How does an electronic signature function?
- Anushka Agarwal
- Feb 4
- 5 min read
A digital method of signing documents on a computer, smartphone, or other smart device is called an e-sign or e-signature. It’s an alternative for using pen and paper to accomplish the same thing.
To put it simply:
On a phone or computer, you open a document.
Your signature can be uploaded, typed, drawn, or clicked.
The content is marked as approved by the system.
E-signatures demonstrate intent and agreement just like traditional signatures, but they take place electronically.
A business that is looking to improve their operations by utilizing e-signature options will find that doing so provides significant advantages over the traditional methods of signing documents.
This e-Signature guide provides an overview of everything you need to know about e-Signatures, including how they work, why organisations utilise them, and how they will enable your organisation to operate more efficiently while working with the documents that you transact daily.
What “Electronic” Means in eSignature
The term "electronic" simply describes procedures that are performed on digital devices, such as computers, phones, or tablets, as opposed to paper.
When you sign electronically, the system keeps a track of:
Your identity (law recognized)
Your intention to sign
A timestamp and proof that the signed document hasn’t been altered
Businesses can trust and enforce agreements signed electronically because of this combination of verification, tracking, and record-keeping.
What Is an Electronic Signature?
Let’s take a closer look at what an eSignature is all about.
An eSignature is simply a way to formally agree to a document using your computer, tablet, or phone instead of using the traditional method of pen and paper.
Here’s how you can create an eSignature:
Typing your name: When you open a document on your computer, there will be a line or box for you to type your name as a signature. This is one form of eSignature.
Drawing your signature with either your finger or mouse: The document you’re working with has the capability for you to sign your name right on the page, either using your finger on your mobile device or using your mouse on your computer. This is also an eSignature.
Clicking a button: Most documents contain buttons for you to click to indicate your acceptance of the document. Clicking on the button is considered an electronic signature.
Using your saved signature image: You have previously drawn your signature and saved it as a file or image and are now uploading it to the document you want to sign. When using this method, you also have created an electronic signature.
All the methods listed above are legally valid eSignatures and qualify as authentic and legally binding signatures.
How companies use signatures
Conventional Business Paper Process
Imagine a supplier agreement in a company:
The contract is printed by a manager.
A team lead is given it to review.
It is sent to finance for approval.
Signs and legal reviews.
Lastly, the supplier signs a document.
Copies are manually filed.
This could take days, particularly if the person is remote or traveling. Delays result in a lot of paper files, missed deadlines, and stalled deals. Most of these barriers are removed by eSignatures.
Business Operations are Impacted by e-signatures
Signatures are required for many documents in businesses. Electronic signatures can be used as following in those cases:
Sale and Customer Contracts
When businesses send contracts, such as service agreements or project contracts, to customers or clients; customers sign electronically from the phone, tablet, or laptop. This enables faster deal closure without having to wait for printed signatures, even if customers are in different cities.
Vendor/Supplier Agreements
When a business works with a vendor or supplier; the company needs to establish formal agreements to create price, delivery, and service agreements; with e-signature, vendor/suppliers can send and receive contracts and agreements digitally, allowing a faster turnaround time and no need for physical mail or courier services.
HR Onboarding and Employment Documents
HR departments will often send new employees offer letters, employment contracts, policies, and benefit paperwork and get new employees signed digitally; employees can complete and return all employment paperwork digitally before they even start working remotely.
Finance/Approval
Accounting departments also have to obtain approval of invoices, purchase orders, expense reports, and budget requests; electronic signatures will allow managers to review and approve these types of documents electronically and decrease the time delays and improve the documentation process.
Legal and Compliance Documents
It's Common Practice for Businesses To Send Legal Documents Electronically. Many companies must sign documents such as Non-Disclosure Agreements (NDAs); Partnerships agreement; Licensing agreements and e-signatures provide a simple way for businesses to execute such legal documents with an electronic trail for auditing purposes regarding who signed when.
Customer Onboarding and other Forms
Some customers will be required to sign consent forms, liability waivers, or service agreements prior to using a service. An e-signature solution enables the customer to complete the onboarding process quickly and/or through an electronic platform. As a result, the customer has a better experience and faster turnaround time.
Government and Regulatory Agencies
Many businesses are able to submit application forms such as Permits, Tax documentation, and Compliance submissions to their respective levels of Government electronically. This allows businesses to communicate with Government systems without physically visiting a location or having to wait in long lines.
Healthcare and Patient Records
Healthcare facilities allow patients to electronically sign Consent Forms, Treatment Agreements, and Medical Release Documents. This process helps to expedite intake procedures for patients and provides protection of patient records.
eSignature Step-By-Step User Experience
The following are the steps to perform an e-signature through the eSignature platform
Access the document The customer or employee will click on a link or open the document via a secure portal/website and then access the document's main area.
Read and Review the Content Users now have the option to view and read through the agreement by scrolling through it.
Sign Here Users can see a clearly marked area that indicates where users will need to sign or initial.
Create your Signature option Users can create their signature using one of three methods:
by typing their name
drawing their signature manually through the use of either a mouse or a touchscreen
or by uploading a scanned image of their handwritten signature. After adding your signature, click to apply it.
Click on Sign Once users have created their signature, they can click on the "SIGN" button to apply it.
The user interface is designed to be user friendly, so even those who are not technologically savvy can easily utilize the eSignature feature to sign documents.
Business Benefits of Using eSignatures
By utilizing electronic signatures in place of paper-based ones, organizations will experience many changes, such as:
Faster Turnaround Times - The time required to print and mail documents will no longer be needed.
Built-in Complete Digital Audit Trails of each signature that was collected.
Remote Capable Workforce - Teams that may be working remotely or even off-site can sign from anywhere with access to the Internet.
Lower Chance of Losing Documents - All e-Signed documents will be retained electronically, and thus, can easily be accessed.
As a result of these advantages, all departments within a company (i.e., HR, Accounting, Legal, etc.) will be able to function better, improve overall workflow, and work more collaboratively with one another.
Conclusion
Electronic signatures allow businesses to replace the cumbersome method of using paper signatures with a much faster, more secure form of authentication via an electronic signature.
Using this method allows you to eliminate the need for printing documents and then scanning them again after you sign them.
Rather, it gives you a way to verify your identity as well as create an electronic audit trail that will help establish proof of your intentions when using an e-signature.
Most governments have recognised electronic signatures as a valid option for many different types of documents including contracts, employee human resource forms, financial documents and compliance documents.
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