Electronic Signatures: The Next Step in Contract Management
All business deals need to be formalized with a contract. Increased outsourcing has resulted in every business having to keep track of many contracts. As managing paper contracts takes up time and space, many businesses have moved to digitally managing contracts. Cloud computing or Software as a Service (SaaS) models have dramatically brought down the costs of digital contract management. Storage and retrieval of contracts is faster when they are digitally stored. Important dates such as scheduled delivery dates or the contract renewals, can be flagged, so that the appropriate person receives a reminder.
Despite all its advantages digital contract management has a few drawbacks. Unlike paper contracts where each draft is signed by the person proposing the change and countersigned by the person accepting it, digital documents were difficult to authenticate. The next logical step in the evolution of contract management systems was setting the appropriate legal and technological setting for the implementation of a robust electronic signature solution.
Electronic Signatures are Now Legally Binding
Until the Electronic Signatures in Global and National Commerce Act (E-SIGN Act) was passed, the final contract had to be printed, signed, shipped, faxed, and filed in paper format. As long as only the paper document could be signed by representatives of the various companies involved in the deal, businesses had no option but to use paper contracts. Each step requires time and money. These delays can seriously impact the competitiveness of businesses.
Now that electronic signatures are legal and binding on all the parties involved, it makes sound business sense to speed up the contract finalizing phase by adopting electronic signatures.
Electronic Signature Software Speeds Up Negotiations
When documents are mailed in electronic format there is always the danger that the changes proposed have not come from the authorized negotiator of the other company. Lack of authentication features slowed down the acceptance of digital contracts.
Contract management software that has embedded software to support digital signatures can speed up the contract writing process tremendously. A digital signature is valid for the life of the contract, enabling all parties concerned to do away with paper work. Negotiations are faster as each step is authenticated by using the e-mail ID of the sender. A secure way to proceed with the negotiations using an electronic record of the path the negotiations have taken helps all executives keep track of issues that are important to them.
Digital transfer of contracts can also be more secure than shipping paper if proper encryption and authentication procedures are followed. Electronic signatures add to the security of the proceedings.
The complete on-demand e-signature enabler ensures that businesses can create and manage documents internally until the negotiations are complete. With this feature negotiation time is dramatically reduced as business leaders and their lawyers can all study the documents within a short span of time even if they are geographically far away from each other.
Be Business Smart and Leap Across Your Competition
Conducting a business successfully in today’s challenging conditions requires many supporting tools. The global nature of most businesses and the economic downturn pose special hurdles to the businessperson. While businesses source and supply a variety of products from and to distant markets, costs need to be kept at minimal levels to remain profitable. Increasing competition adds to the complexity of business deals as any delays can turn your customer toward a competitor that has moved faster.
By utilizing cloud-based contract management systems that incorporate electronic signatures, a business benefits in multiple ways. The speed of the negotiations ensures that customers are not lost to quicker competition. You can get the deal signed before your competition is aware of the negotiations!
Takeaway
Embedded electronic signature software ensures that businesses can benefit from the lower cost of contract management services without worrying about any security issues.
