Enterpriseand Supplier Development: So similar, yet so different

Supplier and Enterprise Development might create confusion as they are mentioned together in the BEE Codes. They are however entirely different with only some similarities here and there.

One of the most important indicators is that they both have their own subminimum requirements. This clearly showcases the importance of each of these elements in their own capacity. Enterprise development and Supplier development are both priority elements in the B-BBEE codes and thus 40% of the total points of each element must be obtained.

Let’s look at each of the elements in its own form:

Supplier Development

• Beneficiary MUST be a Supplier of the measured entity
• Beneficiary must be a company, not an NPO, NGO
• 40% of the subminimum must be reached
• Can contribute 10 points to the scorecard

Enterprise Development

• Beneficiary may not be a Supplier of the measured entity at all
• Beneficiary must be a company, not an NPO, NGO
• 40% of the subminimum must be reached
• Can contribute 5 points to the scorecard‍

Contributions to Beneficiaries

There are various ways to contribute to these beneficiaries, which include the following:

• Grants/monetary donations
• Interest-free or standard loans
• Discounts on goods or professional services rendered
• Indirect costs
• Employee or professional time spent
• Favourable payment terms on invoices (capped at 15% of total points)

It’s important to ensure that specific documentation is compiled and signed by both parties, clearly stating that the contribution was for the purpose of Enterprise or Supplier Development. This documentation may include:

• An agreement
• A confirmation letter
• Proof of contribution
• The beneficiary’s BEE Affidavit

For more information on how to maximise these points for your BEE scorecard and what types of contributions will be recognised, contact Elevate Advisory Partners at info@elevateadvisory.co.za.