5. Send and Store

Once eSigning is complete, the fully executed document should be auto-sent to all parties and automatically stored for later reference in an integrated system of record.

What are the benefits of eSignatures?

Small businesses, mid-market enterprises, and large enterprises alike need eSignature capabilities, across all departments such as:

  • Sales: quotes, customer contracts
  • Marketing: purchase orders, vendor contracts
  • Product: technology partnerships, vendor contracts
  • Customer Success: renewal contracts, vendor contracts
  • Finance and Accounting: supplier invoices, vendor contracts
  • HR: employee offer, onboarding, and termination documents

eSignature capability improves the speed, agility, and efficiency of these departments, ultimately driving more revenue and better profitability. Customers, partners, and vendors love the simplicity and convenience of doing business with organizations that eSign. Today eSignatures are rapidly becoming an expectation of business rather than the exception, leaving those still operating with pen and paper behind.