Put down the pens! A digital signature is a practical tool that can streamline your business. It replaces the traditional handwritten signature, saving precious time, paperwork and storage space. Beyond just improving workflow, a digital signature that complies with the Electronic Signature Law 5761-2001 grants the document full legal validity and protects you and your business. There are many providers and solutions on the market, each requiring an initial investment and sometimes a long-term commitment to a service provider, so how do you know you have made the right choice? Let’s lay out the essentials.

There is hardly a business today that does not operate in the digital space. The technology revolution has pushed documents into digital formats, and the need to print a document on paper and sign it with a pen is gradually disappearing. It therefore comes as no surprise that organizations and businesses around the world, including here in Israel, are already using digital signatures daily as a replacement for the physical signature.

Convenience, savings and reliability – three reasons to switch to a digital signature

The first reason to move to a digital signature is ease and convenience. A digital signature lets any organization or business send computerized documents to customers anywhere and from anywhere, through a variety of channels – email, SMS and of course WhatsApp. These documents are considered original documents and have legal validity identical to a printed document signed physically. Working this way saves valuable time and costs and enables quick data retrieval whenever needed.

Another reason to switch to a digital signature is its reliability and high level of security. Unlike a simple pen-on-paper signature, a digital signature is virtually impossible to forge. It provides integrity and authenticity to the document, preserves the user’s identity, and ensures that the document and its contents are protected from forgeries and fraud.

Thanks to its high security level and reliability, it is used by many entities and organizations subject to strict regulation – in finance, law, insurance companies, real estate and even government bodies. Yes, even the tax authorities now operate with digital signatures. It is therefore no surprise that small and medium businesses are also discovering it is worth their while to move to digital signatures.

Is there a difference between an electronic signature and a digital signature?

To remove any doubt – there is no difference. It is the exact same concept, since a digital signature is in fact an electronic signature.

Wait, so where does the confusion in terms come from? It most likely happened because in English it is called DIGITAL SIGNATURE, while in Hebrew the law decided to call it “electronic signature”. Yes, Hebrew is a beautiful language but sometimes complicated… and in everyday speech we still call it “digital signature”. So despite the difference in terminology, in practice it is the same thing.

What exactly is a digital signature and why is it so important?

What makes a signature digital? In short, it is a type of encrypted file attached to a digital document.
It uses clever mathematical algorithms (the technical term is asymmetric cryptography) that are embedded transparently in the document and are not visible to the naked eye, except through sophisticated electronic means or dedicated software. Moreover, the encrypted code is unique to each individual document, which prevents the same signature from being transferred from one document to another.

A digital signature serves a dual purpose. One role is to ensure that once a document has been signed, no further changes can be made to it. A common example is a computerized invoice – a digital signature prevents forgery and ensures that no alterations have been made to the invoice. For example, a customer who decides to add a few zeros at the end of the amount you recorded on the invoice. With a digital signature, this will not happen.
What if someone still tries to edit or change a document that has already been digitally signed? In that case the signature is immediately removed and will no longer appear on the document, so you can tell that the document has been altered and is no longer valid.

Another role of a digital signature is to identify the person who signed the document. If, for example, it is a contract, it is important to know the details of the person who signed it. A digital signature also stamps the document with the time and date of signing. This makes it possible to verify the exact moment of signing and the date the document was sent, a detail that strengthens its legal validity.

A digital signature is also important for cyber protection. As the technological world develops, the risks of business systems and information databases being breached by hackers grow. A digital signature significantly reduces the chance that, in the event your business account is breached, signed and sensitive documents will be manipulated or altered without your knowledge. 

Is a digital signature legal?

Absolutely. In 2001, Israel decided to anchor the status of the digital signature in law, and the “Electronic Signature Law” came into effect. From that point until today, a digital signature has had legal standing, and the courts in Israel recognize it as a signature with full validity.

According to the provisions of the law, documents approved for digital signature by two-factor authentication have the same legal status as a document signed with a regular signature. In other words, a digital document that has been digitally signed is, from that moment on, considered a fully legal document for all purposes.

The law distinguishes between three types of digital signature

Electronic signature

The simple, common and familiar graphic signature. The same scribble we are used to drawing on the phone screen or the tablet of the courier who delivered a package. It is merely a scan, which is why it is relatively easy to forge or imitate and has almost no legal validity. This type of signature has minimal security, if any.

Secure electronic signature

The reliable and secure signature widely used today by business owners. It enables exclusive identification of the signer and tracking of the document’s contents. The method applied here is two-factor authentication, which includes two parameters – a signature linked to the signer combined with a code unique to the document. The law states that a signature is secure if it is unique to the holder of the signing means, identifies the holder of the signing means, was produced by means under the exclusive control of the holder of the signing means, and makes it possible to detect any change made to an electronic document after the time of signing.

Certified electronic signature

– a signature backed by an authorized certifying authority in accordance with the requirements of Israeli law. The signature holder receives a “certified” electronic certificate, which is essentially a smart card unique to the signer. Only with it is it possible to sign documents digitally, somewhat like a key to a door that cannot be duplicated unless you hold a special card.

How do you know if your business needs a secure or a certified signature? A secure digital signature meets the need in most cases, unless it is a corporation such as a bank, a notary or another official body. When in doubt, the business owner should consult legal counsel and check whether the law requires a certified digital signature.  

How does a digital signature streamline your business?

A digital signature streamlines business management in many ways.
Ever found yourself with a jammed printer? Without a pen or your glasses? Facing a sudden surge of customers? Chasing the manager for approvals? Shall we keep going?…. There are also processes like the “signature round-robin”, common in large organizations or even residents’ committees, that can take weeks before a final document containing numerous signatures is produced! And don’t forget the shelves, drawers and binders filled with documents that gather dust.

That is why most business owners whose time is precious moved long ago to computerized documents. From invoices through receipts, orders, contracts, price quotes, warranty certificates and more. Instead of waiting days, sometimes weeks, for these documents, today everything happens online in just a few minutes using a digital signature. 

Of course, managing digital documents is also much easier and more convenient through computerized systems and business management software – whether it is order management, advancing processes that require approval, tracking payments, matching invoices against inventory and anything that requires ongoing integration with the business.

A digital signature can save a business thousands of shekels a month, but that is not all. Once you switch to using a digital signature, you will also improve your image and your business’s image – the customer will find it convenient to work with you, you will be perceived as an advanced and also green business! Your contribution to environmental protection will come from a significant reduction in paper consumption, eliminating the need for transport, and reducing the waste and pollution they create.  

Which businesses is a digital signature suitable for?

As we mentioned at the beginning of this article, a digital signature is suitable for all types of businesses. There is no business today that cannot gain and become more efficient by using a digital signature. If you are a large business required to issue hundreds or thousands of signed documents a month, a digital signature is a world of difference for you in terms of efficiency and savings.

Even if you are a medium, small or micro business, an online shop or a neighborhood pub that produces only a handful of documents each month for customers and sends them via computer or mobile phone – the right way to operate is with a digital signature. Don’t forget that your customers also expect a fast and convenient digital experience, and most importantly – one that is secure.

How do you obtain a digital signature? You should know that it is not a complicated or expensive process at all. In fact, you can purchase a secure digital signature online or even create one yourself.

Want to combine a digital signature with a secure form? Discover the secure digital forms system from GoMixApp. And if you are also looking for a smart business card – get to know our digital business card system.

In summary, a digital signature has become a popular and accessible tool that streamlines your business performance. If things like legal validity, information security, business efficiency, and significant savings of time and money are important to you – a digital signature is the answer for you.