If your business involves sharing or signing files, especially when it comes to sensitive financial data, you may be wondering which tool is best suited for these activities: a virtual data room or a transaction room? It will definitely be easier for you to decide if you know more about the functions and scenarios of both products. This way, you can increase the productivity of your company and provide it with the right tools to work with.
VDR vs Transaction Room: Security Standards
With virtual data rooms, it is possible to perform many functions: share files, collaborate on projects, view, sign, and structure files, all under the protection of the best security measures. On the other hand, the transactional room also allows signing documents, but under simpler conditions. But as for security, it’s a moot point, because some of them can achieve the same level of security as VDRs, and some don’t protect your data at all.
Below we have listed the processes that require online deal room and that transactional room cannot handle:
- Comprehensive validation before the M&A process
- Corporate fundraising and venture capital transactions
- Legal record keeping
- Auditing
- Commercial real estate transactions
But, for more primitive transactions, such as residential real estate transactions, you can also do transactional rooms. Plus, you can print documents more easily with it, whereas VDRs often don’t offer this feature, for security reasons.
VDR provides advanced collaboration
As has already become clear, 2VDR is a more sophisticated tool, it offers more features and is quite flexible. Even after you’ve already contributed files to the system and edited them afterward, you don’t need to re-download an updated version. All updates are saved and users are made aware of them.
The transactional room can’t offer you the ability to store documents in your space, and they only support Pdf files or their own formats. Also, unlike datarooms, they do not integrate with extraneous applications.
Track changes to improve productivity
Transaction rooms are great for quickly signing a simple and short-term contract, but for larger projects, their capabilities may not be enough. In handling large transactions, only VDRs will be able to provide you with secure file sharing, activity monitoring, and editing capabilities. They keep your valuable data safe while allowing many third-party users to view it, and they provide monitoring and reporting features so you can track all activities down to what was done with the documents.
Manage your project in VDR
VDR isn’t just a repository, it’s also a collaboration tool. For example, the providers give you options for communication between two parties (encrypted chats or question-answer function) and send an email notification to other users if any changes occur. Because of these features, you completely free yourself from the need to communicate via email or video calls, and it’s much more secure.
Project management tools and file organization capabilities simplify your work and optimize your company’s operations. A transactional room can’t provide all that, so if you’re planning large transactions you need a more flexible tool to use, and that’s VDR.
Setting and revoking permissions in the VDR
Your files are fully protected, both externally and internally. The VDR administrator controls user access to certain files. And besides that, he can also set a ban on copying or printing a document to avoid data leakage.