By Rishi Kulkarni, CEO and Co-founder, Revv
If your business requires contracts and agreements in order to get paid, there may be no more horrifying fear than the loss of your contracts. Imagine, if your warehouse burns down with all of your forms and backups inside or a hurricane or tornado hits, scattering your files, then soaking and ruining them. A leaky pipe in a storage facility causes multiple filing cabinets worth of documents to mold and ruin. There are endless scenarios where paper files could be lost and cost your company a fortune in collectable sales.
Scenarios like this are much less common than they once were because most companies now use computerised backups. Computer backups of your files and signatures are a major improvement from the ‘I hope nothing bad happens’ system of years past, but it is far from perfect.
Modern, cloud based digital signature management tools are better than scanning and backing up paper files in every way. Here is a definitive list of the benefits of online electronic signature management.
None of the scenarios for losing files listed at the top are far fetched. If it is reasonable to assume that a fire could take out your paper files, isn’t it just as easy to see that happening with the computers the files are being backed up to? This can be helped by storing your hard copy files and the digital backups separately, but there are still scenarios where this might not be enough. In addition, there are many additional ways locally stored computerised files can be lost.
If your hard drive fails, either through wear and tear, or accidental erasure, all of your backups will be lost. In addition, it is not uncommon for companies to discard old computers when making upgrades. It is completely possible for an employment agreement or older long term sales contract to be discarded along with the computer.
By using a cloud based online system for storing your signatures, you are protected from this type of loss. Cloud servers have redundancy built into them, typically by storing multiple copies of data on opposite coasts or other continents. It is physically impossible for a computer failure to cause the loss of your cloud based files. That is the whole point of the cloud.
There is little debate that original hard copy documents will be the preferred option in contract disputes. A paper contract signed by both parties, ideally with witnesses, is hard to debate. Unfortunately, there are many complications to such a contract ever making it to court in the event of a dispute.
If your backup system is to scan and email documents, there are a few dangers. For one, it is fairly easy to change a scanned document, either with editing software or by making a change and scanning it again, replacing the original scan with the copy. This does not mean that a scanned document will not have legal heft, but a copy will never have as much weight as an original. That is why typically, when you sign important documents, all parties will sign multiple copies rather than making copies of a single signed form for everyone involved.
Unless your business is in empty airplane hangars (and probably not even then), you have a limited amount of space to store old files. Paper agreements can be very lengthy, and storing a lot of them for a long time guarantees you will eventually run out of space if you stay in business long enough.
Traditional methods of filing storage have guidelines for how long to store certain types of files, but even then, managing the timeline to schedule the destruction of those files is an extra burden. Add in the time spent organising and maintaining those paper files and the effort and cost of securely destroying the files when they are no longer legally necessary, and you may have added the equivalent of a full time employee (or more) to your employee pool. That is a lot of labor for something that you should not have to do.
Traditional contract signing is a strangely time consuming process. First, you have to schedule an hour or so that both parties can carve out of their days which may require advance planning for some folks. One of you probably has to drive to meet the other, taking up even more of your day. You sit in front of the other person and any witnesses you may have while you read over a potentially lengthy document.
After you do all that, you sign your name in a couple of places, watch them sign, then head out.
Someone then has to scan those documents and file the hard copies. That is a lot of time out of several people’s day to do something that only took a few minutes.
Compare the length of time involved for that with electronic signatures. With a cloud based eSigning service, you can create your contract and email it over to be signed. You are then able to go about your day and complete other tasks, rather than watching someone read over the contract. The signer is able to read the contract at their leisure, without the pressure of feeling someone stare at them while they read, and with the ability to take as long as they need.
While it may seem odd to talk about savings when discussing adding a service, the actual cost savings are obvious when you consider all the other reasons already mentioned. By switching to a cloud based electronic signature manager, you cut your expenses in every area of contract maintenance.
If you are doubtful, look at your business and consider how many tasks your team could complete in the time they are sitting with folks signing contracts. In most cases, that alone is enough to offset the minimal costs associated with an eSignature service. If your company is in sales, for example, how many extra sales could one salesperson make if they were given the time they spent last month sitting with clients while they signed contracts?
This does not even account for the productivity boost for your administrative support staff in filing and data entry. In addition to the labor savings, you are using substantially fewer office supplies like paper, ink, and file folders. Your need for printers goes down dramatically, and the power and usage contracts associated with large office equipment are reduced as well.
You will need less storage space, which translates to either more productive space or the ability to work from a smaller space. There is less risk of losing data, so you are better able to collect on all of your open contracts.