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Maximise your BEE
Points |
Maximise your BEE Points
Most people know that the number of BEE points you earn
measures BEE compliance. The more points you get, the higher
the level, the better your compliance. This is just like
sport - say rugby where if the Sharks had scored more points
on Saturday they would have won. It’s only in golf where
golfers try to get as few shots as possible! In BEE terms
there are techniques to maximise those points earned, and
various strategies than can help you.
Here are 15 quick ways to get more BEE points:
- If your supplier is a “value-added” supplier you can
inflate your procurement spend with him by an extra
125%.
If the supplier is also your enterprise development
project, you can inflate your procurement spend by a
further 120%.
If your enterprise development project is a category
A beneficiary( QSE or EME and more than 50% black owned)
you can inflate your ED spend by 125%
If you earn points via skills development you must
ensure that you have complied with all aspects of the
skills development act, else you will earn no points,
even if you spend in training.
If you train staff via Category B, C or D training
programmes (learnerships), you can earn up to an
additional 6 points on the generic scorecard.
Category B,C, or D training allows you to claim the
cost of employees’ salaries as training expense.
You can claim legitimate training expenses including
travel, facilitators, admin, facilities etc if you log
those activities. Don't forget in-house training - but
it cannot be more than 15% of your total BEE training
spend
You need to ensure you keep records of the BEE
status, gender, even disabled status of your employees,
and their job level as per the codes if you want to earn
points on employment equity.
You will earn zero points for any BEE activity
unless you have sufficient documentary evidence of that
activity.
You therefore must
log every
activity you undertake in order to ensure you earn all
the points you deserve.
If you are earning points via procurement, and you
do imports, you must prove that those imports are of a
different brand or specification to those available in
South Africa to be able to exclude them from your
calculations and maximise points.
If your business has black ownership
(black/coloured/Indian SA citizens), you need to ensure
that this includes black females, new entrants and black
“designated” people to optimise points.
If the shareholders have any debts owing on those
shares, or are going to have, you should ensure that
they meet the repayment schedule in order to earn points
via Net Equity Value.
Additional points can be achieved in Preferential
Procurement if you focus some of your spend on QSE/EME
suppliers and black owned suppliers
Employment Equity has a 40% sub-minimum, if you
don't reach this target you run the risk of not earning
points you have already earned.
It may sound quite technical, with quite a bit of
mathematics, but to us it is second nature. We can help you
in all areas of BEE to maximise those points and become more
compliant.
Contact us
and be pleasantly surprised how easy it is to get the job
done.
Need to be BEE
Compliant – Why?
Whenever a customer asks you for your BEE status you
should try and answer them. You should answer them for the
same reason you answer any customer query – to give good
customer service. When replying to your customer you
are giving him what he needs to do business with you.
What does the law say – do you have to be BEE Compliant?
What happens to you if you don’t produce a BEE Scorecard?
The B-BBEE Act makes BEE implementation compulsory only
for Government and associated agencies. It is voluntary for
all other enterprises. However if you do business with
Government they must ask you for a scorecard and by
implication if you do not have a scorecard then Government
cannot do business with you. If you are not doing business
with Government you do not have to produce a BEE Scorecard.
It is entirely voluntary for one business doing business
with another to supply a BEE Scorecard.
Although you don’t necessarily have to produce a
scorecard, the reason you do is because your customer might
supply government. Their scorecard depends to some extent on
your BEE status and as a result by giving a scorecard to
your customer you are giving that customer good service and
helping them keep existing business with government. A BEE
Scorecard is good service and it makes Good Business Sense
to give your customer what they need.
The BBBEE Act is voluntary for businesses and compulsory
for government but ultimately does not make any provision
for penalties, if you don’t follow the act and don’t produce
a BEE Scorecard – you run the risk of losing business.
Why does your customer want your score?
This falls under Preferential Procurement – your
customers are earning or losing points by dealing with you.
If your customer chooses to earn points with Preferential
Procurement then they will need your scorecard. By simply
preparing a scorecard and giving it to them you are helping
them improve on their scorecard. Similarly, you then need to
ask your suppliers for a scorecard so that you can give your
customers a good scorecard. If you do not give your customer
a scorecard you will be taking points away from them.
Why is a Good Score Important?
The Preferential Procurement calculation depends on the
value of goods purchased and the BEE recognition level (the
points that the supplier has earned). Up to 50% of
procurement currently must come from B-BBEE Compliant
suppliers (based on the recognition table below):
|
Contribution Level |
Qualification |
BEE Recognition Level |
|
Level
1 Contributor |
> 100
points |
R1.35
for every R1 spent |
|
Level
2 Contributor |
>= 85
points but < 100 points |
R1.25
for every R1 spent |
|
Level
3 Contributor |
>= 75
points but < 85 points |
R1.10
for every R1 spent |
|
Level
4 Contributor |
>= 65
points but < 75 points |
R1.00
for every R1 spent |
|
Level
5 Contributor |
>= 55
points but < 65 points |
R0.80
for every R1 spent |
|
Level
6 Contributor |
>= 45
points but < 55 points |
R0.60
for every R1 spent |
|
Level
7 Contributor |
>= 40
points but < 45 points |
R0.50
for every R1 spent |
|
Level
8 Contributor |
>= 30
points but < 40 points |
R0.10
for every R1 spent |
|
Non-Compliant Contributor |
< 30
points |
R0
for every R1 spent |
It is ideal to give a score of greater than 100 points
(level 1) to the customer but in reality it can be extremely
difficult to get all 100+ points. Most people realise this
and will be very happy with a response or any score above 30
points. If on the other hand you are a major supplier then
your score alone could determine how many points they will
earn on Preferential Procurement.
To satisfy your customer, you should give them a detailed
scorecard (a complete breakdown of how you achieved BEE
Compliance) and when required have all relevant
documentation to give them absolute confidence in your
scorecard.
Remember, Preferential Procurement is used to earn points
- don’t give your customer an excuse to go somewhere else.
Need to be BEE Complaint? Contact an expert to help guide
you through Broad Based Black Economic Empowerment. EconoBEE
has developed
tools and
services to
help you Become BEE Compliant in a quick and easy manner
with accurate documentation to assure your customers of the
best possible scorecard.
The more points you get, the better it is for your
customer.
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The President of the Zululand Chamber of
Business Garth Macartney, stated in his press release that the
re-affiliation to SACOB is in the best interest of its members
because of SACOB’s great influence and its representation on a
broad range of business stakeholders in South Africa, not just
in the chamber movement, but also legislature. The move is to
encourage business unity and transformation, which is key to
achieving our mandate as business representatives.
Watch this space
for more on the ZCB and SACOB relationship.
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The
purpose of this Summit is not to criticize. The purpose
is to gather constructive contributions from as many
role-players as possible, and to, as a joint initiative
after today, agree on the need and ways to address
current and future developmental planning delays which
causes unnecessary delays in delivery of development.
Click Below
to download the appropriate documents
prepared by
Frans van der Walt |
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Background
Document |
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Background -
Presentation |
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Click here to download more information
on the Summit |
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Dismissals and the
CCMA |
Time for
business owners to stand ground at CCMA - Adapted from a recent
edition of Gauteng Business
The time is right for business
owners to put up a fight at the CCMA, now that the Labour Court
has come out strongly against the overly technical approach by
the CCMA that has up till now made it very difficult for
business owners to fire someone, says well-known labour law
researcher Andrew Levy.
Click here to download the full
article
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