Research states that companies that use the pen and paper method of collecting physical signatures often waste an entire day in processing.
For many small business entrepreneurs, days can feel like a marathon of tasks that never seem to end, especially when it comes to getting their paperwork sorted and documents signed.
Think about it.
You have to download the document in the right format, print, sign, scan it and wait for the recipient to do the same. The process becomes all the more complex when there are numerous stakeholders involved.
Phew, that’s a lot. It’s for this reason that many businesses have started to adopt eSignatures as a way to free up their time. But that’s not the only reason one should adopt them!
In this post, we share the benefits of eSignatures, the various use cases for small businesses, as well as when not to use them. So if you’ve been on the fence about using eSignatures, this post is for you (fingers crossed, we change your mind!)
Read along
Is eSignature legally binding?
If you’re wondering whether an eSignature is legally binding, the short answer is YES.
An eSignature is legally binding and is recognised and enforceable in almost every part of the world. In Australia, the Electronic Transactions Act 1999 (Cth) regulates the use of eSignatures.
A few things, however, to consider before using an eSignature is that there needs to be:
- Consent by the recipient to receive electronic documents
- You must Identify the individual who is agreeing to the electronic document
- Clarify that the eSignature means that the recipient is accepting the document
eSignatures can also be used for legal documents such as deeds and agreements under the Corporations Amendment (Meetings and Documents) Act 2022. This means that agents can sign deeds without being appointed by deed (such as a power of attorney).
What is the difference between eSignature and a digital signature?
A digital signature relies on cryptography-based technology, providing an extra level of security because once you have provided your signature, the contents of the message can’t be modified without breaking the validity of the signature.
An electronic signature can simply be an image of your signature passed into a word document, for example, or even your email signature.
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What are the benefits of eSignatures?
Electronic signatures are increasingly becoming a necessity in a paperless, digital world. Besides being legally acceptable, electronic signatures provide many advantages that can improve your business’s daily processes.
The key benefits of eSignatures include:
1. Operational efficiency and time-saving
Do you find finalising a commercial or any other business process a time-consuming ordeal?
This is where an eSignature solution can improve operational efficiency and accelerate the tedious tasks in your business. Using an electronic signature will:
- Reduce the time spent waiting for a signatory to be available for a wet handwritten signature.
- Save time singing, printing, and manually posting documents.
- Allow you the chance to save time on contract creation with customers, contractors, and employees.
- Enable everyone, whether they are inside or outside your business, to sign at any time from any device — mobile device, laptop, or tablet
2. User experience
If you interact with customers and suppliers daily, leveraging electronic signatures will improve the customer experience. The benefits include:
- Providing the convenience of signing a contract from anywhere
- Flexibility for your stakeholders to use any device to sign a contract. For example, using a smartphone, laptop, or tablet
- It saves time as the transaction can be completed within minutes
3. Security
Using an eSignature will guarantee that you can safeguard essential documents with a high level of security. Security is maintained with eSignatures because:
- Each signature is protected with a tamper-proof seal – It alerts you if changes are made to the document after signing
- Different levels of authentication can be used
- There is a trail of online evidence and a backup of documents
- Less manual checks are required to reduce the level of human error that can occur
4. Positive impact on sustainability
Other than the positive impacts eSignatures will have on your business; electronic signatures have a significant effect on our environment and sustainability in general. Why? Here are a few reasons:
- By signing remotely, you reduce the need to travel, whether it’s with your car or using public transportation
- Using an eSignautre means reducing the need for printing paper documents
- Signing electronically means there is no need for copying, scanning and physically archiving the paper documents once you’re done. This can all be stored and uploaded online
5. Reducing business costs
As well as operational efficiency, using an eSignature will save business costs. Costs will be reduced in the following ways:
- Reducing staff hours required in preparing physical paper contracts and documents
- Reducing administrative costs – No need for paper, stamps, ink, space for physical archiving
- Electronic signing reduces labour, and there is less room for human error, thereby saving time and money
6. Tracking progress
Often when needing a signature from a stakeholder, it can be challenging to track the document’s progress and if it has even been signed. Have you ever asked yourself, ‘Have they signed it yet?’ or ‘Where is my document at?’.
With an electronic signature, you won’t have this issue because:
- Using electronic signature software will help you track the progress of all your documents online
- Some software solutions give you the chance to send reminder emails
- The electronic signing process means that you can keep all your records in an organised manner online
7. Compliance
As eSignatures are enforceable under the Electronic Transactions Act 1999 (Cth), there is a guarantee that if you use it, you can always ensure that you’re being legally compliant.
In addition, whatever eSignature tool you use, you can sleep peacefully knowing that they are always up to date and in compliance with relevant laws and regulations because of their quick and electronic nature.
8. Scalability
Have you always wanted to enter into more agreements or hire additional employees, but you’re afraid that if you do, you will need to keep more physical documents & store them away, so they don’t get lost?
With an eSignature, you won’t have to worry about this. Everything can be kept online in an organised manner, so if you want to expand your business efficiently, an eSignature is the way to go.
9. Streamline
Using eSigatures will streamline the execution of contracts in your business. How? A good eSignature app will give you the opportunity to sign documents on any platform, request and track signatures and adjust the security settings. Even better, you can sign a document at any time, which will fully automate your business’s document workflow.
10. Other key benefits of eSignatures
Other benefits of eSignatures include:
- It’s easy to use and has greater document management
- It’s a secure way of doing business — no need to stress about the legality of the eSignature tool
- Easy way of tracking progress on your legal agreements
- Both you and your customers and contractors will have a better user experience by using one signature platform
- It can be used effectively across countries
- A reliable way of doing business through the digital forms
- A faster way to seek payments for clients
How small businesses use eSignatures
After learning about the basics and benefits of electronic signatures, it’s time to move on to how businesses use eSignatures. Based on Lawpath’s internal data, here are the top legal documents that are signed electronically more than others.
1. Privacy Policy
Privacy policies outline how your business uses, stores, and collects your customers’ information. These documents are signed frequently by our customer base.
The eSignature is required in your business’s privacy policy if your business or company collects personal information data online or directly from your customers.
2. Contractor Agreement (Individual)
If you’re a small business owner, it’s almost guaranteed that you have hired a contractor to complete a task for your business at least once. The eSignature in Lawpath’s contractor agreement is frequently used, and for a good reason. The contract agreement is signed quite frequently by both parties involved in the agreement.
Your business’s profit can be affected if you delay signing these agreements. Therefore it’s important that you complete the process in a fast and secure way. This is where the benefits of eSignatures saves the day because it’s the quickest and more efficient way to get the agreement signed.
3. Employee Agreements
The most important piece of paperwork when hiring a new employee in a business is the employee agreement. Whether you hire a casual, part-time or full-time employee, an employment agreement is a legal necessity.
Hiring employees can be a tedious process involving a lot of paperwork. However, it doesn’t have to be this way if you use the eSignature too.
4. Non-disclosure agreements
Non-Disclosure Agreements (NDAs) are one of the most popular and versatile documents a business owner will use. Also known as a confidentiality agreement, an NDA will protect your interests. When it comes to using an NDA, signing it manually can cause inconveniences for you and the other parties involved compared to utilising an eSignature. Here are a few reasons why:
- As NDAs prohibit the use of disclosing important business information, having an eSignature will allow you to send the NDA to a vast number of people in one go rather than printing it manually for each employee or party
- Manual isn’t always safe as the physical document can get lost and lead to types of criminal activities.
- Using an eSignature to sign NDAs means that you can send and sign documents safely from your computer.
5. Loan Agreement
When you loan a significant amount of money, it’s a great idea to put it in writing. A Loan Agreement is especially essential if you’re loaning to someone you are unfamiliar with, as it can prevent misunderstandings by clearly setting down the terms of the loan.
This is where having an eSignature is the optimal solution. Lawpath users have used the eSignature for their loan agreement to:
- Have the key details and important provisions signed right away
- The eSignature tool allows you to save the important document online, so if any misunderstandings occur, as a business owner, you can get access to the document immediately.
- By using eSignature, with just one click, you can obtain the sign and finalise the deal.
- It’s quick and easy.
6. Employee onboarding
Hiring a new employee involves a lot of paperwork. For example, contract forms, enrolment benefits, automatic paycheck deposits, and more. Manually signing all those documents can take a long time.
However, you can save your time with eSignatures. With just one click of a button, you can ensure that all the signature work for the policies and legal documents involved in your employees’ onboarding and handbook is complete.
7. Work Health and Safety Policy (WHS)
Work health and safety laws regularly change, and because of this, the legal documents also require alterations to ensure compliance with NSW and Australian laws. However, with this comes new WHS policies, which will require re-signing from all your employees.
During such a change, you can face holdups if you require all your employees to sign documents manually. If you use an eSignature, this won’t be an issue.
8. Other key legal documents
Aside from the top common legal documents that eSigantures are used for, business owners also use the eSignature tool for other key business and legal documents. The benefits of eSignatures for such documents include:
1. Retail purposes
- Equipment hire agreement
- Loan agreement (With interest)
- Letter of employment agreement
- Sales contracts
2. Human resources
- Full-Time Employment Agreement (Long Form)
- Employee handbook
- The signing of timesheets
- Acknowledgement statements
- Tracking employee lifecycles
- Employee onboarding
3. Policy agreements
- Refund policy
- WHS Policy (Work Health and Safety)
- Privacy policy
- Acceptable use policy
4. Miscellaneous documents
- Used for multiple providers who need to provide signatures on the same document, e.g. Real estate transactions — leases, real estate contracts
- Government applications
- Healthcare applications
- Contracts – services and goods
- Intellectual property licensing
- Deeds and wills
How Lawpath Can Help (How To Create eSignatures)
Now that you understand what eSignature are and how they work, why not use eSignatures in your business to save money, manage risks and increase productivity?
The best part is that Lawpath has an eSignature tool that can help you ensign it, bind it and send it!
Our electronic signature solution is a safe, secure, and hassle-free way to sign documents online with just a few clicks. Why should you use Lawpaths eSignature to stay on top of all your business and legal needs? This is because:
- Our e-signature tool is a self-sign service – This means that you can sign and send unlimited documents whenever and from wherever you’d like.
- Unlimited signatures – You can ensign, send and track unlimited documents monthly.
- Binding legal documents – Lawpaths eSignature tool abides by the Electronic Transaction Act, meaning that all your contracts and documents are binding at the click of a button.
- Safety and security – With end-to-end encryption, all documents are stored in ISO-27001 certified data centres, protected by Australian data privacy laws. Audit trails provide time stamps for defensible proof of access, review, and signature.
- Seamless user experience – With Lawpath’s eSignature tool, co-signers don’t need to have a lawpath account to sign your document making Lawpath’s tool an efficient contract management system.
If you’re ready to take a step towards a more digital and seamless world, our eSignature tool will do this for your business.
Conclusion
As you can see, eSignature software can be by business owners across multiple business and legal documents.
The benefits of eSignatures are endless and businesses are taking advantage of the cost-effective and secure nature of the eSignature tool to complete their business requirements efficiently.
From understanding how they work to evaluating the legal and procedural benefits they provide in our post, why not use Lawpath’s eSignature tool today? Leave the hard work to us so you can focus more on accelerating growth in your business.
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