If your company uses contracts, orders and invoices, statements of work, and other documentation that require an official signature, it used to be simple to get approval from someone with signing authority. Slide the paperwork across the desk, watch the individual sign on the dotted line, and you had a legally-binding document signed, sealed and delivered right before your eyes.

Now, with more businesses using email and the Internet to communicate and to create agreements, many companies are looking for ways to bring signatures into the digital age. It may be time to consider switching from paper documents or faxed copies to electronic documents that use digital signatures.

Electronic signature software can provide numerous advantages, including speed and convenience. However, to assure the legality of documents signed electronically, the software you choose must meet certain requirements set forth by the Federal ESIGN Act of 2000. Some of the most popular E-signature software applications are DocuSign®, Adobe® Document Cloud® and Right Signature®, but you can find many more options by searching the Web. Here are some suggestions to help you choose an application that works for your company:

Choose digital signature software that employs public key infrastructure (PKI), which locks down a document, preventing unwarranted and unwelcome changes.

PKI includes:

1.     A certificate authority (CA) that encrypts and verifies that a signature is accurate;

2.     A registration authority (RA) – a neutral third party that verifies the certificate authority before delivery of the document for electronic signing;

3.     A public directory in which certificates, including CA and RA authentication, are stored;

4.     An in-house certificate management system.

When choosing an electronic signature application, make sure all four elements are built in. Otherwise, the document may not be legally binding, and it may be subject to hacker attacks that can change a contract or alter terms of other business documents.

Make sure the digital signature software you choose is capable of locking all formats of documentation. Some digital signature software only handles PDF (portable document file) documents, or documents created using Microsoft® Word®.  Choose software that also enables signatories to sign documents created in other applications, such as spreadsheets or PowerPoint® presentations.  Also, choose electronic signature software that works on documents created using both Microsoft Office®’s programs and Apple®’s document preparation applications.

Choose electronic signature software that recognizes graphical signatures and provides the flexibility to accept initials and other indications of document acceptance and approval. In some cases, more than one signature is required on a document. Make sure the electronic signature software you choose doesn’t lock out a second or third signer if your contracts and other paperwork require multiple signatures.

Choose simplicity in electronic signature software. If creating a signable document requires a member of the company IT department to assist you (or your client), it’s going to lower productivity.  Choose easy, one-click software that enables your company representative to sign a document, and equips the client-signer to add a simple signature even though that signer doesn’t use the same electronic signature software used by your company.

Choose electronic signature software that’s compliant with industry standards. An example? A pharmaceutical company must use an electronic signature application that’s compliant with the federal government’s Food and Drug Administration (FDA) regulations, which are more detailed and stringent than other industries.

Finally, determine the total cost of the software you select. Consider the following costs when comparison shopping for the right electronic signature software for your business:

o   The initial purchase price of the software application

o   Digital certification, which may require an annual fee be paid to the software developer

o   Per-signature fees

o   Cost of additional upgrades and plug-ins required to create software that’s compatible with your current system

o   The cost of installing software and protecting it from intrusions and malware

o   The cost of help desk support for clients who are unfamiliar with the software you’ve chosen

Your client may be halfway around the globe, but electronic signature software can give you peace of mind that their signature is legitimate and that your document is secure.


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.