What is eSignature?
An eSignature, or electronic signature, is an electronic method of providing agreement with the content of a document. Like handwritten – or ‘wet’ signatures created with a pen, an electronic signature is a legal concept capturing the signatory's intent to be bound by the terms of the signed document.
The convenience of eSignature means that documents can be signed without printing, scanning or faxing. Just open the document on a PC, tablet, or mobile, review the document, and place your signature. Then, send it back digitally to the sender. It is easier, faster, and less expensive than signing with a pen.
How are accounting firms using eSignature?
Finance and accounting firms conduct high volumes of work requiring sign-off to move forward. Documents often require review, approval and transfer back to the appropriate person before being archived for future reference, accounting and audit purposes. A common problem occurs when paper documents sit in one department for days before moving to the next, and it can be difficult to keep track of progress.
Electronic signatures provide a simple, legally binding option to capture consent. Virtually any document requiring a signature process can benefit from the speed and traceability of eSignature, including employment contracts, NDAs, letters of consent, IRS Forms 8878 and 8879, asset purchase agreements, and power of attorney agreements.
How can firms benefit?
ESignature software allows accountants to easily send documents for electronic signature. Using eSignature eliminates the time it takes for clients to print PDFs, sign them, and then return them by fax or mail. Document signings can be complete within hours. Client engagements run smoothly, contracts and agreements are confirmed quickly and securely, and taxes and other forms filed more efficiently. Accountants can focus on client work instead of on tracking documents.
Is it legal?
Electronic Signature has been recognized by law in the United States since 1999, when the first states adopted the Uniform Electronic Transactions Act. The United States has a history of being a business-friendly environment.
In Canada, Electronic Signature has been recognized by law since 1999, with the passage of the Uniform Electronic Commerce Act. Canada also has a history of being an open, business-friendly, eSignature technology-neutral environment.
ESignatures, when combined with an audit trail, tamper-sealing, strong authentication and world-class security are more enforceable than wet signature because they are viewed as containing court-admissible evidence.
Is it secure?
Clients need to know that documents won’t be shared or stolen and that their signatures can’t be forged. Electronic Signature management lets accountants and clients send documents electronically, instead of leaving them sitting in the mail or on the fax machine. Secure authentication and data encryption help protect against fraud.
Is it proven…. and compliant with regulations?
ESignature technology was initially designed in the 1970s, and has been in commercial use for over 15 years. Docusign, a leading eSignature provider, meets the latest IRS regulations, ISO 27001 and SSAE 16 standards, as well as others. Read about Electronic Signature Guidance for Forms 8878 and 8879 on the IRS site.
Tips for selecting an eSignature solution
Consider the current workflow in your organization. Any document driven process involving review, revision, collaboration, and signature is an opportunity to automate with eSignature.
Check the electronic signature provider’s security methods. A strong system will include access control, data encryption, and an audit trail validating names, email addresses, IP addresses and other key facts about the e-signed document.
Used as a standalone application, eSignature may require some extra clicks (and time) in the process. If your firm uses a document management system, look for an eSignature application that integrates smoothly with that work environment. In Doc.It, for example, Advanced Forms Recognition (AFR) technology identifies, names, and organizes an unlimited number of document types. Documents in the work area can be easily selected, prepared for signature, and sent out to the client for signing – all from within the accountant’s regular workspace.
A step closer to a Paperless System
Doc.It
When combined with an effective document management and workflow system, eSignatures eliminate the risk of an important agreement being lost or overlooked, and accounting practices can operate digitally in a natural, organic way, freeing accountants’ time for business development and value-added services to clients.
Doc.It, a document management, workflow and portal solution for accounting firms, is presenting a product demo with Insightful Accountant on June 25, 2019 at 2:00 p.m. Eastern Time. Register for Optimizing Workflow and Document Management Efficiency here.