What is an electronic signature?

Using electronic signatures to approve and sign documents is quickly becoming standard practice.

Companies and individuals are slowly eliminating the time-consuming process of printing, hand-signing, and scanning documents. Instead, they’re digitally adding their signature directly to documents with only a few clicks.

However, the fast adoption of electronic signatures raises questions.

What exactly is an electronic signature?

Does an electronic signature differ from a digital signature?

Which are the best tools to adopt an electronic signature process?

In this article, we’ll quickly answer these and soon you’ll have a complete understanding of what electronic signatures are, how they work, and how to use them.

What is an electronic signature?

An electronic signature is any digital mark affixed to the end of a document – a quote, contract, proposal, invoice, etc. – to signify approval. This digital mark can be an image, hand-typed text, or even handwritten using a touch screen.

Whenever you sign for a package on a touch screen or insert a scanned image of your signature into a document, you’re making an electronic signature. Nowadays, many proposals and contracts are created using specific software that allows senders to add signature fields to documents and permits recipients to type in their name easily.

Not all electronic signatures offer the same level of security. An image of a signature inserted into a Microsoft Word document, for example, is less secure than a signature created using an app like PandaDoc, which automatically generates a certificate containing the time and date the signature was completed.

What’s the difference between electronic and digital signatures?

Many people confuse the terms “electronic signature” and “digital signature” thinking they are the same when in fact they are significantly different.

Digital signatures are complex and are a highly secure type of advanced electronic signature. The use of digital signatures requires specific software and the signee must obtain a certificate from an accredited organization called a “Certificate Authority.” They must also first confirm their identity before a certificate is given.

In a nutshell, once somebody obtains a digital signature certificate (which is stored on their computer), they can add it an encrypted format to the document being signed. This encrypted “key” is then verified against a public “key.” There are numerous levels of encryption involved, including the creation of an encrypted electronic document, and the system is underpinned by a technology called the Public Key Infrastructure (PKI).

Are electronic signatures legal and secure?

Yes, electronic signatures are completely legal. Numerous pieces of legislation (in both Europe and the United States) grant electronic signatures the same credibility as handwritten signatures.

Those legislations include:

  • ESIGN (The Electronic Signature in Global and National Commerce Act),
  • UETA (The Uniform Electronic Transactions Act),
  • eIDAS in the European Union.

Click below to learn more about the documents you can sign with eSignatures in your country:

Furthermore, because electronic signatures almost always involve a digital paper trail, often with numerous certificates attached, they are also fully secure. In most cases, electronic signatures are far easier to verify than traditional pen-and-ink signatures.

What are some of the best tools to capture eSignatures?

There are numerous eSignature tools on the market. They add an extra layer of security to the signing process and also allow you to use digital signatures.

Our top three eSign solution picks are:

  • PandaDoc – Fully paperless proposal software that includes electronic signature functionality.
  • DocuSign – The market leader with a comprehensive set of electronic signature tools.
  • Adobe Sign – The original inventors of digital signatures.

How to add eSignatures in PandaDoc

Adding an electronic signature to a document in PandaDoc is very simple. You can add signature fields for yourself and your document recipient.

Just follow the steps below:

  1. Log into PandaDoc and select “New Document“.
  2. Select the Upload tab and either drag-and-drop the file you wish to sign or click the Choose A Local File button.
  3. If you are already editing a document in PandaDoc, open the Documents tab in the left-hand toolbar and open your document.
  4. Once the document is open, drag-and-drop the Signature field from the Fields tab.
  5. Position the field in your desired place and click on it to open the signature dialogue box.
  6. Assign a recipient (if you are signing, this will be you).
  7. If you are signing the document, click again on the signature box and insert your signature.
  8. Click Complete. You now have the option to either send the document with PandaDoc or download it in your preferred format.

Conclusion

Electronic signatures are here to stay. Businesses of all sizes understand the time-saving benefits of using them. The big question is whether or not they should opt for the simple functionality of PDF and Word documents or a comprehensive electronic signature solution.

“Smart” apps have an array of features that make them preferable to basic tools. These apps provide extra protection for simple electronic signatures, allow companies to take advantage of digital signatures easily, and come with tracking and storage tools. What’s more, they integrate seamlessly with your existing tech stack.

If you’d like to give a smart app a free test drive, you can sign up for PandaDoc here.