The Key to a successful B-BBEE rating

The key to B-BBEE is the scorecard and the points that you need to unlock the scorecard.  Smart businesses identify strategies to increase and optimise these points as these are a reflection of the company’s own activities and decisions.

Preparing for your verification primarily takes the form of a BEE scorecard and a file containing  the  documentation  you  need  to  prove  that your  scorecard  is  correct.  By  preparing  early  for  your verification,  you  will  save  time  and  money  and  you  should not  be surprised by a scorecard that is lower than expected.

Tips to remember when you prepare for your verification:

  1. Ask  yourself  the questions: “how  much  will  a  bad  verification  cost  the  company”  and  “how much is an extra point or extra level worth?”
  2. Your scorecard should always be top of mind, understand it and it will improve.
  3. During the verification, the BEE Auditor cannot help you earn points. The auditor’s job is to “audit” your BEE documentation.
  4. BEE is not difficult but it does take some time and the right documents need to be collected to prevent scoring fewer points than you deserve.
  5. A  self-assessment  provides  a  good  opportunity  to understand the effects of BEE on the company, so that you know where  to  find  additional  points and what changes should be made to achieve more points.
  6. The  verification  process  is  detailed  but  should  not  take  months. You  will  receive  your  scorecard  without delays if  you  have  the data available  and  you  are  able  to  respond  appropriately.

Tips to maximise Ownership points:

  1. Identify a black new entrant as a shareholder in the company and you could earn a bonus point.
  2. Encourage investment from companies that are black-owned.
  3. If a company has ownership in the form of a pension or insurance fund, it can be excluded from the calculation, which would increase the percentage of black shareholders.
  4. Ensure that the shares are fully paid up, else you could lose a significant amount of points.
  5. Include women and ownership schemes.

Tips to maximise Management Control points:

  1. Appoint more black people into management, with more emphasis on black women. Black women qualify for enhanced recognition through the Adjusted Recognition for Gender.
  2. Appoint black independent Non-Executive Directors to score a bonus point. 

Tips to maximise Employment Equity points:

  1. Appoint more black people into management, with more emphasis on black women.  Black women qualify for enhanced recognition through the Adjusted Recognition for Gender.
  2. Generic companies that have a flat organisational structure (do not distinguish between Middle and Junior Management), may consolidate the targets for Middle and Junior Management categories into Junior Management.
  3. Appoint more black disabled people, also with emphasis on disabled black women. If you also spend time and money training the black disabled people, you will earn up to 3 points on the Skills Development element.

Tips to maximise Skills Development points:

  1. Place disabled black employees on learnerships or Category B, C and D learning programmes, especially black women. This means that the company will earn points on all three indicators of the Skills Development scorecard.
  2. The salary of the employees who are learnerships can be taken into account, therefore registering employees on learnerships earns the company maximum points.
  3. Keep a record of all category G training. This is in-house training that occurs all the time. The cost to company is the hourly rate of the person doing the training (trainer) and not the person receiving training (trainee).
  4. All the costs associated with the training are taken into account, including the cost of travel, accommodation (if overnight), food and refreshments.
  5. Skills Development is adjusted for gender so allocate more training spend to black women.

Tips to maximise Preferential Procurement points:

  1. Purchase goods or services from the company’s Enterprise Development beneficiary.
  2. Procurement spend incurred with the beneficiary is multiplied by a factor of 1.2. For instance, if R1,000 was spent on buying goods from the Enterprise Development beneficiary (who is a black-owned  EME, Level 3 BEE contributor and has a procurement recognition level of 110%), the recognised procurement spend would be: R1,000 x 110% x 1.2 = R1,320
  3. Purchase goods and services from black-owned and black female owned suppliers.
  4. Purchase goods and services from Value-Added Suppliers to further increase the procurement spend by a factor of 1.25.

Tips to maximise ED points:

  1. Invest in black-owned businesses as a recoverable Enterprise Development initiative.
  2. Give an Enterprise Development beneficiary a desk in your office (or access to your company infrastructure) and give him access to a computer, internet and telephone. 

Tips to maximise SED points:

  1. Donate time, monies or goods to charitable organisations that assist predominantly black communities (e.g. schools, child care facilities and community upliftment programmes).
  2. Offer goods that are in line with your business, for example a food store can donate food to a school’s tuck shop or a furniture company can offer to mend broken desks free of charge.
  3. Paint a school and not only will you incur costs in paint and equipment, but this can also be used as a team building exercise.

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2 Responses so far.

  1. KAVITHA says:

    pse send me a copy of the return of earnings form, 2012 to my email adress,kavitha@fei.co.za
    so i can complete it timeously

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