Electronic signatures for small business: tips, tools, and takeaways

To effectively manage operations, small businesses can use technology with features designed to streamline processes and reduce costs. Electronic signatures for small business use is one tech feature that’s become increasingly common, driving value for companies and customers alike.

An electronic signature, or e-signature, is any method used to record acceptance or approval within an electronic document or transaction. Although the terms digital signature and e-signature are often used interchangeably, they are not one in the same.

Continue learning: Digital signature vs electronic signature

This guide focuses on electronic signatures for small businesses, specifically. We’ll explain how e-signatures work, discuss best practices, and share tips for how to select the best software tool for your small business.

How electronic signatures work

With an e-signature solution, small businesses can streamline document and contract workflows by collecting signed documents digitally. This convenient and quick alternative to wet signature collection serves as proof that two or more parties have come to an legally-binding agreement.

The method for signing an electronic document depends on the tools used. Some solutions require an online account to sign a document. Others send an access link via text, email, or another electronic method. Clicking the link takes users directly to the document for review and signature. Depending on the solution, e-signatures can be captured in the following ways:

• Typing a name
• Drawing the signature with a finger on a keypad or with a mouse
• Uploading an image of a signature
• Checking a box or adding a symbol to signify acceptance
• Generating a digital signature created with encryption technology

Small businesses need cost-effective solutions to stand out in the market, so choose your e-signature software carefully. Ease of use, regulatory compliance, and price are all important factors to consider. With the right e-signature solution, your business can save money, operate more efficiently, and improve satisfaction with both internal and external processes.

Benefits of using electronic signatures for small businesses

Regardless of what industry your small business is in, e-signatures can provide a number of benefits:

1. Time and cost savings

E-signature technology speeds up document approvals, enhancing operations across multiple areas of your small business. This saves time and leads to smoother, more effective operations, translating to valuable cost savings. Forgoing paper documents also saves on printing and storage costs.

2. Enhanced security and compliance

Maintaining strong data security when using e-signatures helps protect against the consequences of a data breach and is typically required by law for businesses of all sizes.

Numerous federal, state, and local regulations mandate data security, and non-compliance can be financially disastrous. In 2024, the average cost of a data breach around the world was $4.88 million. It’s critical to choose an e-signature solution that meets all relevant regulatory requirements for your business.

3. Improved efficiency and workflows

Adopting an e-signature solution makes it quick and simple for clients and staff to sign documents, streamline workflows, and enhance your company’s overall efficiency. With simplified processes for collecting signatures, you and your team can spend less time on administrative tasks and more time on growing your business.

4. Lower environmental footprint

Adopting e-signatures can significantly reduce paper use, leading to a more sustainable and eco-friendly business.

5. Client and customer satisfaction

Using e-signatures with customers and clients saves time and makes it easier for them to work with your business. E-signature tools simplify the process of collecting necessary documents from business partners, improving these working relationships. Clients and customers will be more eager to collaborate if paper documents — which are less convenient and more difficult to manage — are not required for signatures.

Choosing the best electronic signature for small business software: key features

Accepting electronic signatures requires the right technology solutions, but what is the best e-signature software for small business? Consider the following features and capabilities when researching e-signature software:

Signature requests

Automatic requests for document signatures save time by eliminating manual work associated with this process. Signature requests can include a link that takes the recipient directly to the document. For added security, this link can be password protected and set to expire after a certain time period.

Frictionless workflows

Software solutions can eliminate unnecessary steps and transitions between tech applications by allowing signers to read and sign documents within a single platform. They can also automatically route the final copy back to the same folder as the original, keeping everything organized in one place.

Merging multiple documents

A tool that combines multiple documents into a single file makes it easy for signers to review and sign everything at once, saving them the time and frustration of clicking between multiple documents.

E-signature alerts

Automatic alerts eliminate the need for follow-ups, ensuring that no important signatures are missed. If signers forget about documents that still need to be signed, e-signature alerts can remind them over email or other methods of digital communication.

Bulk sending sequenced signing

These two features can significantly reduce the time spent coordinating and communicating with large groups involved in the signing process. A bulk-send feature enables you to send the same document to multiple recipients for signatures. Sequenced signing allows you to request signatures from a group of people in a specific order.

Security settings

To protect sensitive information, e-signature solutions must uphold a high standard of data security. Key security features should include:

• Encryption: Scrambles document information into code that is impossible for hackers to decipher. Hackers cannot decipher information when you use the highest level of encryption, 256-bit, even if accounts are breached.
• Password requirements: Prevents unauthorized parties from signing on someone else’s behalf or accessing sensitive data by requiring a password to sign a document.
• Access controls: Ensures only authorized users can access documents to provide e-signatures because you can adjust settings.
• Audit trails: Tracks progress and helps identify any suspicious activity with an automatic record of a document's access history.
• Blue ink signatures: Distinguishes an original signed document from a photocopy, helping prove authenticity in case of tampering.
• Expiration dates: Reduces available access points and the risk of unauthorized access to sensitive information.
• Built-in compliance: Protects your small businesses from data breaches and potential fines with E-signature solutions that are frequently updated to comply with data security regulations.

Best practices for using electronic signatures in small business

E-signature software is a valuable tool, but small businesses can run into issues without the right preparation and precautions. To help make the implementation of your new tech successful, consider the following best practices:

• Select the right solution for your business: Choose e-signature software that meets your needs and comes with all the features you need to maximize efficiency.
• Find a reputable technology vendor: Read reviews in order to select a vendor that will provide adequate support before, during, and after implementation. Quality customer service can maximize your technology's benefits.
• Prioritize security: Adopt a solution with security features outlined in the section above to protect sensitive data when documents are transmitted and stored. Be sure to have all necessary security settings enabled when collecting signatures electronically.
• Provide staff training: Equip staff with the resources needed to correctly collect e-signatures with your new technology. Encourage secure practices and provide guidelines, such as how often to change passwords and requirements for complex passwords.
• Authenticate signers: Use strong verification methods, like multi-factor authentication, to ensure that only authorized users can access and sign documents.
• Be transparent: Educate signers to understand the process and that e-signatures are legally binding.

Related read: Are electronic signatures legal?

Top e-signature use cases for small businesses

There are multiple ways that small businesses can save time with e-signature technology. Whether you're sending contracts, requesting approvals, or onboarding employees — e-signature technology can streamline processes for staff and clients. E-signature uses cases include:

• Contracts and agreements: Simplify signature collection for a variety of important small businesses documents, from lease agreements to sales contracts. This improves operational efficiency, helping small businesses keep up with larger competitors.
• Sales and purchase orders: Eliminate bottlenecks and improve cash flow by quickly collecting signatures on financial transaction documents. This helps small businesses reduce payment delays and keep operations running smoothly.
• HR documents and onboarding: Reduce administrative work for new hires and small business’ limited HR departments. This saves time and hassle for new employees and HR teams, boosting their satisfaction.
• Vendor and supplier agreements: Improve vendor satisfaction by making it easy for partners to quickly provide signed documents.Maintaining strong relationships with suppliers is essential for small business success.

Modernize your small business with e-signature software

Electronic signatures are an essential tool for modern business. By choosing the right software, your small business can save time and costs while enhancing security and compliance. Adopt e-signature technology to realize the many benefits across multiple departments and use cases, propelling your business forward.