How to maximize your B-BBEE scorecard

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Many businesses have not taken full advantage of the B-BBEE scorecard system. Companies may find themselves at a lower level once the proposed changes are approved. The changes include more technical code targets.


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Although B-BBEE (Broad-Based Black Economic Empowerment) scorecards have become a way of life for businesses in South Africa, many have not taken full advantage of how to maximise the way in which they operate within this system.
Nritika Singh, managing director of Isilumko Staffing, a national recruitment company, which offers temporary, flexible and permanent staff, says, "With the proposed changes to the points structure of the national B-BBEE scorecard, many companies that are currently comfortable with their status, may find themselves at a lower level once the changes are approved by parliament. At the centre of the proposals is having greater B-BBEE governance, with increased and more technical code targets.
"For example Employment Equity is currently worth 15 points. This is set to be consolidated with Management Control, while Preferential Procurement is to rise from 20 to 25 points. It is also proposed that Enterprise Development will go up from 15 to 20 points.'
Singh says that this means there is a greater emphasis on the compliance of suppliers. Those whose points account for less than a level 4 scorecard will only permit its clients to claim less than the actual amount spent.
There is a system in place for the verification of all companies from those with turnovers less than R5 million (Exempted Micro Enterprises) to those exceeding R35 million (Generic Scorecard Vendors). Turnover levels though determine the category into which a company falls and the comprehensiveness of the judging process.
Generic Scorecard Vendors are subject to an audit to determine the allocation of points per category. These categories (with the current points in parentheses) are: ownership (20), management (10), Employment Equity (15), skills development (15), preferential procurement (20), enterprise development (15) and corporate social responsibility (5) up to a total of 100 points.
"Officially a business or entity can claim to their benefit a percentage of expenditure spent with their suppliers, depending on their supplier?s contribution level and qualification, from Level 8 (procurement recognition level 10%) to Level 1 (procurement recognition level 135%).
Because Isilumko Staffing (IS) is now a Level 2 contributor the additional value that this provides our clients is significant when completing their Preferential Procurement section. Our clients can claim scorecard points that equate to R1.25 for every rand spent with us. Additionally due to Isilumko Staffing being 51,20% black owned and 37,50% black women owned as an entity, if a client nominates us as an Enterprise Development Beneficiary, the value increases to R1.50 for every rand spent with us.
For example, if you spend R10,000 with IS, you can claim R15,000 towards Preferential Procurement spend. The claim relates to an accumulation of points towards Preferential Procurement on their scorecard and is not a monetary claim. This offers enormous benefits to our clients towards improving their own scorecard rating.
"As an Enterprise Development Beneficiary up to 100% of your invoiced amount could count towards Enterprise Development if preferential payments are agreed. One can see that businesses need to take the B-BBEE structures seriously when setting up procurement from suppliers.
It is well known that using the B-BBEE criteria for procurement for all state or government departments is mandatory, however at the business to business level many opportunities are lost, often due to ignorance of the potential benefits. By ensuring that all 7 categories of the scorecard are annually reviewed, businesses can improve their B-BBEE level status and maximise their standing,' adds Singh.

At the recently held 9th Annual Top Women Awards, IS was the winner in the Top Gender Empowered Company category for Business Support Services. In addition, MD Singh was selected as a finalist in the Top Woman Executive Category. IS is 49.8% female owned and 73% of staff are female.
Singh concludes, "I?m so proud to be a finalist. It is our aim as a company to do our part in making the South African workplace more gender equitable.'
For more information please call 011 267 2920 or visit Isilumko Staffing

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