Don’t Delay On New BEE Codes

Don’t Delay On New BEE Codes

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Keith Levenstein, CEO of EconoBEE, says although the amended codes state that they will only come into effect after a one year transition period, 10 October 2014, the reality is that companies will need to prepare as soon as their new financial year begins.

In other words, if their financial year-end is February 2014, companies will need to start working on the new codes from March 2014.

A business whose year-end was September 2013, would have already started its financial year before the new codes were announced, and would therefore need to be applying the new methodologies of the amended codes.

Break BEE into stages

B-BBEE compliance can be broken into a few core phases comprising:

  • The previous financial year period, which is used for verification
  • The future financial year period, which can be used to maximise points or refine methods of earning points.

Levenstein suggests that businesses structure the process as follows:

  1. Employment Equity and Procurement
  2. Skills Development
  3. Enterprise Development
  4. Socio-Economic Development
  5. Ownership – this is last on the list because ownership doesn’t change that often.

“Businesses are now able to start producing their first preliminary scorecard where the score, in all likelihood, will be low. This is normal for most businesses, however, it is a good starting point. Work can then be done towards increasing the score in line with business strategy,” says Levenstein.

The final step is verification. Many businesses start with verification by using an outside company which is an expensive exercise. To know your BEE score, rather calculate it yourself or use a software system and then address areas where additional points can be scored.

 

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Only then should formal verification be done through a recognised verification agency.

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