Sign smart: seven best practices to implement electronic signatures in your company

Let’s look at the seven best practices for electronic signatures that you can incorporate into your document workflows. Whether new to electronic signatures or using them for a while, these tips will help you get the most out of your e-signatures.

Seven best practices for using electronic signatures are:

1. Ensure compliance with legal requirements
2. Maintain an audit trail
3. Provide flexible signing options
4. Implement strong authentication methods
5. Educate signers and stakeholders
6. Ensure compliance with legal requirements
7. Chose a reliable and secure partner

1. Ensure compliance with legal requirements

The most crucial aspect is to use a CLM or e-Signature software compliant with applicable laws and regulations. The European Union (EU), UK, USA, Canada, and other countries have specific laws that deal with e-Signatures. Understand, research, and incorporate them in your s-Signatures.

• eIDAS Regulation in EU: The eIDAS Regulation sets the standards for electronic signatures, trust services, and electronic transaction management in the European Union. eIDAS certification provides the necessary checks and balances to ensure the signatory’s identity is verified and trustworthy. With eIDAS, you can integrate new users in just one click and benefit from new digital identification mechanisms, making your business more efficient and cost-effective.
• E-SIGN Act: If you are doing business with or in the US, ESIGN Act and Uniform Electronic Transactions Act (UETA) sets rules to ensure your electronic signatures and records are legally valid. These include (i) the intent to sign, (ii) consent to do business electronically, (iii) the association of signature with the record, and (iv) record retention.

2. Maintain an audit trail

Maintaining a proper audit trail for your e-Signature usage is crucial because it helps ensure the integrity and legality of your agreements. There are several reasons to have a good audit trail:

• Ensures legal compliance, as many laws require that electronic signatures be attributable and tamper-evident
• You can see who signed the document when they did it, and if they made any changes after signing.
• It helps everyone involved understand their roles and responsibilities better. It makes it clear who has approved and signed the document.

To ensure everything is in line, you can ask someone on your team to regularly check the e-signature logs and ensure everything follows company and industry rules. It also helps you spot any problems and fix them to improve the process!

3. Provide flexible signing options.

You can make the signing process dynamic, adaptable, and efficient by offering options such as e-signature software, biometric signature tools, or traditional pen-and-paper methods.

Just like some people prefer to sign with a pen on paper, others prefer to use a stylus on a tablet or even their finger on a touchscreen. So, it’s essential to provide multiple signing methods to your counterparties to ensure they can sign in a way that suits their needs.

E-Signature Options:

• Typing in a signature
• Uploading an image of a signature
• A stylus or finger to sign on a touchscreen
• A digital signature certificate
• Third-party signature service
• Secure electronic signature device or hardware token

4. Implement strong authentication measures

When using electronic signatures, it’s vital to implement strong authentication measures. It means using multiple methods to verify a person’s identity. Vendors have three categories of authentication methods. (1) You can have something you may know, like passwords or one-time passwords (OTP). (2) Another one is something you possess and you can use it to verify identity, such as smart cards or government-issued IDs. (3) And finally, there’s something you are, like facial recognition or biometrics.

By combining these approaches and considering contextual information, like location or device, organizations can ensure the security and integrity of electronic signature processes, protecting against unauthorized access and enhancing overall safety.

5. Educate signers and stakeholders

Another best practice is to provide regular training sessions or workshops (often conducted by your CLM vendor). It can help your employees learn about the legal requirements, technical aspects, and best practices of using electronic signatures.

It leads to increased efficiency, faster execution of agreements, and reduced risk of legal and compliance issues. Proper training also ensures that your employees are confident in using the electronic signature platform, which can help to promote its adoption and usage across the organization.

6. Have written policies & procedures

You may create clear policies and procedures for using electronic signatures, defining the following.

• Who can sign documents?
• What types of documents can they sign electronically?
• Verification methods for confirming the signer’s identity

For instance, one of the policies could be that only employees with appropriate permissions can sign documents using electronic signatures. You can also identify the contracts, agreements, and other legally binding documents that may be signed electronically.

Another policy is that signers must verify their identity using a unique username and password or biometric authentication method, and the system must maintain an audit trail of all electronic signature transactions.

7. Choose a reliable and secure partner

A reliable tech vendor guarantees the safety of your sensitive documents and protects against data breaches. A trusted partner ensures uninterrupted service, minimizing disruptions to your workflows. Plus, it helps you comply with legal regulations, avoiding risks and penalties. And let’s not forget about the invaluable customer support they provide, ensuring a seamless experience for you and your team.

For a detailed overview of the benefits of using Electronic Signatures, please read “Signed, Sealed, Delivered: Five Benefits of Electronic Signatures“

Takeaway

You need more than just the shiniest tool to modernise your document workflows.

It helps to understand the best practices underpinning the electronic signature processes. The good thing is that Docfield bakes in all the best practices we discussed above. You automatically comply with the above best practices once you sign documents and contracts using Docfield.