We all know about signatures, it’s that little mark or symbol we affix to our names to show our agreement to a written document. A seal to the deal, so to say. But businesses are trying to go paperless nowadays, both to reduce costs and be environmentally sensitive. And the signature is an important aspect of business that hinders some companies from going totally digital and paperless. This led to the development of digital signature software. These are software that allows a certain person to associate themselves with a particular document in coded messages instead of a wet ink signature.But what do we really know about digital signatures? Here are nine of the most important questions and their answers regarding digital signatures and digital signature software.
What Are Digital Signatures and What Do They Include?
Digital signatures are sometimes called electronic signatures or eSignatures. This is the digital equivalent of your wet ink signature, the one you practice over and over when you were young and the one you affix to your identification cards and important documents. Just like your signature is unique, this digital signature is also one of a kind. They are like fingerprints or special coded messages that are unique to you as the user and to the document you signed.
There are three elements that consists a digital signature. First one is the digital certificate which is unique to the signer. No other signers have this digital certificate. The second one is a private key which allows access only to the signer and holder of the private key. The last component is the public key which will allow validation of the signature. It is hard to fake a digital signature but the people you will transact with will still need to validate your digital signature.
Are Digital and Electronic Signatures the Same?
The ESIGN Act of 2000 defines electronic signatures as an electronic symbol, process or sound that associates a person with an electronic content. This could be an image of a wet ink signature, the ‘I accept’ clause in website service agreements or a signature signed using a tablet or digital pad. Electronic signature is a term that encompasses all forms of association of a person to a certain electronic content. On the other hand, digital signatures are only under electronic signatures being that a digital signature is based on a Public Key Infrastructure or PKI technology. Digital signatures are unique, cannot be tampered with and copied and more secure than other eSignature tools. Under the ESIGN Act, digital signatures are the only thing accepted around the world as a form of agreement on online documents.
What Is the Hosting Service for Digital Signature Software?
There are two types of hosting for digital signature tools. The first one is on-premise, this means the software will be hosted in your office or another site of your choosing. This means that you have to buy the license for the software instead of renting it. You would also need an IT department specific to the maintenance of the software host. It also means that you have total control over what you want to customize about the software you are installing. There is more privacy and security with this type of hosting. And it ensures that all the documents that are uploaded on the server are yours and your company’s alone.
The other type of hosting is cloud based. It could mean a dedicated cloud hosting for your company or shared cloud service. Cloud based hosting is a more immediate solution if you want to use to digital signature software instantly. There would be no hardware to set up with this type of hosting. This is cheaper since the service provider will be in charge of providing the cloud server.
Why Use Digital Signatures?
Other than going paperless, there are many advantages to using digital signatures. Having an automated operation has helped businesses streamline transactions. A research by Aberdeen Group has yielded positive results about electronic signature tools. According to the research, digital signatures have helped businesses improve in customer renewal and retention rates. There are also reduced errors in proposals. The most important advantage of digital signatures is that it shortens sales cycles. This means, you can do more business in a shorter amount of time.
The software also helps companies get back their return on investment quickly by expediting business processes, improving collaboration and efficiency, and reducing operational costs.
Can You Use Digital Signatures for Everything?
There are many documents that will honor the top eSignature tools, these include:
- Purchase orders
- Business contracts and agreements
- Sales proposals, client contracts
- Lease and loan agreements
- Documents in the human resource department
- Policies and work instructions
- Designs, drawing plans, reports and manufacturing instructions
- Consent forms for patients, drug prescriptions and lab reports
These are just a few of the many documents that can be signed with digital signature tools. Refer to your service provider for other documents that will accept digital signatures.
Are Digital Signatures Legal?
In the United States and most countries, documents that are signed digitally are legally binding. The ESIGN Act of 2000 has ensured that eSignatures are valid. Contracts that are made and signed online can be as legally binding as those printed and signed with wet ink signatures. This law has ensured that there will no longer be any doubts and uncertainties regarding the legalities of electronic contracts. There will always be traditional thinkers that will prefer printed contracts rather than electronic contracts. But just know that both are legal and has legal repercussions if breached.
There are exemptions to the eSignature law. Electronic versions of wills, adoption papers, divorce documents, foreclosure, eviction notices, and other documents that were mentioned on the ESIGN Act of 2000 are not invalid if signed electronically. Check with your service providers to know more about which documents can be signed or not. Also, read eSignature tool reviews, these things might be mentioned.
How Is It Validated and Secured?
Electronic signature software allows anyone to validate the signer of a particular document. They can also check if the document has been altered or tampered with from the date it was signed to the date you are checking. A detailed log of activities is offered by some software vendors. The validation process is composed of two steps. They are:
- To verify the document integrity. This will let you know if the document was changed from the day it was signed. If anything has been changed in the document, it renders the signature invalid. There is a unique code for every signature and document that will ensure the integrity of the document.
- To verify the identity of the signatory. There is a certificate unique to the signatory that will ensure their identity. If your computer can recognize the certificate then the identity of the signer is verified, if there are errors with the certificate, there might be problems with the identity of the signer.
How to Manage Signers and Credentials
To ensure the validity of a document and signatures affixed, the signers and their credentials need to be managed properly. If you want to know more about how your software handles management of signers’ credentials, read digital signature software reviews. The credentials mentioned here are the private keys and digital certificates that are unique to the users. This is an important question you have to ask your software service provider. You have to know how they will file and protect your credentials from possible misuse.
There are two ways managing credentials can be done. The first one is through a decentralized approach, where the credentials are installed to the signers’ computer or a storage device. If your company has many signers, this can be expensive. The second way is a centralized approach. The credentials are saved in a centralized server. This makes managing things simpler, since everything is in the same place. This is good for companies with many signatories.
What Are Digital Certificates?
Digital certificates are issued to eSignature tools users to verify that they are the same person as the one doing the signing. Digital certificates can be compared to fingerprints which is unique to a certain person. These certificates are issued by Certificate Authorities; they can either be from the company or organization itself or an independent body that sells certificates. The certificate is used to authenticate the identity of the signer.
A digital certificate works with a public key to verify the signer’s identity. Both the digital certificate and the public key are only issued to a certain person to validate the existence of his digital signatures. The owner of the digital certificate and public key is the only one who can use these credentials.
Many businesses and companies are going with the trend of becoming paperless. Transactions can now be done online and even though signatures are needed for every document and contract, the top eSignature tools have made digital signatures possible and easy.
Want to know the best digital signature software for your business? Check out the reviews and read the users’ opinions.
Trevor Price
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