Compliance

Digital documents and digital document management

Rachel Lee
October 20, 2021

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Digital documents and digital document management offer a far more efficient way of working for many businesses. Hard copy documents are being phased out by companies in preference of digital documents the world over. Companies are starting to see that digital documents are not only easier to store, but they can also be leveraged far more easily than a hard paper copy of a document. 

But what exactly is a digital document? And what is a digital copy of a document? Are they the same thing? Or do they have to be used differently? Here, we answer those questions and look more closely at digital document management and how to sign a digital document. Doing so will allow individuals to make use of digital documents to their best advantage.

Digital document definition

Simply put, a digital document is any document that is in a digital format. A digital document, importantly, differs from an electronic document. A digital document will be paperless when it was initially created and, as a result, can only be viewed on a computer or other electronic device. As a result, a digital document can be made up of texts but also of images and even videos in some cases - or a mixture of all three.  

Electronic documents, in comparison and strictly speaking, are documents that are compiled purely of data. As a result, they can be difficult for anything other than a computer to read. The data in the document can be transferred and extracted as required - and often automatically by systems. 

However, despite the differences between an electronic document and a digital document, many use the terms interchangeably.

Digital document management

Digital documents offer a far easier way to cope with storage. In the past, hard copies on paper have had to be filed away in a filing cabinet or other storage facility. The process, though necessary, was cumbersome and prone to error that was hard to resolve. If a document went missing due to being incorrectly filed at one point, it would likely stay missing. All information within that document was subsequently lost. 

Digital documents, however, can be stored in cloud storage or other electronic storage solutions. The result is that documents can be found through a quick search so that they are rarely lost. Plus, the data within digital documents can then be used far more quickly than if digital documents were simply printed and stored the old-fashioned way. It means that companies can extract information from documents to use elsewhere to support making informed business decisions. 

Additionally, in the case of digital documents like contracts, that data can also be used to help trigger key events such as autogenerating documents should specific targets or times be met - which are laid out in the original digital document. 

And, from that point on, creating documents becomes far easier. Digital documents can be used as a template or even made into a template to help standardize any future documents that hold the same information - bar a few details. Plus, populating data derived from past digital documents is quicker as it can be digitized into a process that does not involve data input from a person. Human error is therefore much reduced in both instances. So, if a document is a legal one, the chance of legal disputes in the future are far reduced due to improved accuracy in all future documents. 

Another part of an excellent digital document management system is the ability for several parties to work on a document at once. All their inputs are saved, but they are also recorded, so an audit trail of a document is forged. That can be crucial at times for businesses who like to go back over past documents to help improve future processes, procedures, or activities. Collaboration is easier over an effective management system and thus enhances the final digital document and any work stemming from it. 

How to sign a digital document

Digital document signing is one of the most significant benefits of having a digital document within a digital document management system. For a digital document to have a legitimate signature, that signature must be authorized and authenticated. Digital document management systems worth using will do this using a qualified certificate. That certification will be authenticated from the outset - like a person’s online banking details or other reputable sources. 

Digital document software will allocate a page for digital signatures when they are required. The entire document is then sent electronically to all those that need to sign it. Before signing, a person will have to go through two-factor authentication or an equally robust method to ensure security. Then, the software will simply ask the parties involved to click and sign in the relevant boxes or fields. When everyone has signed who needs to, the original party is informed, and the contract is in effect from its effective date.

Overall takeaways to digital documents

Digital documents are of far more use than a traditional hard copy document - or a digital copy of a document like a scan. They can be used far more readily in the future. The creation of new documents that require input from the original digital document can be done easily. Having documents signed quickly by several parties is far simpler to achieve. Collaboration by many is possible. Storing documents that are digital is so much more secure. 

Using our digital templates and autogenerating automated software is one of the easiest ways that you can harness the power of digital documents within your business today.

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