When it comes to e-commerce and digital business, trust is everything. To make sure buyers feel safe and secure when conducting business online, they need to trust the seller and the brand they are dealing with. While there are many security measures that internet retailers can employ to protect their customers’ data and prevent fraudulent transactions, the best way to protect your customers and your business alike is to implement digital signatures. The use of digital signatures is not just a security measure. It’s also a legally required practice by many accounting firms that is making its way into the modern accounting world. In this article, you will learn how accounting firms use digital signatures.
How Accouting Firms use Digital Signatures
1. Clearing backlogs of paperwork
Paperwork can be a burden for all businesses, especially accounting firms. However, using digital signatures can help you clear your backlog of paperwork and get it off to your clients, who are often waiting for that all-important tax return or financial statement. Here are some suggestions on how digital signatures can help you and your business:
- Digital signature software streamlines signing documents by allowing you and your client to sign online in seconds. Signing documents online is faster than printing, signing with a pen, scanning, and then emailing them back.
- Digital signature software allows users to sign any document type – PDFs, Microsoft Word docs, Excel spreadsheets – which means it’s easier to get all the documents signed quickly that need to be exchanged between an accountant and their clients.
- Using digital signatures allows accountants to send their documents at any time or night because it doesn’t rely on face-to-face meetings or couriers carrying paper around town.
2. Attracting the next generation of employees
Once you’ve taken the step to go digital, there are numerous ways in which you can make your firm a more appealing place to work. In particular, millennials and those entering the workforce now do not want to see paper in their offices. In addition, they expect that technology will be part of their everyday lives, including at work. You won’t have any trouble attracting new talent if your office has less paper and uses technology for many functions, such as signing documents.
Of course, there are other ways to attract young employees. Investing in a top-notch accounting software system is another example: you’ll find that young people entering the field have been using this type of software since college or even before that. They won’t find it challenging to learn the software that your firm uses—in fact, it’s often a selling point when deciding whether or not to accept an offer from a firm they’ve interviewed with!
3. Making the work environment greener
Paper was first introduced in the second century BC and used for business purposes as early as the late 1400s. Since then, paper has been used for essential work functions such as writing, printing, copying, and filing. Although paper is an invaluable tool that we use every day, it also causes numerous detrimental issues to your accounting firm. Paper is a major environmental concern: not only does it take trees to make paper—which involves chopping down trees or using resources to recycle old paper—but it also is not biodegradable and takes up a lot of space in landfills.
Another paper issue is that you need to store it somewhere at your office. The costs associated with storing massive amounts of paper documents can be astronomical: you need special storage rooms or file cabinets to hold all of your paperwork, which takes away valuable space in your office; you also have to pay employees to maintain those files, organize them and find them quickly when they’re needed. This eats up time and money and can be inefficient when an employee needs a document ASAP (especially for clients who are waiting on the results).
4. More opportunities to work remotely
You can work from home. You can work from a cafe, a coworking space, your client site, a hotel room, an airport lounge, a train car, and even the beach. But how do you get work done? As far as working remotely goes, digital signatures are key for CPAs.Digital signature software makes it easy to collect legally binding signatures from co-workers and clients wherever they might be. Remote working scenarios where digital signatures come in handy sign off on tax returns with a digital signature. Review final documents digitally: audit reports and financial statements or client contracts. Sign engagement letters with remote clients.
5. Eliminating paper consumption
This is a no-brainer. Digital signatures eliminate the need to print, scan, copy and fax documents. This saves you money on supplies and postage and reduces your carbon footprint by consuming fewer resources.
- Reducing costs
Think of how much you’ll save overtime on eliminating all those paper processes. You’ll save money in more ways than one—you won’t have to pay for printing, scanning, copying, mailing, or faxing expenses; it will be easier to secure physical records, and you can reduce errors due to misplacement or mishandling of documents that lead to noncompliance penalties and fines.
- Reducing errors
Since digital signature software automatically captures data from signed documents and stores that information in a centralized database, there are fewer opportunities for error when preparing reports or entering data into your accounting system. Either way, this process enhances accuracy so that you can avoid mistakes that could negatively impact your bottom line.
6. Reducing costs
There are many ways that digital signatures can help you reduce costs.
Here are six ways that they can do this:
For example, one accounting firm saved $5,000 per year by switching to digital signatures.
7. Streamlining collaboration between doffices across the country and around the world
Imagine working in New York City, but your office has an important client based in London. You can easily use digital signatures to collaborate with them through email and other electronic methods. Plus, the benefits of using a digital signature don’t stop at a physical distance.
Legal rules around signatures vary depending on the country, but many have accepted digital signatures as legally binding (although some countries require specific security measures). In the United States, for example, they are considered legal if they meet four criteria:
- The intent to sign must be present
- The signature must be attributable to one person
- The signature process must be reliable
- The document containing the signature should not have changed since it was signed
8. More efficient client interactions
Digital signatures can improve client interactions in a variety of ways. For example, digital signatures make it easier for clients to sign documents. This is because the client can sign from anywhere, on any device, using any method that suits them. Since the client accesses and signs the document online, there’s no need to print, mail, or scan and send back anything. The process is entirely online, making it faster and more convenient for everyone involved.
Clients can also view their account in real-time to see who has signed a document and who is yet to sign—so they’re always up-to-date on where things stand with their documents. You can even set reminders to know when you need to follow up with a client who hasn’t signed yet.
9. Improved accuracy and efficiency in billing
Digital signatures can help improve accuracy and efficiency in billing. No matter what type of accounting firm you’re running, there will always be a need to bill clients for services rendered, whether on a project basis or via monthly retainers. If your firm is like most others, you’re probably still doing this manually with printed invoices.
Although this method may have served you well in the past, it’s not likely going to get the job done in the future. As your business grows and takes on new clients, you’ll find yourself bogged down in paperwork and struggling to stay on top of things.
By switching from old-school paper invoicing methods to e-invoicing with digital signatures, you can eliminate errors and reduce the time it takes for your team to handle billing tasks. This will allow your staff members more time for performing other important work such as bookkeeping and tax preparation services that will grow your business even more.
10. Improved security and compliance measures
- Digital signatures are the most secure digital signature on the market while complying with international standards.
- Electronic signatures such as DocuSign and EchoSign are not considered true electronic signatures. The digital signature is the only legally binding electronic signature according to all laws in every state of the United States and some international laws.
- The digital signature is also compliant with eIDAS, which stands for “electronic identification authentication services” and is a set of directives that define specific requirements for trust within European Union member states which have adopted this standard.
11. Increased mobility and flexibility for staff members who travel frequently or prefer to work remotely
Increasing mobility and flexibility for staff members is another benefit that accounting firms gain by using digital signatures. They are not only convenient, but they also provide unparalleled security. Because they can be used anywhere, your staff no longer needs to be in the office to get documents signed. This means that they can work remotely or while traveling, which can greatly improve work-life balance and productivity. In addition, digital signatures are platform-independent so that they can be used on any device with an internet connection.
This means you will no longer have to deal with the inconvenience of printing documents and having them wet signed before scanning and emailing them back to the office for storage. You will save money on paper and ink as well as reduce your carbon footprint by moving toward a more paperless system.
Digital signatures are ubiquitous in the accounting world, and accounting firms use them to provide secure transactions between clients and their accountants. Digital signatures are important in accounting because they allow firms to operate securely. If the receiver does not verify a digital signature, the transaction is not valid and will be declined by the receiver. Therefore, financial firms need to use strong digital signatures. Digital signatures are used for a variety of purposes in the accounting world. In fact, digital signatures are so important in accounting that firms may not be able to operate without them.