As an employee or business owner, you sign more than a couple of contracts each year. Thanks to technological evolution, digital contracts are steadily phasing out pen and paper contracts. That means you no longer have to sign contracts physically but can do it from your computer or smartphone.
Digital contracts are valid contracts, like your usual pen and paper contracts. The ESIGN Act of 2000 made electronic contracts, documents, and digital signatures legally recognized. The act allowed for electronic business agreements and transactions that were cheaper and much more convenient.
Digital signatures and electronic contracts have been a staple for most contract management systems. Most frontrunners in business use such systems to streamline their contract processes. What was quite novel only a decade ago is now gradually becoming the norm.
In this post, we’ll be highlighting some of the benefits of signing contracts electronically.
What Is an Electronic Signature?
An electronic signature is a coded message that is attached to an electronic document. You can think of this coded message as a unique digital fingerprint that associates the signer with an electronic document. In short, it’s a digital version of an ink signature.
All electronic signatures follow a specific format that the national governing body defines. This ensures high levels of security and uniformity across the board. Many companies these days no longer use pen and paper contracts and instead use digital contracts with electronic signatures.
Benefits of Signing Digital Contracts Electronically
Lots of companies have transitioned from paper contracts to digital contracts because of the many benefits the latter confer. Here are a few benefits of digital contracts over paper ones.
Since the entire contract process is done electronically, all concerned parties benefit from unmatched transparency. That’s because all electronic actions leave a digital trail that you can track.
Choosing a proper contract management system makes the entire process even more transparent. It does so by maintaining an accurate and real-time digital trail of the entire contract process. This information includes everything from redlining to other steps that led up to the contract signing.
You’ll also get to know all the parties involved in the contract and any comments about it. That means you suggest for alterations of segments of the contracts and know whether the other parties consent to it. It also means that no section of the comment can be changed without your knowledge or consent.
Faster Contract Speeds
The major benefit of digital contracts is that it makes the whole contract process move much faster. Most people miss out on huge business opportunities because of contract delays. The delays could be anything from bad weather leading to postal service delays or even misfiled contracts.
With digital contracts, such inconveniences are virtually non-existent. All concerned parties receive the contracts in an instant. After receiving their contracts, all they have to do is upend their electronic signatures, and it’s a done deal.
This is much faster than having to send contracts through the mail, or scanning and sending the contracts via email. These processes require multiple steps, and any hitch amongst the processes could delay the contract signing process.
If you want to streamline and hasten your contract process, then electronic contracts are the way to go. However, make sure you know how to sign a digital contract or at least know how to sign a pdf on Mac.
Better Compliance and Data Integrity
The legal or internal body that oversees the entire contract process is better placed for its duty with an electronic contract. The body can have better control over the contract process and be more consistent and systematic with the contract signing.
Before electronic contracts, the persons involved would sign the contract with no predefined order. With digital contracts, businesses and organizations can now follow a set protocol when signing contracts. This helps streamline the contract process and ensures that all parties understand their role in the contractual agreement.
Each step in the process can give an accurate record of the contract up to the final signing. The overseeing body can make sure that all steps comply with the regulations.
Businesses can save a bundle by embracing electronic contracts as opposed to physical contracts. The cost saving isn’t only in terms of supplies and inventory. Companies also save a bundle from the financial impact of gross mistakes during the contract process.
Signing mistakes are very common with paper contracts, and they have costly implications apart from the delays. Businesses and organizations save from not having to pay for such costly mistakes or any delays in sending out the contract. They also save from the logistical costs of having to get the contract to the concerned parties.
More Secure Than Paper Contracts
Anyone can tamper with paper contracts, and it’s very easy for them to fall into the wrong hands. That’s why cases of contract fraud with physical contracts are so rife. You can’t say the same about electronic contracts.
Digital contracts are protected by layers on layers of security. Before anyone can get to the contract, they first have to breach the company’s cybersecurity setup. After that, the hacker must get through the firewall and the software’s security.
Long story short, gaining access to an electronic contract, especially with a CMS, is extremely difficult. Plus, the contract management software takes note of even the slightest alteration. For unmatched security throughout the entire contract process, digital contracts are the way to go.
Improves Customer Service
With electronic contracts, you can furnish your customers with the necessary documents on time. This prevents any delay that may frustrate the customers and be detrimental to your business.
It makes it easier for you to render your services to your customers. Plus, in case of any questions, you can find all the information concerning the contract with ease.
Electronic Contracts Are the Future
In the information age, digital contracts are becoming the norm. With so many benefits, it’s clear to see why many businesses and organizations are transitioning to electronic contracts. Unless you want to be stuck in the past, you better start switching to electronic contracts ASAP.
Magazine articles are great, but they are nothing compared to electronic ones. For more informative reads on all matters business be sure to check out the other pieces on the site.