B-BBEE is at the top of mind for many businesses at the moment.
Although the Amended Codes state that they come into effect after a 1 year transition (being 10th October 2014) the reality is that your preparation will need to begin as soon as your next financial year begins.
In other words if your financial year end is February 2014 you will need to start working on the new codes from March 2014. Any business whose year end was September 2013 has already started their financial year and will therefore need to be applying methodologies required in the Amended Codes now.
A year transition is not a long time, the fact that it is based on a financial year period (12 month rating period) that for most companies begins in just a few months shows the importance of beginning preparation early.
How to ensure that you achieve a successful BEE verification using the Amended Codes:
B-BBEE compliance can be broken into a few core phases comprising of both your last financial year period which is used to get verified and the future financial year period which you can use to maximise your points or refine your methods of earning points.
It has long been our view that a sound understanding of Black Economic Empowerment and how it affects you is absolutely key to a successful verification. We recognize that our clients expect advice tailored to their business. We are best able to do this if we are able to gather good quality information from each client. It therefore becomes critical for us to share information about BEE with each client so they can match what earns them points with what they have done.
Once you understand BEE start processing each piece of data, firstly to ensure it is correct and then to ensure it is optimal from a scorecard viewpoint.
We suggest that you start with Employment Equity and Procurement. Then Skills Development, Enterprise Development and Socio-economic Development. Your final element is Ownership as it doesn’t change often. Management is already considered with a comprehensive list of employees and directors.
Effectively you are now able to start producing your first preliminary scorecard. Your score will in all likelihood be low – as are most businesses initial scores – but it will give you a starting point. You can work towards increasing the score in line with your strategy. By creating a scorecard you will have a grounding with which to build on.
From a practical consulting viewpoint – once we have a good understanding of your business we then advise you on what activities you should implement that will be most suitable for your business. Once implemented you will know exactly how many points you have earned.
The final step is verification. Many businesses start with a verification which is a very expensive exercise. If you want to know what you score is rather calculate it yourself. If you have a scorecard already prepared you should find your verification to be quite smooth. The only additional information you will need will be the small amounts of sampled data that the verification agency selects.
Preparing for a verification has become more of a science for us. Selecting the best agency, preparing documentation and speeding it up all while earning more points.
Broad-Based Black Economic Empowerment (B-BBEE) compliance is a process and should be viewed as long-term as opposed to a short-term once off event.
At EconoBEE, we offer various solutions to assist clients achieve a compliant BEE Status.
Our Managed Service is an ideal solution for any business wanting to save time on implementing B-BBEE. Through our Managed Service we assist clients prepare a scorecard for both last year and the future year with the view of constantly improving the number of points on the scorecard. Since our view is based on a long term view we are able to continuously keep track of progress, advise on important changes as and when the changes happen and ensure success through every single transaction – EconoBEE Newsletter dated Friday 22 November 2013.