Key Takeaways

• File format impacts signature validity.

• PNGs are editable and noncompliant.

• Format issues delay key processes.

• Poor storage weakens audit trails.

• Version mismatches confuse.

• Standard formats reduce rework.

• Early checks prevent disruptions.

• Convert a PNG file into a PDF for compliance.

Client signatures are not merely a procedural nicety they're an essential component of holding entities accountable, complying with the law, and passing audit muster. For contracts, approvals, and disclosures, or whatever other purpose, organizations need to get and keep these signatures in a manner that resists scrutiny by regulators.

Yet, digital processes have created their own set of complexities. Customers tend to send signatures in image format, such as PNG, particularly when they are using touchscreens or scanners. The image files may appear fine initially but tend to fail during audits or internal checks because they are editable or have non-uniform formatting.

This article examines the real-world hazards of dealing with client signatures in a non-standard format, such as how non-PDF files can lead to compliance failures or operational slowdowns. You'll discover how to overcome these issues with intelligent file practices, verifying each signature you obtain is both secure and audit-prepared.

Why Signature File Formats Matter More Than You Think

Electronic signatures are now the standard in all contracts, approvals, and authorizations. Yet, the way that these client signatures are saved matters a lot in terms of how they will stand up during audits or compliance reviews. Failing to consider this can make documents get flagged, held up, or rejected completely.

Knowing the Most Common Signature File Types

Client signatures are usually sent in one of three types: PNG, JPEG, or PDF.

• PNG (Portable Network Graphics): High-quality images with lossless compression. Usually employed when a signature is taken through a touchscreen, mobile phone, or scanning application.

• JPEG: Of slightly lower quality because of compression, yet very commonly employed, especially in images of paper client signatures.

• PDF: A fixed-layout format is best for ensuring the integrity and structure of a signed document. In contrast to image files, PDFs are less likely to change.

While JPEGs and PNGs are suitable for the first collection, they lack the structure and security features that formal documentation would require.

Why PNGs Are Popular But Not Ideal

There are solid reasons that PNGs are so prevalent in signature submissions. They're quick to create, send, and embed in documents. Signature apps on most smartphones and signature tools default to PNG format due to speed and ease.

But PNGs are editable and do not contain embedded metadata, which can cause problems in verifying the document. Since there is no standard format, such as PDF, there is no assurance that the signature will look the same on all systems or can be archived effectively.

Why PDF Formats are Preferred by Compliance Teams

For legal proof, internal controls, and regulatory examinations, businesses need records that are non-editable and dated. PDF files provide these benefits:

Locked layout and embedded fonts

Metadata support (time, author, version)

Audit Risks of Non-Standard Signature Formats

Applying PNG or JPEG client signatures in their native form may lead to:

• Rejected Documentation: Files not secured or standardized may be refused by auditors.

• Redundant Outreach: You might need to reach out to clients multiple times to resend or reform their client signatures, making it inefficient.

• Internal Process Delays: Month-end closings, legal approvals, and contract reviews get held up when documents are not audit-compliant.

All these problems are avoidable with a simple yet essential step: saving all signature files in audit-compliant formats before archiving or processing.

The Hidden Cost of Format Oversight

Beyond compliance concerns, inconsistent signature formats introduce substantial inefficiencies and hidden expenses. IDC reports that document challenges account for 21.3% of productivity loss, which costs businesses approximately $19,732 per information worker per year. When signature files come in mismatched formats like PNG or JPEG, retrieval becomes slower, version control suffers, and audit trails become muddled, driving up both time and cost.

The Legal and Operational Risks of Poor Signature Storage

Digital client signatures are commonly utilized nowadays, yet improper storage methods can lead to significant issues. Ineffective storage methods can result in absent audit trails, unsuccessful compliance assessments, and potentially legal repercussions if a contract or authorization is challenged.

Retention Policies Need More Than Just File Storage

Simply saving a signed file is not enough. Organizations must ensure the entire signature lifecycle is compliant:

• When was the signature added?

• Who had access to the document before and after signing?

• Is there a clear folder structure for storing client-related documents?

Without consistent document naming, folder hierarchies, and access controls, even legally valid client signatures can be questioned due to poor data management.

Clean Audit Trails Depend on Structure, Not Just Storage

An audit trail isn’t just about having the right documents—it’s about having them organized and traceable. Best practices include:

• Centralizing signature files using a clear naming convention

• Logging changes or updates to signed documents

• Ensuring every document version is time-stamped and archived

Audit teams rely on this structure to confirm compliance. When signature storage is it, proving compliance becomes harder, even if the client did sign.

Version Mismatches and Duplicate Files Add Risk

Another overlooked risk comes from version mismatches. If a client signs one version of a document and a later revision is stored separately without a record, it can raise serious questions.

• Was the client aware of the final terms?

• Which version was executed and approved?

These issues often arise when client signatures are stored as isolated PNG files outside the original document or without date tracking.

How a Simple Signature Format Caused a Month-End Delay

As part of the finance team at a mid-sized consultancy, I was closing out several client files toward the end of the quarter. Everything was on schedule until I came across a signed agreement from one of our key clients, saved as a PNG file.

At first, I didn’t think it was an issue. The signature looked fine, the agreement was complete, and I had seen PNGs used before. But during our standard compliance check, the document was flagged. Our internal policy, aligned with audit requirements, mandated that all signed documents be stored in secure, non-editable PDF format. That meant I had to convert PNG file into PDF immediately to meet documentation standards.

The issue wasn’t the conversion itself it was the time spent validating the result, making sure the document didn’t lose formatting, and updating our records accordingly. That one file set back the closing cycle by half a day. It was a clear reminder that minor lapses in file handling could become operational bottlenecks at critical times.

Where the Process Broke Down

The root of the problem wasn’t just the PNG format it was a lack of standardized expectations communicated to the client. Our client wasn’t at fault for sending a common image file. What was missing on our end was a documented policy outlining acceptable formats for signed submissions.

In addition, no automated system existed to detect or convert image-based client signatures when received. Therefore, the problem was not caught until later stages of review, causing undue stress and urgency.

Compliance Implications Beyond Delays

Delays are only one result. If this had not been caught, we might have been in trouble at a subsequent audit. PNG files, being editable and frequently missing metadata, are not necessarily accepted by regulatory agencies as legally binding documents.

Lessons Learned and Actionable Fixes

This experience led us to introduce several simple yet effective measures:

• Client Guidance: We now include a note in every client communication requesting that signed documents be returned in PDF format.

• Internal Checks: Our document intake process includes a step to flag non-PDF signature files early.

• Conversion Protocol: A clear protocol is now in place to securely convert PNG or JPEG signatures into PDFs as part of the initial review, not at the end.

The Bottom Line

To maintain the client signatures in the same format and under audit procedures, such as PDF, is not a technical choice but is more of a necessity for compliance and life support. While certain features of PNG may be useful, they are also fraught with risks that would interfere with working processes, complicate auditing, and affect legal defensibility. Any organization that is committed to standardizing signature formats, document-upload methods, and storage will therefore minimize the chance of costly mistakes and increase its readiness for audits.