The accounting department is no stranger to large volumes of documents, from invoices and pay slips to audits and returns. As the financial industry shifts towards digitalization, accountants must adapt and adopt new methods for signing and managing documents.
Everyone within the sector should equip themselves with a viable electronic signature for accountants to ensure that all digitally transmitted documents remain accurate, secure, and faithfully executed.
This blog will discuss the advantages of using electronic signatures for accounting and how best to implement them into your business processes.
Table of Contents
Why Use Electronic Signatures for Accounting
Accountants play a key role in managing and organizing financial documents for a company. They oversee, analyze, and report on the organization’s financial health. Accountants work a variety of financial records, including:
- Financial statements
- Budgets
- Invoice
- Receipts
- Payroll documents
- Expense reports
- Tax documents
- Contracts
The management and preparation of taxes, bookkeeping, payroll, financial planning and management, and other services take thorough knowledge and attention to detail. Investing in the right tools is essential to ensure accuracy and efficient processes.
Electronic signatures for accountants are the perfect solution to streamline operations and reduce the risk of errors or fraud. Here are some reasons eSignatures can be advantageous over traditional paper-based signatures.
Faster completion of documents
eSignatures can expedite the signing process, allowing accountants to quickly sign and send out documents without having to wait for physical copies of documents to be returned. This ensures that payments and forms are processed within the required turnaround time, making it easier for clients to stay ahead of their financial obligations.
Increased security
Digital signatures are secure and can be authenticated to verify the signer’s identity. This adds an extra layer of security, reducing the risk of personal identifying information (PII) being stolen or viewed by outside parties without permission.
Lower costs
eSignatures can result in significant cost savings by eliminating the need for physical supplies and postage. It also reduces paperwork, resulting in decreased overhead expenses. It is also a more environmentally friendly option, as it reduces paper and ink waste.
Convenient
Electronic signatures are incredibly convenient as they can be completed and sent out anytime, anywhere. This makes it ideal for accountants who travel frequently or have clients in different parts of the world. It’s also convenient for clients. eSignature technology is one way accountants and tax professionals can quickly provide efficient business transactions with clients.
Compliant with regulations
Compliance with laws, regulations, and policies is integral to any financial process. It makes maintaining secure document control procedures crucial to any organization. eSignatures are compliant with federal, state, and international laws, such as the E-sign Act. They provide a safe way to sign documents while adhering to the industry’s strict regulatory requirements.
Where to Use Electronic Signatures for Accounting
Electronic signatures can streamline and improve efficiency in various processes. Here are some of the areas where you can use electronic signatures for accounting:
- Accounting documents: Accountants may need to sign accounting documents such as invoices, purchase orders, and balance sheets. eSignatures provide a secure and convenient way to sign documents without relying on physical copies.
- Employee expense reports: Accountants may use electronic signatures to approve employee expense reports quickly. It allows employees to submit, approve, and process reports within a shorter time frame.
- Tax documents: Accountants can use electronic signatures for filing and signing tax documents, such as IRS forms and state returns.
- Financial reporting: They can use eSignatures to sign and submit financial reports, such as annual and quarterly financial statements, to the appropriate authorities.
- Audit reports: eSignatures can be used to sign off on audit reports, ensuring that all information submitted is accurate and reliable.
Risks of Using Digital Signatures for Accountants
Data security breach
Digital signatures may be vulnerable to data theft and malicious activities, such as identity theft or fraud. It is essential to ensure that digital signature methods are secure and all sensitive data is adequately encrypted. When using third-party systems, like cloud storage services, check if it has adequate access control protocols to prevent unauthorized access.
Compliance issues
Digital signatures must comply with various laws, such as US and European digital signature regulations (ESIGN Act and GDPR). Accountants should be familiar with the relevant rules and comply with them.
Lack of authentication
Digital signatures are vulnerable to misuse if they are not properly authenticated. It is essential to use methods such as two-factor or signer identity authentication for added security.
Using Electronic Signatures in Accounting: Best Practices
The risks mentioned above can be mitigated by following best practices when using eSignatures. Here are some of the best practices to follow:
Use secure encryption protocols
Secure encryption protocols should be used to protect sensitive data and prevent data theft or malicious activities. Choose an eSignature solution that provides strong encryption and secure data storage.
Verify your signer’s identity
It is important to verify the identity of signers before using digital signatures. This can be done using two-factor or signer identity authentication methods. When using two-factor authentication, you can ensure that only the authorized signer can access the signature.
Maintain compliance
Ensure that your eSignature solution meets the relevant regulations and laws. This includes complying with federal, state, and international laws such as the E-Sign Act and GDPR. Your provider should provide an up-to-date audit trail of all signatures and documents to ensure compliance.
Audit records regularly
This includes checking for any suspicious activity or changes in the system. Auditing records regularly can help detect any unauthorized access or modifications to the system and take steps to mitigate them. Accountants can use audit logs to review the activities and changes in their approach.
By following these best practices, accountants can ensure that their business processes are secure and compliant when using electronic signatures. Electronic signatures can provide cost savings, time savings, and improved efficiency for both accountants and their clients.
Sign Accounting Documents Securely With Fill
Fill is a secure and compliant eSignature provider that offers features that accountants can trust. Our cloud-based application provides an intuitive user experience that allows you to quickly and easily send documents for eSignatures. You can rest assured that your data is secure and compliant with relevant regulations and laws.
Accountants can use Fill to:
- Collect eSignatures from clients and verify their identity with ID authentication.
- Send audit reports for secure eSignature.
- Store documents securely with end-to-end encryption.
- Track the status of documents in real time.
- Ensure security with two-factor authentication.
- Comply with the E-Sign Act and GDPR.
Fill provides a comprehensive and secure electronic signature solution for accountants that streamlines workflow and document signing. Start using eSignatures for accounting today and see the benefits it can bring your business.
