What is an electronic signature from a CFO's perspective? More than just "signing quickly" to complete a procedure, an electronic signature is a... legal and financial control points They can decide whether that document is valid enough to approve expenses, pay invoices, or record liabilities.
When businesses misunderstand or implement electronic signatures haphazardly outside of established procedures, the risks often lie not in the signing process itself, but in the consequences: disputes over responsibility, discrepancies in reconciliation, delayed approvals causing cash flow disruptions, and data mismatches when integrated into the ERP system.
This article will help you understand correctly and comprehensively how to place electronic signatures in the right place within your financial control system for effective implementation.
What is an electronic signature according to the Electronic Transactions Law 2023, and why is it crucial for CFOs to understand it correctly?
Electronic signature It is electronic data that is logically attached or linked to data message Its purpose is to verify the signatory and express approval of the content. In business, an electronic signature is legal evidence Decision-making regarding responsibility, risk control, and cash flow.
From a CFO's perspective, "understanding correctly" goes beyond a definition and lies in three core questions:
- Who signed: Can the signatory be verified as the correct signatory (signatory verification)?
- Sign what? The signature is attached to the correct version of the document, and the content has not been altered after signing.
- When to sign: Can the time of signing be traced and compared?
If electronic signatures are used merely as a formality, businesses may face very real risks:
- Signing the wrong document/wrong version can lead to incorrect payments or incorrect approval of obligations.
- Signing documents beyond one's authority leads to unclear individual accountability and weakens the internal control system.
- Signing documents outside the official system fragments records, making them difficult to prove during audits, disputes, or post-audits.
Key terms that CFOs should be familiar with in this content include: Data message, signatory authentication, content consent, legal evidence, non-repudiation.
How do electronic signatures and digital signatures differ from a financial risk perspective?
A digital signature is a type of electronic signature. Digital signatures utilize public-key cryptography to ensure integrity, authenticity, and non-repudiation. This is why businesses often prioritize digital signatures when strong legal evidence and clear accountability are required.
The key point to understand correctly is the "subset" relationship:
- Digital signature ⊂ electronic signature. Not all electronic signatures are digital signatures, but digital signatures are always electronic signatures.
In terms of mechanism, digital signatures are based on the PKI platform:
- The private key is used for signing: whoever controls the private key is responsible for signing.
- The public key is used to verify signatures: it helps the recipient/auditor confirm the validity of the signature.
- Digital certificates issued by CAs help link the subject's identity to the public key, increasing the ability to prevent repudiation and hold individuals accountable in case of disputes.
When are "simple" electronic signatures not secure enough? Usually, it's in high-risk situations:
- Approve large-value payments or payments based on completion milestones.
- Contract/appendix amends payment terms, price, and quantity.
- Acceptance testing, handover, and debt confirmation – where a single incorrect signature can "unlock" an improper financial obligation.
CFO's perspective: Confusion between electronic signatures and digital signatures often leads to Choosing the wrong level of control for a transaction. As a result, the business can "sign" the agreement but cannot "defend" it when proof is needed.
Under what conditions is an electronic signature recognized as legally valid?
Electronic signatures have legal validity when the signatory can be identified, the content is guaranteed not to be altered after signing, and they can be verified and compared in case of disputes or audits.
In auditing and dispute resolution, electronic signatures stand firm when businesses can demonstrate four layers of verification:
- Authentication: Verify that the signatory is the correct signatory (who signed).
- Integrity: The content will not be modified after signing (what is signed).
- Homestamp: has a reliable timestamp (when was it signed).
- Audit trail & verifiability: It has a traceability log and the ability to independently verify (who approved it, what flow it was, what was the basis).
Without an audit trail, businesses can easily fall into the situation of "having signatures but unable to prove the process," significantly increasing the risk when the auditing agency asks: under what authority were the signatures made, based on what budget, and whether there was a separation of duties (SoD).
How does the electronic signature process affect business costs and cash flow?
Fast and accurate electronic signatures shorten the approval-payment cycle, thereby improving working capital turnover and reducing operating costs due to delays and reconciliation errors.
In financial operations, the relationship is linear:
Sign/Approve → Payment → Cash Flow
When signatures become an "approval bottleneck," businesses will see hidden costs increase:
- Late payments may result from revolving documents, missing information, or incorrect signed versions.
- Increased costs for handling exceptions (correcting documents, reconciling, requesting re-signing).
- Cash flow forecasts are inaccurate due to unclear approval status.
The formula commonly used by CFOs to quantify the impact on the accounts payable side is:
DPO = (Accounts Payable / Cost of Goods Sold) × 365
If slow approvals prevent businesses from taking advantage of optimal payment terms, or frequently lead to overdue payments, opportunity costs increase and the quality of cash forecasts decreases.
Bizzi in this process This should be considered a layer of control before money leaves the account:
- After signing, documents/invoices are moved to a centralized processing stream instead of being lost in emails.
- Bizzi Bot supports data extraction and invoice content reconciliation; for businesses managing purchases by purchase order (PO)/gross order (GR), the PO–Invoice–GR logic helps detect discrepancies before payment.
- Early detection of discrepancies helps reduce the risk of incorrect or delayed payments due to the need to reprocess records.
How can we integrate electronic signatures into the expense approval process without disrupting the ERP system?
Electronic signatures are only truly effective when integrated into the expense approval workflow, linked to budget limits and ERP data, rather than being signed separately outside the system.
Three common risks of signing contracts outside of official channels:
- Loss of budget control: Only after signing did they discover the budget/cost center error.
- Weak SoDThe roles of the proposer, the approver, and the payer are not clearly separated.
- ERP data disruption: The signed documents are scattered and not linked to the accounting entries/payment records.
The correct implementation usually starts with “signing authority design”:
- Who is authorized to sign which types of documents?
- How much money is required for signing the contract?
- How are budget overruns handled?
- When authorization is granted, how is the audit trail recorded?
In this section, Bizzi plays the role of creating a “structured control point”:
- Set up the approval matrix in Bizzi Expense by budget, department, and type of expenditure (Opex/Capex, hospitality, business trips, procurement, etc.).
- Only proceed to the signing stage when the expenditure is within the approved budget/allowance. Or there are clear escalation mechanisms when the threshold is exceeded.
- Cost data and approval status are standardized.It's easy to synchronize with accounting/ERP systems, saving CFOs from having to manually reconfigure things at the end of the period.
The result the CFO received was: the signature became control point in the system, not a purely formal "final move".
How do electronic signatures support more efficient accounts receivable and debt management (DSO)?
Electronic signatures help standardize contracts and accounts receivable documents, creating a clear legal basis for debt reminders, reconciliation, and shortening the number of days to collect (DSO).
On the revenue side, electronic signatures are becoming increasingly important in documents related to "decisions on the right to claim payment":
- contract/order,
- acceptance report/handover report
- Confirm outstanding debts,
- Appendix amending the payment terms.
The formula used by CFOs to track cash collection performance:
DSO = (Accounts Receivable / Revenue) × 365
If documents are signed late or lack clear legal basis, the debt collection and dispute resolution process will be prolonged, causing DSO to increase and cash-in forecasts to become less reliable.
Bizzi in this section is the debt management layer based on signed records:
- The contract/agreement is signed electronically and stored centrally., linked to customer records and payment terms for quick tracing in case of disputes.
- Bizzi ARM supports debt reconciliation and reminders. According to the signed agreement, this reduces reliance on "manual file searching" and speeds up cash collection.
- The CFO monitors the status of applications and collection progress in near real-time, rather than waiting for the end-of-period report.
Comparison Table: Discrete Electronic Signatures vs. Electronic Signatures Integrated into Financial Control Systems
| Criteria | Disjoint electronic signatures (email/chat/separate files) | Electronic signatures integrated with financial control. |
| Legal | Difficult to prove the process; lack of consistent evidence. | Easy to trace transaction records; increased probative value. |
| Content control | Easy to sign the wrong version; difficult to ensure integrity. | The process focuses on reducing version errors; reconciliation before payment. |
| Budget control | Only after signing did they discover it exceeded the budget. | Attach approval matrix and limits before signing. |
| Cash flow | Approval delays → delayed payments/collections | Reduce bottlenecks, speed up the approval-payment-collection cycle. |
| Auditing | Audit trails are fragmented and require lengthy explanations. | Centralized audit trail, fast retrieval by vendor/contract/expense |
Frequently Asked Questions (FAQ)
Is an electronic signature different from a digital signature?
Yes. Digital signatures are a type of electronic signature based on asymmetric key cryptography (PKI), often accompanied by a digital certificate issued by a CA, increasing non-repudiation and verification capabilities.
Do electronic signatures have the same legal validity as handwritten signatures?
Depending on the conditions and type of electronic signature, the Law on Electronic Transactions 2023 stipulates the legal validity of an electronic signature when it meets the recognition requirements as prescribed (identifying the signatory, ensuring the content, verifiable/comparable, etc.).
Should businesses allow employees to use personal digital signatures?
Internal control policies need to clearly define who is authorized to sign which types of documents, the limits on this authority, the authorization mechanism, and individual accountability. Without an approval matrix and a Statement of Documents (SoD), the risk of signing incorrectly or exceeding authority increases.
How does remote signing affect financial security?
Remote signing speeds up operations but requires stronger control over identity, key/HSM management or cloud-based signing models, along with fraud monitoring and traceability logs.
What should be done if the private key is compromised or the token is corrupted?
The incident response process needs to be activated: certificate revoking/blocking via the CA, replacing the device/block, and reviewing transactions signed during the suspected risk period.
Can electronic signatures help reduce tax audit risks?
This is possible if the business has a complete audit trail, centralized record keeping, pre-payment document reconciliation, and a link to accounting entries/contracts.
How can we measure the financial effectiveness of implementing electronic signatures?
Track before-and-after metrics: approval time, return rate, number of payment exceptions, and impact. DPO/DSO/working capitalWhen signatures are integrated into the control workflow, these metrics typically improve more significantly compared to signing separately.
Conclude
An electronic signature is not a "signing tool" but rather... checkpoint Electronic signatures determine the validity, accountability, and continuity of financial data. CFOs will benefit most when electronic signatures are properly placed in the process: signing with the right authority, within the right budget, on the right documents, and traceable.
If implemented in a fragmented manner, businesses may be able to sign documents quickly, but this comes at the cost of disputes, discrepancies in reconciliation, and ERP system disruptions. By integrating electronic signatures into workflows for cost control, invoice reconciliation, and accounts receivable management, businesses reduce risks and improve cash flow quality.
In that model, Bizzi acts as a control system for the buyer: standardizing approvals by credit limit, increasing pre-payment reconciliation capabilities, and managing accounts receivable based on centralized electronic signatures, helping CFOs make decisions on clean and consistent data.
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Bizzi – A solution to help businesses achieve comprehensive digital transformation and implement electronic signatures.
In the context of explosive digital transformation, the question “what is an electronic signature” is not just a concept but has become an essential need of every modern business. Bizzi offers a comprehensive digital solution ecosystem, helping to integrate and deploy electronic signatures seamlessly into accounting, financial and operational processes.
Here's how Bizzi helps businesses apply electronic/digital signatures in each important transaction:
- B-invoice (Electronic bill): Solution Electronic invoice Bizzi's allows businesses to issue, download and store invoices with integrated valid digital signatures in accordance with regulations. This completely replaces traditional paper invoices, ensuring legality and data integrity.
- Automatic processing and reconciliation of input invoices (IPA + 3-way matching): Bizzi helps accountants check, reconcile and archive incoming invoices without manual operations. Although it does not generate direct electronic signatures, the solution operates efficiently within a fully digitized process where digitally signed documents are processed securely and quickly.
- Bizzi Expense – Expense management: This solution digitizes the budgeting, tracking, and approval process with electronic confirmation steps, instead of manual signatures on paper. This reduces errors, increases transparency, and speeds up approvals.
- Bizzi Travel – Management of per diem expenses: Booking tickets, approving business trips and managing expenses are all automated. Electronic signatures help legalize relevant documents without requiring hard copies, thereby streamlining administrative procedures.
- ARM – Debt control: Bizzi supports automatic debt tracking and reminders. Documents such as debt reconciliation reports, when integrated with electronic signatures, will ensure legality, minimize disputes and increase transparency in financial relations with partners.
Bizzi's solution aims to eliminate manual paperwork, shorten business processing time, minimize errors and operating costs. With a strong technology platform, businesses can confidently transform digitally and comply with legal regulations more easily.
To improve the efficiency of invoice management as well as automate the financial and accounting processes of the business. Register to experience Bizzi's comprehensive solution suite today!
- Link to register for a trial of Bizzi products: https://bizzi.vn/dang-ky-dung-thu/
- Schedule a demo: https://bizzi.vn/dat-lich-demo/
