The difference between electronic contracts and traditional contracts

The difference between electronic contracts and traditional contracts

As companies continue to explore new avenues of digital transformation and e-commerce options, the need for paperless processes becomes even more significant. Compared to digital processes, creating, printing, and sending paper documents to clients or business partners can slow your workflow down significantly and cost you money in lost productivity.

For this reason, companies are now turning to electronic contracts and electronic signatures as a smarter alternative to traditional hard-copy contracts.

Below, we explore some benefits of e-contracts and how they can help your business.

Electronic contracts save time through digital processes

Hard-copy traditional contracts can kill a job proposal or sales negotiation simply because it takes longer for your potential client to receive, read, consider, and sign an enforceable contract.

Think about the timeline involved that lengthens the proposal or sales cycle:

  • 1 day to draw up and mail the contract as is,
  • 3 to 5 business days for the client to receive the contract in the mail,
  • 1 to ??? days for the client to get around to viewing the contract,
  • 1 to ??? days for other stakeholders/employees view the contract and agree to sign,
  • 1 day for the client to sign and mail the document back to you,
  • 3 to 5 business days for you to receive the signed document in the mail.

This is assuming that your client spends a certain number of hours at their desk every day and can view the contract as is within a reasonable amount of time. With more employees on the move than ever before, your proposal is likely to sit in the inbox basket for several days before your prospect even opens the envelope.

All of this amounts to a stalled deal that may never happen because it took too long for the prospective client to receive, view, and sign the document.

E-contracts solve this issue by enabling your prospects to view and provide a digital signature for a proposal instantly on a computer, smartphone, or tablet or on your e-commerce site. In some cases, they may simply have to click an “I agree” button to close the deal. Greater efficiency through electronic transactions can boost your close rates and increase your sales considerably. You can also create a sense of urgency, because prospects may check their email 15 times per day (or more) no matter where they are.

Furthermore, an e-contract computer program allows you to draw up and submit the contract without manually entering or updating data in your proposal. You can make any changes or updates quickly and send out the proposal or a link to a web page minutes after your initial meeting with the potential client.

You experience fewer errors with electronic contracts

Discrepancies in contracts generally occur in one of two ways:

1. Human error

The contract’s creator may have failed to proofread the contract or provide accurate data. The recipient of the contract may have failed to read certain conditions within the document, instead of blanketing the contract with signatures and initials to save time.

2. Manipulation

Either the sender or the recipient ‘doctored’ the contract after the signatures and initials were added.

Irrespective of the circumstances, traditional documents allow both parties to introduce too many errors. This, in turn, can result in legal disputes and other situations in which one or both parties have no legal leverage.

Electronic contracts produce fewer typographical errors. How?

  • Electronic contracts allow you and the recipient to view and adjust the terms of the contract digitally on a web page before agreeing to sign it.
  • Electronic contracts foster a more collaborative process in which both parties may develop the contract together and agree to mutually beneficial business transactions.
  • Both you and the recipient can enter client data once to populate multiple fields. This ensures that addresses, names, signatures, and initials are consistent across the entire contract.

Electronic contracts can reduce operational costs

Electronic contracts can eliminate the need for office supplies and equipment required to produce traditional contracts and business transactions, including:

  • Paper,
  • Printing equipment purchase,
  • Printing equipment maintenance and repairs,
  • Printing ink refills,
  • Electricity,
  • Postage,
  • Filing & storage.

All of these costs disappear instantly when you switch to electronic contracts. Not only do you save your company these costs, but you also save time and money for your clients or business partners who don’t have to or are unable to meet with you face-to-face.

APIs allow you to integrate electronic contracts from your CRM

An electronic contract computer program offers API functions and procedures that enable you to integrate the platform with Salesforce, HubSpot, Microsoft CRM, or other CRM or sale of goods software.

This API integration allows you to expand the functionality of your existing CRM and streamline your internal processes through electronic means. You can create, send, sign, and collaborate on documents efficiently and take fewer steps to complete a task.

Electronic documents are more secure than paper documents

Paper documents can be manipulated at any time throughout document creation, submission, and signing. This is why companies go to great lengths to keep the original agreement intact, such as keeping multiple copies or signing documents in the presence of a notary.

Contract management software with electronic signing capabilities can reduce or eliminate a signee’s ability to tamper with a finalized document during a sale of goods. Even if both parties are allowed to collaborate and alter a document as it is being developed, the software still offers features such as:

  • Limited access to signatures, initials, or requested information,
  • Tracking & recording versions/history of a document,
  • Authenticating a document and a sender/recipient using encryption,
  • Detection features that alert one or both parties that someone has tampered with the document,
  • Compliance options for ensuring that your contracts are both legal and legally binding.

Electronic contracts improve customer service

Electronic contracts allow you to provide documents for your customers faster. Customers can sign documents from any location on any device without waiting for hard copies to come in the mail. Since the electronic software offers an autofill feature, your customers can sign or initial a document once, and it automatically fills out the rest of the document with those same signatures.

This time-saving feature allows your customers to sign an electronic contract from a phone, computer, tablet, or other devices through electronic means. It’s perfect for when a customer wants to move forward with a contract through an e-signature and doesn’t have the patience for it to arrive in the mail. In many cases, a customer may only have to click an “I agree” button or fill out an eSignature to complete a purchase.

Electronic contracts meet compliance and contract law regulations

Although many of the issues that surround electronic contracts and electronic commerce have to do with contract law, more state regulatory agencies, as well as industries, are accepting electronic documents as legally binding documents between two contracting parties within the common law.

Electronic contract software keeps user information secure so that contracting parties can sign an enforceable contract without compromising their privacy. You can feel confident that your electronic contract software meets all compliance standards and contract law regarding electronic commerce.

You can easily create and edit templates with electronic contracts

Do you produce high-volume contracts for a variety of customers or business partners?

If so, writing and rewriting contracts can become time-consuming. Electronic contract software allows you to create templates and electronic signatures that you can use multiple times for hundreds of customers.

Do you need to change your online contract slightly for a different group of customers? No problem. You can easily work from an existing template and only change the sections or electronic signatures that apply to new customers. The software will easily save your template so that you can return to it. You can also save multiple versions of the template and use them at any time. This saves you a lot of time in drafting or re-drafting a traditional contract.

It is easier to monitor, track, and find data

Have you ever found yourself looking through page after page of a paper contract just to find one word, phrase, date, or even typo? If you have multiple versions of the same contract, you could spend hours sifting through several pages of several files just to find the smallest mistake or bit of content that you need to change.

Electronic contract software allows you to perform quick searches through a single document or throughout your entire database to find what you are looking for. You can find a term, a phrase, an amount, or another piece of information throughout the online contract quickly. Imagine how much time and energy you can save through quick searches.

As you can see, there are several advantages to using electronic contracts rather than traditional paper contracts. You can save money in operations expenses, improve your productivity and efficiency, and create more secure electronic transactions with greater accountability. Our electronic contract software also integrates with your CRM through its open API platform.

Have you noticed even more benefits of using electronic contracts? Please share them in the comment section below.

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