6 top reasons to keep using digital signatures forever

This item was originally posted as a guest post on the OB10 blog: http://www.ob10.com/OB10Blog/

When you’re living in one of the Latin American countries and in some Asian countries you have to use advanced electronic signatures. But when you live in the EU, a new VAT directive is about to change al in the digital signature arena. At first sight.

So what is going here? As from 1 January 2013 a new European Directive comes into effect (read: should have been implemented in the national legislation of its Member States). And this new EU Directive allows for e-invoicing in its simplest form in every member state.

That way the benefits of electronic invoices can also reaped more easily by the European SME’s.

No need for digital signatures

The keywords of the new EU e-invoicing legislation now are: liberalisation, simplification, equal treatment, business controls and harmonisation. And also there is no need, no requirement to use technical stuff like advanced electronic signatures. Formally, that is. Because in practice things look very different.

I know, this sounds weird. But it is true. Electronic signatures have their own what we call: intrinsic value. So if after 1-1-2013 digital signatures or no longer required for electronic invoicing by fiscal law, you still keep using digital signatures.

(P.S.: Electronic signatures is a legal term. A form of an electronic signature is the digital signature. A digital signature are based on certificates/PKI and are legally called advanced electronic signatures. If you had to identify yourself to receive a digital signature certificate, you have what is called a: qualified advanced electronic signature.)

6 reasons to keep using your digital signatures

So what are these five reasons to keep using digital signatures?


Digital Signatures make it much easier to prove your fiscal compliance

With the new EU Directive on e-invoicing you can rely on business controls to comply with the fiscal requirements. In simple words, business controls are the process you now already have in use to check if your invoices, payments and book-keeping is okay. They can now also apply to e-invoices.

So, everything stays the same? Almost. By using business controls with e-invoicing the tax authorities presume that every is okay. But they can ask you to dig deeper to provide them with more evidence to assure them you comply with the fiscal requirements: authenticity, integrity, legibility.

Now, using an electronic signature, preferably an advanced electronic signature creates so much more guarantees that you can easily assure the fiscal authorities that you comply.Digital Signatures make it so much easier to prove your fiscal compliance.


Digital signatures makes things much easier for trade law evidence

Of many things, an invoice is a signal to initiate payment. However in most times an invoice just isn’t enough. And then we to resort to reminder after reminder. And in some case it leads to a lawsuit.Imagine a lawsuit based on electronic invoices, or even worse electronic invoice data. A smart lawyer will try to undermine the integrity, authenticity and legibility of your e-invoice (data).

By using a digital signature in the e-invoice itself, the message carrying the e-invoice, you create non-reputable evidence about the invoice and its contents. Making the “e” aspect of you business transaction a non issue.That way you can focus on what is really important: convincing the judge/jury that you are entitled to getting paid (the invoice amount and additional damages).


Think about your reputation and responsibility: a customer centric professional

Every company has a reputation. That reputation differs from companies and in time. But still you have reputation. A digital signature adds to your reputation. It shows that your are a professional and that you can be verified through your credentials in the digital signature.

And you of course try to service your clients or customers to the best extend possible. By adding a digital signature to an e-invoice. You help comply with fiscal requirements (see point 1. above).

Just because some legislation says you don’t have to use digital signatures anymore, doesn’t mean that your responsibility as a good business partner decreases.


Acquisition fraud: ghost invoices

The “world of e” is a mirror of the real, brick and mortar world. So as there is acquisition fraud with paper invoices in the real world, there are also fraud e-invoices. These fraud invoices are used for phishing, for installing malware, for spreading viruses, for espionage, for all kinds of purposes.

And, with the uptake of e-invoicing (and the liberalisation of e-invoicing in the EU) you can expect an exponential uptake of these fraud invoices.Now with a digital signatures in the e-invoice or its message, your customers immediately know that this invoice comes from you. Your invoice is ‘verified by digital signature’.


Return on Investment

This applies to all e-invoice service providers and to all companies that already invested in digital signatures: don’t stop using them. You probably invested in them specifically for e-invoicing and maybe also because of other governmental requirements. But stop using digital signatures has as consequence that you will not reach the Return on Investment (or being able to use the governmental services).So if you already have a digital signature (service) in place: keep using it.


The rest of the world

Whereas the EU is liberalising electronic invoicing, a lot (perhaps most) of the countries outside of the EU follow a different path. For instance Latin American the e-invoicing landscape has become very strict.

To able to trade with those countries you will need a digital signature and sometimes (a lot) more of them.

End of story

So at the end of the story: digital signatures are here to stay and they should. However it would be great if someone made it much easier to get one. Because that is a real pain in the proverbial bottom.

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1 Comment

  1. Anyone not adopting electronic signature software will be left behind in the coming years.