What are Digital Signatures and How Do Companies Use Them

by May 16, 2022Blog, Contracts & Signatures, Solutions

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Digital signatures are a type of authentication that uses cryptography to prove the identity of a user while simultaneously ensuring confidentiality. Digital signatures are also used to verify that the sender of a document was the original author and has not been altered during transmission. There are different types of digital signatures, but this article will primarily focus on public key infrastructure digital signatures. These digital signatures use public-key cryptography and a user’s private and public key pair to authenticate their identity. Let’s take a closer look at what this means and why it’s essential for companies operating in today’s digital world.

What are digital signatures?

Digital signatures are a type of cryptography that protects the integrity and authenticity of a document or message. Verifying a digital signature is similar to using a handwritten signature – it confirms that someone has signed a document or message with their private key. Digital signatures are used to ensure the authenticity and integrity of electronic documents, such as contracts, patent submissions, insurance claims, or other documents that must be legally binding. Digital signatures can also be used to confirm identity or prove ownership of an account.

Digital signatures are created using public-key cryptography, which involves two keys: one public and one private. These keys create an encrypted hash value for any document or message being sent. The sender encrypts the hash value with their private key before sending it along with their public key to the recipient. The recipient then uses their private key to decrypt the hash value and verify that it matches what they were expecting from the sender’s public key. If everything matches up correctly, then they know that the document or message hasn’t been tampered with since the sender signed it.

7 ways companies can use digital signatures

Here are the seven ways companies can utilize digital signatures:

1. Documents can be signed from anywhere

Documents can be signed from anywhere and at any time, meaning there’s no need to coordinate with signers to be in the same place at the same time. For example:

  • A doctor could sign a document from home while watching TV
  • A lawyer could sign a document from a train en route to court for a case
  • An employee could sign an expense report on their smartphone during lunch break

2. Digital signatures reduce paper waste

You can reduce the amount of paper you use per document. You can also reduce the number of documents that need to be printed and signed, which means fewer file folders and fewer storage cabinets. Think about how many times a year your company uses paper to sign documents, file them, or even destroy them. Now think about how many more digital signatures could be used if implemented across your organization!

3. Digitally signed documents are more secure

Whether you’re a small business owner or a large corporation, there are several benefits to digitally signing documents. Digital signatures are more secure than paper because it is easy to lose or misplace paper documents, which the elements can damage. Digital documents are also less likely to be stolen or lost in your fireproof safe if you have one.

4. Digital signatures are more convenient

Digital signatures are more convenient for both the signer and the document recipient. The digital signature eliminates printing, signing, scanning, and email documents. You can sign documents anywhere, including while you are on vacation or at home in your pajamas! No more running around trying to get people’s signatures before noon so that you can have something signed by Monday morning! You no longer need to travel somewhere in person because someone needs their personal signature on a document. You also don’t have to wait until someone gets around to signing it—you can do it yourself instantly without leaving your desk (or bed)!

5. There are fewer mistakes with digital signatures

If a company chooses to use digital signatures, it eliminates the need for printing, scanning, faxing, and emailing physical documents. This saves time because employees are no longer required to read or write on paper forms. In addition, when documents are digitized, they can be easily read by machines instead of humans needing to do so. Also, remember that it is easier for employees if you choose digital signatures and for business owners as well since all documents will be stored on a server where others can access them at any given time without having to go through multiple steps first.

6. Digital signatures save time and money

Digital signatures can save you time and money. The more time you spend on the paperwork that needs to get signed, the less time there is for other essential tasks. Digital signatures help increase efficiency by decreasing the time it takes to sign documents manually or digitally.

How much does it cost to sign a document manually? And how much does it cost to sign a document digitally? There are several factors involved with these questions, including who will be doing the signing and where they are located; whether or not they’re using their own equipment or if you have access to shared resources like printers and scanners; and whether people need training before being able to use those shared resources effectively without causing damage. In addition, if any special equipment will need purchasing—like branded pens used only by one department—then that should also factor into these calculations since those expenses could happen again when moving on to another project down the road.

What happens when we don’t finish what we’ve started? Or worse yet: what happens when we never even start at all? Think about all those projects sitting around waiting for someone else’s approval before moving forward–how much longer would get done if nobody was waiting around anymore.

7. Digital signatures leave an audit trail

A digital signature can help you prove that a particular person signed a document on a particular date and prove that the document hasn’t been altered since its signing. This is called an audit trail. Audit trails can be important for regulatory compliance, especially if your company handles sensitive information such as credit card data or health care records. Companies are required to keep detailed records of who accessed certain documents and when in case there’s ever any question about whether or not those documents were tampered with or unsigned by an authorized user.

Digital signatures make it easy for companies to track these details because they leave behind a secure audit trail every time someone signs a document digitally. The electronic signature software keeps track of all activity related to each signature, including who signed what and when—this way, there’s no doubt about whether or not somebody made unauthorized changes after being given access rights via their digital certificate. This is especially useful because it helps companies avoid potential lawsuits due to negligence resulting from improper record-keeping practices.


Digital signatures are valuable for companies looking to streamline workflows and boost efficiency. They can help you do business in a more secure, convenient way, saving time and money in the process. Digital signatures also leave an audit trail—which means that if you ever have any questions about whether or not a document was signed digitally by someone else (or by yourself), you’ll be able to verify it using the provided proof of authentication.

Additionally, digital signatures are legally binding. So, your company is protected against any potential fraud. In other words: there are fewer mistakes with digital signatures! And because they’re paperless and require no stamps or envelopes, they reduce paper waste and costs associated with printing documents out on paper to get mailed back to someone else via snail mail. Digital signatures allow people worldwide who don’t necessarily trust each other enough yet know that they need someone’s help or expertise but don’t feel comfortable giving them access directly.

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