In this article, Small Capital's BEE expert, Bruce Rowe, explains what this accreditation means and how it affects you as an SME owner.
By Bruce Rowe, Small Capital panel expert
It has been a long wait, and I am relieved to read that the South African National Accreditation System (SANAS) has finally announced the first 11 BEE rating agencies to be accredited by the association to date.
This means that each of these agencies has met the legislative requirements to become an accredited verification agency. All have had to comply with stringent audit methodologies and are now deemed to be competent in verifying the BBBEE status of companies.
All the accredited agencies are members of an organisation called the Association of BEE Verification Agencies (ABVA). The ABVA website www.abva.co.za lists the agencies that have been accredited.
Agencies that have not yet been accredited, but which have applied to SANAS for accreditation and have successfully gone through the Pre-Assessment Phase, will be issued a Letter of Acknowledgement (LoA) from SANAS. They can use this to confirm the validity of the certificates they have issued.
In other words, if you have received a BEE rating from an agency that is not yet accredited, make sure you ask them for a copy of this LoA.
The Department of Trade and Industry (the dti) continues to maintain their position that all BEE certificates that are supported by sufficient evidence should be accepted as valid.
In other words, if you have conducted your own assessment of your business's BEE status according to the dti's scorecards, and if you have all the supporting documentation to substantiate your claims, then this rating is valid.
However, in reality, many companies continue to demand BEE certificates from their suppliers, insisting that these certificates are supplied by a rating/verification agency.
So, what does this all mean for you?
While it seems prudent to appoint a verification agency to verify your scorecard, this costs money, which some organisations can ill-afford at the moment. Instead, I suggest that you compile your own BBBEE scorecard using one of many scorecard calculators available (for example on BEEToolkit.co.za) and submit the scorecard to your customers.
Make sure that you can substantiate your claims of BEE compliance with the appropriate evidence. For a handy checklist of what documents you are likely to need, visit the "Free tools & templates" page on this site, or click here.
I also recommend that you contact any clients who are requesting a copy of your company's BBBEE scorecard, and check whether or not they are prepared to accept your own scorecard evaluation (with supporting evidence, of course!).
I must note that, unfortunately, most of your clients will probably have been instructed by their own verification agency to only accept verified scorecards.
The good news is that you might not even have to go to all this trouble: if your company has an annual turnover of less than R5 million per annum, all you need to do to be recognised as a BEE-compliant company is to obtain a letter from your auditor that confirms the your company's turnover is below this amount.
That said, you might also wish to obtain a certificate indicating your "Exempt Micro Enterprise" compliance status (www.beetoolkit.co.za).
If you are looking for the scorecards of your suppliers, try the dti website. Over time, this will become a central repository of BBBEE scorecards.
If you are one of those fortunate entrepreneurs who has grown their business to beyond the R5 million mark, but if you are still below R35 million per annum, remember that you only need to measure your company's BBBEE compliance on any four of the scorecard elements.
And I can tell you with confidence that this makes it surprisingly easy to become BBBEE compliant!