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Why Use E-Signatures?

Contract Management Software

The Electronic Signatures in Global and National Commerce Act (E-Sign Act) was signed into law in 2000. The E-Sign Act ensures that electronic signatures are as legally binding as the traditional, pen-and-paper version. But is it the right alternative for your organization’s contracts? In most cases, yes! Opting for e-signatures can have multiple positive effects on how an organization processes contracts.


One of the primary factors that cause contract delays is time lost coordinating signatures. This can happen at various points in the contract lifecycle: during negotiation, when approving updates or amendments, in the event that different parties are incorporated into a contract, and so on. Sending a paper contract must be done by postal mail, fax, or personal delivery by a representative of one of the parties. Any of these processes are more time-consuming than communicating electronically, sometimes by multiple days. Multiply by the number of back-and-forth interactions that take place before the contract is finalized, and the old-fashioned approach can add substantial time to the approval timeline.

Using an electronic method to communicate, review, and sign contracts makes essential information available to all parties immediately. This may result in organizations having increased ability to take advantage of opportunities for a quick turnaround.

Location Flexibility

Besides the issue of time needed to transfer paper contracts back and forth for signing, an additional timing factor to consider is vacation or other travel time. If an organization sends a contract when the decision-maker for the other party is at a conference, it may take even longer to get materials signed. E-signatures eliminate the necessity for signees to be in a particular geographic place. As long as they have Internet, they can access contracts on the go. An executive at a conference (or even checking in briefly while on vacation) can sign as easily as in the office.


Maintaining adequate security measures helps protect organizations from leaking proprietary information, failing to meet compliance standards, or incurring other risks. While your organization may have clear, well-organized security processes in place, it’s difficult to guarantee that another party upholds the same standards.

Enhanced security is an important benefit of contract lifecycle management software. Paper files in a traditional filing cabinet are easy for almost anyone to access. Secure software tracks which users open, download, or update files. Admins can even restrict a user’s access to view only the files that affect that person directly. An organization can fulfill legal requirements to make the signed contract available for the signing parties’ records, while also storing sensitive documents in a secure format.

Starting off a new contract relationship using electronic communication, including e-signatures, can make it more seamless to manage the entire contract lifecycle using secure software that minimizes risk for all parties.

Cost Savings

Many organizations opt for electronic signatures in hopes of reducing costs. Materials may not appear particularly costly, but an organization that manages thousands, or tens of thousands, of contracts faces significant costs. E-signature use significantly reduces these contract expenses:

  • Paper
  • Copier wear and tear
  • Shipping costs
  • Packaging materials
  • Hours logged by administrative assistants

Efficiency and Productivity

In addition to the work hours and materials costs saved with e-signatures, an organization may experience increased efficiency in contract operations. Reducing the copying, faxing, traveling, and locating lost documents associated with paper contracts frees up a substantial amount of time. Employees may have more freedom to concentrate on more valuable tasks than transferring documents from one location to another.

It can be difficult to capture the full ROI of improving workplace efficiency. Increased ability to pursue higher-value opportunities, higher day-to-day productivity, and improved employee morale might all follow when an organization streamlines contract management.

Lowered Risk of Human Error

The E-Sign Act states that electronic signatures are as legally valid as traditional signatures. In practice, e-signatures may be a lower-risk form of contract signing, due to the added security measures in contract management software.

One advantage is that e-signatures may make it easier in some instances to verify the signee’s identity. Obviously, meeting in person (preferably with IDs in hand) is an undeniable gold standard, but arranging these meetings can be onerous. Signing faxed or mailed documents, on the other hand, is somewhat shakier territory. A contract management software system that uses robust user verification helps ensure that the designated signee is the one who handled and signed the documents.

Another benefit of e-signatures is that electronic contracts don’t shuffle. Complex contracts can be enormous. Misfile one page, and the entire contract can be in jeopardy. Electronic contracts don’t slip out of someone’s arms and spill on the floor. A critical page doesn’t get wedged into a corner of the shipping box and accidentally tossed in the trash. The file’s just there, ready when you need it.

Environmentally Friendly

Caring for the planet may or may not make a difference to a company’s bottom line. But many companies find value in adopting some environmentally friendly measures. Going green may tie in with brand values or contribute toward positive customer relationships. In the case of e-signatures, as shown earlier, organizations also stand to save costs on various materials. If switching to electronic signatures presents an opportunity to save time and money, improve workplace efficiency, and take a step towards environmental sustainability, organizations may be able to take several positive steps forward at once.

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