With the revised Codes of Good Practice, South African businesses will need to work harder to maintain their Broad-Based Black Economic Empowerment (B-BBEE) scorecard. Complying with the revised codes is a complicated process, that’s why LEAP has developed a procurement analysis tool.
One of the biggest changes has been the reduction in elements from seven to five: Ownership, Skills Development, Enterprise and Supplier Development (E&SD), Management Control and Socio-Economic Development. The first three are priority elements and a business must achieve a subminimum of 40% in each of these categories in order to avoid their B-BBEE level dropping.
The E&SD category is a merger of Enterprise Development and Preferential Procurement, and with the new, tough compliance requirements, businesses need to have a fundamental shift in their procurement policies. Procurement is a key consideration in determining a company’s B-BBEE rating, and if you don’t constantly monitor it, you run the risk of losing your current rating. This will happen even if your company has performed well in the remaining four elements on your scorecard.
Understanding how the revised codes will impact your business can be daunting, and that’s why LEAP has put the effort into developing a procurement analysis tool. The tool will collate your data and simplify the complicated calculations that are needed to see how the revised codes effect your B-BBEE rating. The implementation date for the revised codes is 1st May 2015, and this is why it’s important for companies to use a procurement analysis tool, to ensure the necessary criteria are met, particularly ahead of an audit for your B-BBEE certification.
The tool provides concise monthly reports so that a business can immediately distinguish between higher end B-BBEE recognition and non-compliant suppliers. This data allows you to immediately start your procurement optimisation, which highlights those suppliers who do not add value to your overall procurement score. With the tool you get a clear analysis of the targets your company needs to reach, in terms of Rand spend per category, e.g. R1 234 000.00 outstanding for spend, with 51% black-owned business.
With LEAP’s procurement analysis tool you can rest assured that your procurement compliance will be taken care of, and your business will be geared up for the changes to B-BBEE codes.
Business owners who want advice and assistance in complying with the revised B-BBEE codes should contact LEAP on 011 449 7074 or visit www.leapco.co.za.