All About E-Signatures: The Dos, Don’ts and Best Software for SMBs

When it comes to managing contracts and other signed documents, more small businesses are moving to electronic signatures (“e-signatures”)—allowing people to sign digitally over a computer rather than printing out pages and signing with ink.

Steven Rothberg, founder of the website College Recruiter, says using the digital signature software PandaDoc has cut time out of his Minneapolis-based company’s sales contract process. “The faster contracting has resulted in huge time savings, both on the sales and implementation sides,” Rothberg says.

Lisa Hagendorf, founder of Centerpiece Public Relations in Parkland, Florida, uses HelloSign and finds e-signatures help with record keeping and tracking a contract’s status. “I like how the transactions are time-stamped, from the time it is sent, viewed, countersigned, and fully executed, and then stored immediately in a single centralized location,” she says.

While electronic signing can offer many benefits, it’s important to use it wisely. Here are some dos and don’ts:

DO:

Trust it

Digital signatures are just as good as pen-and-ink signatures. ESIGN, the federal law passed in 2000 governing electronic signatures, states that a contract’s validity can’t be denied just because it was digitally signed.

Get consent

The ESIGN legislation expressly requires obtaining consent from the signer ahead of time. When you have signers draw signatures in a box, type their names or check a box, that’s enough to show that they know they’re signing. You can also include in the document being signed a clause stating all parties agree to do the transaction electronically.

Send securely

You should do all you can to ensure the correct person is e-signing the document. You can do this by emailing the signer a secure link to the document that was created by the electronic signature software.

DON’T:

Use it for everything

A best practices guide from electronic signature software maker DocuSign recommends against digital signatures on wills, court orders, divorce papers, eviction and foreclosure notices and certain other types of documents.

Neglect to send signers a copy

Document signers will likely want a copy of the signed document. The signature software you use will likely do this automatically, but it’s important to check.

Make it the only option

Give customers the option to sign with pen and paper. People may be uncomfortable with digital signatures or lack the proper technology.

Choosing e-signature software

To find the right electronic signature software for your business, compare pricing, the number of documents that can be signed per month or year, and features such as the ability to custom-brand the software, integrate with payment platforms and use a mobile phone to sign. Here are some popular choices:

DocuSign is the pioneer in electronic signatures and has SMB plans that start as low as $10 per month per person and allow signing up to five documents per month.

Adobe Sign, the digital signature software of the people who brought us Photoshop and other document management tools has SMB plans starting at $10 per month per user that integrate with popular Microsoft Outlook, Word or PowerPoint.

PandaDoc has business plans starting at $15 per user per month for up to 50 documents a year that allow custom branding.

HelloSign has a free plan for individuals signing up to three documents a month. Its Pro plan for $123 monthly allows unlimited document signatures.