|Proposed BEE Changes Set to Save Business Millions|
The Minister of Trade and Industry has issued a proposal to amend the Enterprise Development and Socio-economic Development Element on the BEE Scorecard. The proposed change will remove the cumulative calculation of the two elements.
Currently a business wanting to prepare a BEE Scorecard using those two elements will need to reach a cumulative target since 2007 of 3% NPAT for Enterprise Development and 1% NPAT on Socio-economic Development per annum. This would result in a company producing their first BEE scorecard this year needing to spend approximately 16% of their NPAT to earn 20 points. This cost is excessively expensive to earn BEE points and was sure to drive businesses away from producing a BEE Scorecard.
The proposed changes will cut the cost of BEE Compliance down substantially and ultimately save business millions.
Find out how ED and SED can benefit your business
24th March 2011 at Gallagher Estate for a full day practical BEE Seminar – Practical Guide to BEE.
The price of the course is R3249 incl VAT per delegate which includes manuals, notes and practical information. This cost also includes tea/coffee and lunch.
Please contact our office on 011 483 1190 or email email@example.com for more information. Online bookings are available from www.econobee.co.za. Alternatively please download our booking form and fax it to 011 483 1195.
|ED and SED Proposed Changes – Technical Analysis|
The minister has gazetted proposed changes to the B-BBEE Codes of Good Practice.
The proposals are gazetted in terms of Section 9(5) of the act, which gives interested persons the opportunity of commenting for a period of 60 days from the date of publication of this notice. (18th February 2011).
The proposals affect enterprise development (codes 600/806) and socio-economic development (codes 700/807).
1) Enterprise Development – Shorter payment periods:
Change in shorter payment periods: The existing codes state that you can earn ED points by offering shorter payment periods to suppliers. The codes say that if you pay COD, you can claim 15/15 (i.e 100%) of the value of the payment. If you pay one day after receiving the invoice you can recognise 14/15th of the value. If you pay 5 days after receiving the invoice you can recognise 10/15th , ie. 66.6% of the payment value and so on. The old codes stated that you cannot go beyond 10 days for your payment.
The actual formula used is (15 minus number of days from date of invoice)/15
The proposed amendment allows you to take as long as 15 days to repay. It should actually be only 14 days though!
If you take 14 days to pay then you can recognise (15-14)/15 of your payment: ie 1/15th of the payment – 6.67% of the payment.
If you take 15 days to pay, the formula is (15-15)/15 = 0% which is why we stated that it can only be 14 days!
This is an extra dispensation given to companies and public enterprises that find it difficult to arrange payment as fast as 10 days. The extra benefit is very small though. If you take 12 days to pay an invoice to an approved beneficiary, you can only recognise 3/15th, ie 20% of your payment spend.
While there is demand for a B-BBEE Scorecard someone will be taking advantage, shouldn’t that someone be you…
02 March 2011
In this issue
- Proposed BEE Changes Set to Save Business Millions
- ED and SED Proposed Changes – Technical Analysis
EconoBEE is an expert BEE consultancy. EconoBEE helps businesses Become BEE Compliant, prepare for verification, earn maximum BEE Points and ensure that they achieve the BEE Level they need to get more business.
Our services include BEE Management Systems, Training, EME Pack, Complete Managed Services; consulting and advisory and Procurement Solutions.
As leaders in the industry we are driven to help maintain and develop knowledge in the BEE industry.
Already have a BEE Certificate?
Please send it to us and we will include it in our BEE Procured database.
Tel: 011 483 1190
Fax: 011 483 1195
We know how useful our newsletters are but you needn’t wait for our newsletters – follow us on Twitter, connect with us on Facebook or stay well informed by reading our BEE Blog.
Know someone who might be interested in the email? Why not forward this email to them.