December a Time for Relaxing – EconoBEE Newsletter December 2007
December – a Time for Relaxing and Accounting
Accounting is something that has always been close to our hearts. When EconoServ started, we created EconoAccounting and shortly afterwards EconoAccounting Lite which are absolutely excellent tools for small businesses to use to keep their accounts up to date, with almost no work.
December tends to be a slow, relaxing time of the year. Companies close, but it is also a great time to catch up on some admin work that has been put off for the last 6 months. We all have those jobs that we don’t want to do, well December is a great month for catching up the accounts, filling in a tender, registering as a vendor with your customers and even preparing your BEE Scorecard.
EconoBEE Franchise Opportunity
EconoBEE is launching their latest business opportunity aiming at businesses who want to participate in the BEE industry. This opportunity is targeting professionals like accountants and consultants. These professions are ideally positioned to assist companies with both a verified scorecard and preparing a BEE Scorecard.
Visit our website for additional information or phone us to schedule a meeting to see if you qualify to be an EconoBEE Franchisee.
The CA Charter is Launched
The CA Charter (chartered accountancy profession charter) has been approved by the charter council and will be forwarded to the dti for gazetting in terms of section 12 of the act.
Congratulations to all concerned!
This is certainly the best charter we have seen so far. It follows the dti codes of good practice, but where appropriate it has differing weightings. For example accounting firms do not do that much procurement so the weighting for procurement has dropped to 10 points. On the other hand, it has been identified that there is a serous shortage of black chartered accountants so both skills development and employment equity has been increased to 20 points each from 15 points. The extra 5 points on skills development is earned by spending on bursaries to encourage more entrants to the profession.
Enterprise development still has a weighting of 15 points, but the charter recognises that accounting firms do not necessarily show profits – most profits are paid to partners in the form of salaries or bonuses. As a result the target is now the higher of 3% of NPAT (net profit after tax) or 0.375% of turnover. This implies that a firm with an annual turnover of R10 million will earn ED points if it spends at least R37 500 (0.375% of revenue) on ED.
This is a good charter in all respects – it follow the codes and the definitions and uses good arguments and empirical evidence where it needs to change the weightings.
It even recognises the role of verification agencies:
Verification of compliance
1 In terms of statement 000 of code series 000, verification of B-BBEE compliance is encouraged and to this end the dti will from time to time issue clear guidelines on the verification process.
2 The Charter Council will report to the dti annually on the consolidated position of the CA sector. It will thus be incumbent on the CA sector to provide the Charter Council with their individual scorecards. These scorecards must either have been verified by an accredited verification agency, or the relevant entities should be able to provide evidence or documentation to substantiate all measured items.
The charter is saying that a firm can use either an accredited verification agency or must be able to provide evidence to substantiate all measured items.
A Guide for Verification Agencies (draft)
The dti has issued a document called “Guide for Verification Agencies “, dated 31st October 2007.
On investigation, the dti informed us that this is a draft document, and they have no intention of distributing it in its current form. The document itself purports to be a complete work, and was sent to us by a verification agency as proof that our stance against ABVA is wrong.
In terms of the FAIS act, our readers have a right to see this draft document, as it contains information that could be disastrous to BEE in South Africa.
We will be issuing comment on this document – please keep an eye on our website.
Initial areas of Special Concern and comment:
A Message from EconoServ
The year of 2007 – Pioneering BEE in South Africa. This year was the first that we could truly say BEE has started. Although it has been a bumpy year with companies still finding their feet – to verify or to consult with the odd company doing both. It has been one filled with innovative ideas which has helped BEE compliancy build up to the point it is at this moment. BEE or more accurately Broad Based Black Economic Empowerment still has many years to go, and all companies involved with BEE still need time to truly understand B-BBEE in order to comply with it in the most effective way.
It is our company’s aim to help companies understand BEE – help them work through and manage all aspects of BEE, to ultimately produce a scorecard that will help their customers get more Preferential Procurement points.
We would like to whole heartedly thank every one who sent us good wishes during the year. Our customers who continue to happily and successfully use our services, our associates who we have learnt from and who we have helped and every one we have come in contact with during the year.
We wish you all Compliments of the Season and a very successful and prosperous 2008.