The SMB sector in Indonesia is experiencing rapid growth, particularly in the retail and FMCG industries. Small and medium businesses (SMBs) include enterprises with fewer employees and lower revenue compared to large corporations, such as convenience stores, coffee shops, and local fashion brands.
With this growth comes the need for faster and more secure document management. However, many SMBs still rely on physical meetings for document processing, such as vendor agreements, lease contracts, or purchase invoices. This approach is less practical and less secure.
Why is it less secure? Research shows that 9 out of 10 businesses have experienced document and signature fraud, leading to financial losses and reputational risks. This is why transitioning to electronic signatures is a crucial step in preventing these threats.
Benefits of Switching to Electronic Signatures
Electronic signatures offer more than just convenience. By adopting this technology, SMB owners can take advantage of three key benefits that enhance daily operations:
1. Secure
Electronic signatures provide a higher level of security compared to wet signatures. Encryption technology protects signed documents from fraud and unauthorized alterations. Identity authentication ensures that only authorized individuals can sign documents, preventing misuse.
2. Easy
Electronic signatures can be applied anytime and anywhere, without location constraints. Using a mobile phone or other device, business owners can sign and send important documents without requiring in-person meetings.
3. Legally Binding
Electronic signatures are not only secure and easy to use but also legally recognized. In Indonesia, electronic signatures certified by an accredited provider like VIDA Sign hold the same legal standing as manual signatures. This ensures businesses remain compliant with applicable regulations.
Types of Electronic Signatures
Before making the transition, it is important to understand the two common types of electronic signatures. VIDA Sign offers:
- eSign (Unverified Electronic Signature)
- Digital Sign (Verified Electronic Signature)
Both serve the same primary function but differ significantly in terms of security and legal validity.
1. eSign (Unverified Electronic Signature)
eSign is a simple electronic signature that can be uploaded or drawn directly on a document. It is fast and easy to use since it does not require additional verification steps.
However, eSign is not linked to the official identity of the signer, making it more susceptible to misuse or forgery. This type of signature is best suited for internal documents that do not require strict legal validation.
Read also: Secure and Free Digital Signatures for Businesses
2. Digital Sign (Verified Electronic Signature)
Digital Sign, on the other hand, is equipped with a digital certificate issued by an accredited certification authority (CA). This method uses cryptographic technology to ensure document authenticity and signer identity, providing a higher level of security.
Additionally, Digital Sign holds full legal recognition under Indonesia’s Electronic Information and Transactions Law (UU ITE). This makes it ideal for legally binding documents such as employment contracts, business agreements, and other critical documents that require strong authentication.
Understanding these differences helps businesses choose the right type of signature for their needs.
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Examples of SMB Documents Suitable for Electronic Signatures
To maximize the benefits of electronic signatures, SMB owners and employees should understand which documents can be securely signed using this technology.
Here are some essential documents commonly used by SMBs:
1. Vendor Agreements
Ensures agreements with suppliers and third parties are protected from disputes or forgery.
2. Terms and Conditions
Outlines rules for business collaborations or product and service usage, particularly for retail and FMCG businesses operating online.
3. Privacy Policy Template
Essential for businesses that handle customer data, ensuring compliance with data protection regulations such as GDPR and Indonesia’s Personal Data Protection Law (UU PDP).
4. Non-Disclosure Agreements (NDA)
Protects sensitive business information shared with partners, investors, or employees.
5. Employee Handbook
Includes company policies, procedures, and values, with employee signatures confirming acceptance.
6. Employment Contracts
Defines the working relationship, rights, and responsibilities between SMB owners and employees.
7. Invoices and Sales Receipts
Digitally signed invoices simplify payment processing and reduce errors in transactions.
8. Lease Agreements for Business Spaces or Warehouses
Retail businesses often require legally binding rental agreements for stores, warehouses, or office spaces.
9. Loan or Funding Applications
Digital signatures streamline document verification for bank loans and investment applications.
10. Distribution or Agency Agreements
Regulates the rights and obligations between SMBs and their sales agents or distributors.
By adopting electronic signatures, SMB owners can increase operational efficiency, reduce fraud risks, and ensure legal compliance. This transition also speeds up document handling processes and enhances overall productivity.
Take Your SMB to the Next Level with VIDA Sign
Switching to electronic signatures helps SMBs create a more secure, efficient, and legally compliant business environment. Administrative tasks become easier and more reliable with just a few simple steps.
Now is the time to embrace electronic signatures with VIDA Sign. Secure your business documents with a legally recognized and fully digital solution.
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