There are many Small, Medium and Micro Enterprises (SMMEs) doing honest deals with government, through a legal, transparent process of procurement and Tendering.
But the truth is that by far the majority of SMMEs steer well clear of government even though BBBEE and tendering rules favour them. As important as it is for tender processes to be above board for SMMEs who find these processes onerous enough, SMMEs generally don’t look for business from Government at any level for a much more critical (to them) reason. They do not on average get paid on time by public institutions.
And as a result, over 80% of SMMEs don’t do business with government at any level.
This was among the findings of the 2016 SMME Insights Survey conducted by SAICA, which is the most recent research on the topic by the institution.
The SMME Insights Survey is a substantive study, which has been conducted annually since 2014. The average turnover of these enterprises is R10.9 million, with a third employing between six and 49 people. These companies are, according to the National Development Plan, the country’s only hope of reducing unemployment and poverty and of boosting our failing levels of gross domestic product.
Among the survey’s critical conclusions is that SMMEs (and by extension our country) could flourish if the tender process was simplified and made more transparent, and if government and big business paid their accounts on or before 30 days.
“Providing public finance management capacity building support is a priority at SAICA,” says Julius Mojapelo, Senior Executive for the Public Sector, SAICA. “This involves collaboration with public sector institutions to help them improve financial management systems and processes to ensure sustainable service delivery.” Paying SMMEs on time would be one of the outcomes.
“SAICA is also educating SMMEs and SAICA members who interact with SMMEs on the process of doing business with government. This makes it easier for SMMEs to tender for contracts.”
Facilitating payment of long standing government debtors
Mojapelo sympathises with the plight of SMMEs, struggling to get payment from government. “The Small Enterprise Development Agency payment assistance hotline is a very important platform that SMMEs can use to facilitate payment of long outstanding payments from public sector institutions (www.seda-smme.co.za),” says Mojapelo.
The continued growth of SMMEs rests on government’s commitment to delivering on tender and payment policy. Everyone’s a winner when we create jobs through transparent tenders, fairly awarded, and where work is paid on time.
SMMEs wanting to report slow payment by government may call 0860 766 3729.
More information from www.saica.co.za