Are Electronic Signatures valid on credit applications?

By Phyllis Saavedra, Order to Cash Executive and SME at Emagia Corporation

Most credit departments still use paper or faxed versions for their credit applications. The pace of business continues to accelerate and Sales is expected to close deals faster. In order to stay competitive, many credit departments are prompted to revisit their credit application process and consider credit approval process automation. This brings up the very pertinent topic of electronic credit applications and the validity of electronic signatures.

They are the most secure, convenient and easy way of transacting documents, contracts and letters, so why are people so hesitant to use electronic signatures? The most common fears are associated with legality, forgery and someone inappropriately signing on your behalf. All of these are nearly impossible if you use a trusted solution.

Understanding electronic and digital signatures

Before you embark on using e-signatures first and foremost you need to understand the difference between an electronic signature and a digital signature. This is often the problem when questions of legality with a document arise. A simple electronic signature is any electronic means by which you submit consent or acceptance of documentation. It may simply be a box where you are asked to input your initials. Not all of these will hold up in court. By comparison a digital signature on the other hand is an advanced electronic signature and takes the form of a script that is associated with a person. Typically, and I am by no means an attorney, a signature on the documents signifies intention to accept the terms of the text. For a digital signature you must have a certificate-based digital ID. Since digital signatures are far more secure they are being widely used for regulatory filing in many countries such as the United States, the European Union, India and Brazil.

Enforceability of electronic signatures

In the United States most states have adopted the Uniform Electronic Transactions Act (UETA). At its most basic level the Act provides rules for those that MUTUALLY agree to transact electronically. A federal regulation, the Electronic Signatures in Global and National Commerce Act (ESIGN) was passed in 2000. The objective of these two Acts is to establish that electronic records and signatures are viewed on the same legal level as traditional paper documents and handwritten signatures.

Security risks associated with electronic signatures

So they are legal, can I really trust the security of an e-signature? Again, this is where the important distinction between electronic and digital signatures comes into play. Electronic signatures are not as secure. Digital signatures are by design embedded in the document and cannot be forged. Without the encryption you may risk (and that risk it is still a very low) the desired levels of authentication and confidentiality you desired. For added peace of mind make certain you are using a respected e-sign provider with an industry standard authentication function.

Many of us have signed a document on behalf of a spouse, a boss or a co-worker upon their request. It is fairly universally understood that signing on behalf of another, at their request and with their permission is okay. Digitally or on paper without consent it is considered forgery and you may be committing fraud. Forgery is illegal.

Digital signatures are designed with two different kinds of translation keys that are essential for your security. The public key creates a digital signature by transforming the data into an indecipherable code. The second key, the private key verifies that signature and returns the message in its original form. A person should only give out their public key to those with whom they wish to do business. You can put it on your corporate website or attach it to the document. Your private however is only known to you and perhaps a limited number of other authorized signers. The private key creates the digital signature. When you send a document the recipient must have your corresponding public key in order to verify the digital signature. Simply put the two keys must talk and verify the validity of each other. Your signature is completely secure a long as you keep your private key PRIVATE. Your signature is attached to the document itself. Change the document and a different signature will be produced.

Growing usage of digital signatures

The old ways of doing business are quickly changing. E-signatures are now becoming prevalent in all aspects of our lives. We use them for contracts, tax and banking documents and a whole host of other areas. At my company Emagia we educate our customers on the automation of the corporate credit process. One of the biggest time-saving efficiencies we promote is online credit applications with digital signatures. The digital signature legitimizes the credit application, speeds up the customer onboarding process and keeps our customers from having to print paper applications.

If the above arguments don’t alleviate most of your doubts I will appeal to your environmental nature. Each year in America it is estimated that the average US office worker uses approximately 10,000 sheets of copy paper each year. Not only is this wasted paper, but ends up costing somewhere around $195 billion.

The time is now to set your reservations aside and take one of the easiest steps to automating and expediting your business processes. Cut operational costs, improve efficiency and collaboration, address legal compliance issues and possibly most importantly Go Green! Talk to a trusted legal advisor and get onboard quickly so you can help your organization make faster credit decisions and improve customer satisfaction.

Phyllis Miller Saavedra is currently the Director of Order to Cash Solutions at Emagia Corporation. She has been working in the field of credit and collections for more than 20 years. Over the years she has held senior management roles in companies such as Cisco, Aspect, Novellus, SanDisk and Saba Software. Additionally she has extensive experience as a consultant in all areas of the order to cash lifecycle. She can be reached at 408.386.8462 or by Email at

CMA Partners to Show Off anscersX Multibureau Trade Credit Report at Credit Congress

If you’re planning to attend the 2016 NACM Credit Congress in Las Vegas, June 12-15, one common product you’ll see at top vendor booths is CMA’s anscersX multibureau trade credit report, a single report that contains all the key elements about your customers’ paying habits needed to make most credit decisions.

Some of the credit industry’s top software companies soon will offer or have launched the anscersX report on their platforms , including TermSync, CreditPoint Software, Bectran, Credit & Management Systems Inc. (CMS), and eMagia/ Many will be demonstrating how anscersX can be accessed directly through their software at Credit Congress.

These leading software vendors will help their clients join the hundreds of companies who have already benefited from having instant access to this single report that contains all the key elements about your customers’ paying habits needed to make most credit decisions.

The anscersX multi-bureau trade credit report combines key factors from the three largest trade credit reporting agencies (Dun & Bradstreet, Experian and Equifax), giving credit managers the most complete payment story available. “The anscersX report offers some real advantages to anyone making a credit evaluation,” said CMA president Mike Mitchell. “Single-source Business Credit Reports are made up of accounts receivable data that has been contributed by companies, public record data and payment scores generated from the combination of this data. Since most companies that contribute accounts receivable data only send it to one provider (D&B, Experian or Equifax), using one report may provide only a piece of the payment habit story. I am thrilled that leading-edge software providers feel as strongly as we do that there is a real need for bringing this unique resource to the credit community, and I’m grateful that they are helping us introduce their clients to the power that the three largest credit bureaus can bring to credit decision-makers with limited time and budgets.”

The report, which is also available at, ranges in price from $32.35 to $69.95, depending on the number of reporting agencies the user requests. Users control which reporting agencies are accessed for the report.

To learn more about the program, visit or call 800-541-2622.

About Credit Management Association
Credit Management Association (CMA), which was founded in 1883, is a Glendale, Calif.-headquartered trade association with approximately 1,300 member companies representing over 250 different business categories selling regionally, nationally and internationally. CMA focuses on providing products and services that allow companies to make informed business decisions based on trade credit. CMA is one of the largest affiliates of the National Association of Credit Management (NACM), whose 45 affiliates serve all of North America. For more information, call 800-541-2622, or visit