If you are new to the process of Broad-Based Black Economic Empowerment (BBBEE or BEE) accreditation, it may seem complicated, even overwhelming. But in reality, it doesn’t have to be. A good BBBEE verification agency can assist you with accreditation, ensuring your experience is smooth and hassle-free. But where do you begin? In this article, we explain how to get started on BBBEE accreditation so that you know where you stand and what to do.
As a first step, it is important to understand the relevance of BBBEE in South Africa, and how getting accredited can benefit your company. BBBEE policy is set out by the Broad-Based Black Economic Empowerment Act, No. 53 of 2003, as amended by the Broad-Based Black Economic Empowerment Amendment Act, No.46 of 2013. The laws are clarified by Codes of Good Practice. The legislation was enacted to ameliorate the lasting negative economic effects of apartheid. BBBEE is designed to empower disadvantaged groups to participate more equitably in the economy, helping to boost the transformation of society.
BBBEE accreditation not only shows that you are committed to the betterment of the country as a whole, but confers various benefits on your company. These include the ability to tender and the ability to conduct business with government (at municipal, provincial and national levels), opening up potentially lucrative contracts. Another advantage is access to chains of preferential procurement. BBBEE compliance gives you a competitive edge, as it increases the likelihood of being sourced by other businesses who need to use their designated BBBEE budget.
So what is the first step in the accreditation process? You need to start by selecting an accredited, reputable BBBEE verification agency. While it is possible for smaller businesses to take care of BBBEE compliance themselves, if it is your first time, a consultation is advisable to ensure that everything is taken care of correctly. Working with experts will give you peace of mind.
During the consultation, the agency staff will talk to you about the size and classification of your business. You will be classed as either an Exempt Micro Enterprise (EME), Qualifying Small Enterprise (QSE), or Generic Enterprise (GEN). Most family-run businesses fall into one of the first two categories. The classification is determined by your company’s annual turnover. EMEs are entities with annual turnover of under R10 million, QSEs are those with annual turnover of between R10 million and R50 million, and GENs are very large enterprises bringing in more than R50 million a year.
Once your business has been classified, the agency staff will discuss the requirements for compliance with you in detail. They are different for each category, with EMEs subject to the lightest requirements, and GENs subject to the most stringent, in-depth requirements.
Your consultant will explain the documents you need to produce and actions you need to take to ensure BBBEE compliance, and they will advise you on the BBBEE scorecard ranking you are eligible for. There are eight levels, with one being the highest and most beneficial. They will also be able to guide you through the processes of improving your ranking going forward.
To get started with your BBBEE accreditation, contact a Cenfed consultant today.