Electronic Signature Best Practices: What to Remember

Electronic signatures, or eSignatures, are now necessary for businesses and people in today’s fast-paced digital world. They are faster, safer, and more efficient than standard handwritten signatures. This speeds up processes and lowers costs. To get the most out of eSignatures, it’s important to follow best practices that ensure they’re legal, safe, and useful.

Understanding Electronic Signatures

What Is an Electronic Signature?

An electronic signature is a digital indication of a person’s intent to agree to the contents of a document. They can take various forms, including:

Typed Names: Entering a name in a signature field.
Drawn Signatures: Using a mouse or touchscreen to draw a signature.
Scanned Images: Inserting a scanned image of a handwritten signature.
Clicking “I Agree”: Clicking a button to signify agreement.

It’s important to distinguish between electronic signatures and digital signatures. While all digital signatures are electronic, not all electronic signatures are digital. Digital signatures employ cryptographic techniques to secure the signature, ensuring the integrity and authenticity of the signed document.

Legal Validity and Compliance of eSignatures

Globally, various laws recognize the legality of electronic signatures:

eIDAS Regulation (EU): Establishes electronic identification and trust services standards, ensuring eSignatures are valid across EU member states.
ESIGN Act (USA): Grants legal recognition to electronic signatures and records if all parties use them.
UETA (USA): Provides a legal framework for using electronic records and signatures in commerce.

How to Use Electronic Signatures (eSignatures) to Boost Efficiency and Security

Electronic signatures, or eSignatures, are a huge step forward for companies that want to make their paper processes more efficient. They save time, make things safer, and ensure the law is followed. To get the most out of them, it’s important to stick to best practices. Below, we’ll review nine tips to help you get the most out of eSignatures.

1. Choose a Reliable and Secure eSignature Solution

The foundation of a successful eSignature implementation is selecting the right tool. Not all eSignature platforms are created equal, so choosing one that meets your specific needs is crucial. Here’s what to consider:

Compliance: Ensure the provider complies with relevant laws like the ESIGN Act in the U.S. and eIDAS in the EU. These laws ensure that electronic signatures are legally binding and recognized in court.
Security Features: Look for advanced security measures such as encryption (to protect data during transmission and storage), audit trails (to track every action taken on a document), and multi-factor authentication (MFA) (to verify user identity).
User Experience: A platform that’s intuitive and easy to use encourages adoption across your team. Complicated systems can lead to frustration and slow down workflows.

A reliable eSignature solution safeguards your documents and builds trust with clients and partners.

2. Understand Compliance and Legal Regulations

Different industries and regions have specific laws governing eSignatures. Staying compliant is non-negotiable to avoid legal risks. Here’s a breakdown of key regulations:

GDPR (EU): The Health Insurance Portability and Accountability Act requires keeping computer health records safe. You have to do this if you work in healthcare.
HIPAA (USA): The Health Insurance Portability and Accountability Act requires keeping computer health records safe. You have to do this if you work in healthcare.
SOC 2: This certification is for service providers, and it focuses on data protection. It ensures that the company that handles your eSignature has strong security measures to keep private data safe.

Consulting with legal experts can help you navigate these regulations and ensure your eSignature processes are fully compliant.

3. Verify Signer Identity Before Signing

There is a big chance of scam with eSignatures. It’s important to ensure the signer is who they say they are to stop people from signing without permission. Here are some ways that work:

Email Verification: Send a unique link to the email address of the person who signed. This ensures that the right person can only see and sign the paper.
Biometrics: To add an extra layer of protection, use fingerprint or face recognition technology. This is especially helpful for deals worth a lot of money.
Government ID Validation: Ask for a scan of a valid ID, like a passport or driver’s license, to make sure the signer is who they say they are.

Adding multi-factor authentication (MFA) makes security even stronger by asking signers to prove who they are in multiple ways.

4. Use Audit Trails and Document Tracking

An audit trail keeps a full record of all the changes made to a document. It’s a strong way to ensure things are clear and settle disagreements. Some important parts of an audit trail are:

Timestamps: Write down when a paper was looked at, signed, or changed.
IP Addresses: Write down where the signer is to ensure they are who they say they are and in the right place.
Action Details: Keep track of every action, like whether the paper was approved, rejected, or changed.

Audit trails are particularly valuable in regulated industries like finance and healthcare, where detailed records are often required.

5. Secure Your Signed Documents

It’s important to keep a signed paper safe from people who shouldn’t be able to see or change it. Here’s how to keep the papers you signed safe:

Encryption: Encrypt documents during transmission and storage to prevent hackers from accessing sensitive information.
Access Controls: Restrict document access to authorized personnel only. Use role-based permissions to ensure that only the right people can view or edit documents.
Regular Backups: Make copies of all the signed papers so you don’t lose data because of computer problems or hacks.

These measures ensure that your eSignatures remain legally binding and your data stays safe.

6. Educate and Train Employees on eSignature Usage

Teach and educate your employees on how to use e-signature

Your team is very important to the success of putting in place eSignatures. Everyone knows how to use the platform well if they get the right training. Important areas for teaching are :

Platform Navigation: Teach employees to send, sign, and manage documents within the eSignature platform.
Security Protocols: Educate them on recognizing phishing attempts, securing login credentials, and using multi-factor authentication (MFA).
Compliance Requirements: Make sure they know the legal duties of eSignatures, like keeping records and protecting data.

Your team will stay current on best practices and help build a culture of security and compliance through regular training events.

7. Maintain Proper Recordkeeping and Document Retention

Keeping records in an organized way is important for compliance and speed. Here’s how to keep track of your signed papers properly:

Centralized Storage: Put your signed documents in a safe, cloud-based storage area. It’s easy to find things and put them away this way.
Retention Policies: Set the legal and business requirements for how long papers should be kept. For instance, tax records might need to be kept for a few years.
Version Control: Keep track of the different versions of a document so that you always work with the most up-to-date copy and can see what changes have been made.

Good recordkeeping reduces the risk of lost or mismanaged documents and ensures you’re prepared for audits or legal disputes.

8. Avoid Common eSignature Mistakes

Mistakes can happen even with the best tools. If you want to avoid some of the most usual mistakes, read on:

Signing Incomplete Documents: Always review documents thoroughly before signing to ensure all necessary information is included.
Ignoring Compliance Requirements: Stay current with legal regulations to avoid penalties or disputes.
Overlooking Security: Don’t cut corners on security measures like encryption or access controls.

You can avoid these mistakes and save time, money, and stress in the future.

9. Make eSignatures Part of Your Workflow

Adding eSignatures to your current business processes is the best way to get the most out of them. How to do it:

Automate Routine Tasks: Set up workflows to instantly sign documents for you. For instance, once a contract is accepted, it can be sent to people to sign without any help from a person.
API Integrations: Connect your eSignature solution with other business systems like CRM, ERP, or accounting software. This ensures a seamless flow of information across platforms.
Mobile Compatibility: Pick a platform that works well on phones and tablets. This makes the process more flexible and easy because clients and workers can sign documents on the go.

By embedding eSignatures into your workflow, you’ll reduce errors, eliminate paper-based processes, and speed up operations.

Future Trends in Electronic Signatures

The Rise of AI-Powered eSignatures

Artificial intelligence is transforming eSignatures by:

Enhancing Identity Verification: Using AI to analyze behavioral biometrics.
Predictive Analytics: Identifying potential fraud by analyzing signing patterns.

These advancements improve security and streamline the signing process.

Blockchain and Electronic Signatures

Blockchain technology offers:

Tamper-Proof Signatures: Immutable records of signed documents.
Smart Contracts: Self-executing contracts with terms directly written into code.

Integrating blockchain can enhance trust and transparency in digital transactions.

Mobile eSignatures and Remote Work

With the rise of remote work:

Mobile-First Solutions: eSignature platforms are optimized for mobile devices.
Remote Collaboration: Facilitating document signing across different locations seamlessly.

This flexibility ensures business continuity and convenience for users.

Conclusion

A strategic step toward digital change is using electronic signatures. Organizations can make sure their eSignature processes are safe, legal, and effective by following best practices like picking a private solution, learning about the laws that apply, checking signers’ identities, and improving workflows. Businesses will be better able to use electronic signatures to their full potential in the changing digital world if they stay current on new trends.

Implementing electronic signature best practices ensures security, compliance, and efficiency in your document workflows. Businesses can streamline their operations while maintaining legal integrity by choosing a reliable eSignature provider, verifying signer identity, securing signed documents, and optimizing workflow.

If you’re looking for a secure and seamless way to manage electronic signatures, SignPe offers a trusted solution. With robust encryption, audit trails, and compliance with industry regulations, SignPe ensures that your documents remain protected and legally binding. Simplify your signing process today with SignPe and experience hassle-free document management.