What is an electronic signature? – Forbes Advisor


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Electronic signatures, or e-signatures, allow us to sign legally binding contracts online without printing paper or picking up a pen. They are more convenient than a traditional signature, saving time and postage costs as they can be used to sign documents remotely, making recipient location irrelevant and results almost instantaneous. In turn, it’s easy to see why electronic signatures have become a staple for many small businesses.

What is an electronic signature?

Simply put, an electronic signature is just that: a signature in electronic form. It allows signers to approve or accept the terms of a document, just like with handwritten signatures. An electronic signature is basically a process that uses computers to authenticate the signer and certify the integrity of the document.

Digital signatures are a type of electronic signature that uses complex algorithms, Certificate Authorities (CAs), and Trust Service Providers (TSPs) to authenticate the signer as well as document integrity.

Electronics Vs. Digital Signatures: The Subtle Difference

The difference between an electronic signature and a digital signature is subtle for anyone sending or signing a document. However, they are not so subtle for auditors, compliance officers, judges and regulators. An electronic signature is a general term for any signature transmitted electronically, whether it is a signature written digitally on a document or a signature generated via an electronic document signing service such as DocuSign. Digital signatures are a kind of electronic signature with advanced features that keep them compliant and secure.

Standard electronic signatures may be suitable for agreements and approvals where security and compliance standards are lax. Think of situations where a human resources professional needs to approve an employee’s vacation. An electronic signature can be perfect for internal use.

However, when you are dealing with processes with intense security standards and rigorous compliance standards, a digital signature is what you need. Simply put, digital signatures are a subset of electronic signatures that have specialized functionality that lends itself better to industries such as law and healthcare. Digital signatures come with audit trail, encryption, and other core tools to ensure the authenticity of the signature. These are popular for contracts, tax documents, insurance forms, etc.

Like a regular signature but better

Electronic signatures are superior to their ink-based ancestors. They’re instant, portable, legally binding, and they reduce our damage to the environment. And they’re often backed by technology that guarantees the authenticity of the signature.

Instant, convenient, foolproof

Electronic signatures speed up approvals and agreements by eliminating downtime from the process. With e-signatures, you don’t have to wait for the courier or get in your car to drop off documents. The moment you apply your electronic signature to a document is when you can move on to the next step.

Electronic signatures also make it easier to sign documents. Because e-signature solutions are so portable, you can sign or request signatures from virtually anywhere in the world, using the device you prefer. You don’t need to print, sign, scan, then resubmit your document, and you don’t need to own a fax machine just to send and receive signed documents.

And since many e-signature solutions won’t let you submit a document until every signature field is filled in, you don’t have to worry about small mistakes turning into big problems.

Legally binding

Electronic signatures are as legally binding as their ink-based counterparts. In 2000, the United States passed the E-Sign Act, which legally defines what an electronic signature is and gives such electronic signatures the same legal authority as a handwritten signature. Almost all states have also adopted the Uniform Electronic Transactions ACT (UETA) allowing electronic signatures. Certain types of documents, such as wills, cannot be signed electronically.


Having to print, scan and fax just to make an electronic signature is not only time consuming and boring. It’s also bad for the environment. Every device you buy increases your overall carbon footprint. The more devices you can remove from the equation, the better your workflow is for the planet. The same goes for any trees that need to be cut for the paper you print for your paper documents.

Use of electronic signatures

There is no one way to do an electronic signature. The specifics depend on the electronic signature method you use. But in general, they mostly work the same way. When you seek someone’s approval or agreement, you share your document, define the areas that require a signature, and send the document to the other party. It’s even easier when you’re the signer: just open the document, sign all the required fields, then submit.

Electronic signatures in Microsoft Word

Sometimes you may want to add an electronic signature to a Word document. This is fine for inconsequential use of your signature, such as in a cover letter or memo. And doing this is quite easy. You can sign a blank page of paper and run it through your scanner or open Microsoft Paint and draw your signature electronically. From there, it’s a matter of saving your image, pasting it into Word, and sizing it appropriately. The process works very similarly if you also use Google Docs.

But you don’t want to use Word files as a medium for signing most documents. Anyone can edit the rest of the content of this document before adding their signature. If you have a contract or tax documents, for example, you need to convert that Word document to PDF and then use your e-signature solution of choice to sign or request a signature.

Frequently Asked Questions (FAQ)

Are electronic signatures legally binding outside the United States?

Electronic signatures are legally binding in most countries outside of the United States, including Canada, China, Russia, Japan, and dozens more. Although there are subtle nuances between the laws of each country, they are generally the same. You should consult legal experts before using electronic signatures internationally.

Are electronic signatures secure?

Electronic signatures are secure, and arguably more secure than handwritten signatures. Anyone can learn to copy someone else’s signature with enough time and practice. Moreover, it is difficult for the average human to verify whether or not a signature has been made by the signer or not. Electronic signature software, however, is secured with sophisticated cryptographic algorithms to prevent tampering and maintains an audit trail to settle disputes.

Is electronic signature technology right for me?

If you find yourself signing a document or requesting signatures several times a day, you should consider an electronic signature. Not only is it faster and easier, but many e-signature apps provide you with templates to streamline document processes, ways to track all your documents, and tools to make sure every field in a document is signed. .


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