Small businesses are the lifeblood of our country. Not only do they account for R2.3 trillion of business sector turnover in South Africa, but they have a ripple effect when it comes to employing and upskilling as much as 60% of the country’s workforce, according to a study by McKinsey.
Of course, these small enterprises are also those at greatest risk when disaster strikes, such as the COVID-19 pandemic. For many SMMEs, the contraction in the economy as a result of the pandemic and various lockdowns, has been devastating.
Such businesses, especially in critical times like these, must have liquid capital both in order to continue offering services, and in order to stay afloat during tough times.
A facilitator of SMMEs
Government is a large supporter of small businesses, not only through legislation, but also by making use of them as contractors across sectors and verticals, particularly in the case of municipalities.
Despite being a proud proponent of small business, government unfortunately has increasingly gained a reputation of lagging in payment to suppliers, despite Treasury’s mandate that all invoices be paid within 30 days of receipt.
In large part this lag is due to paper-based processes and legacy systems. When invoices sit on a supervisor’s desk, they can get lost, misplaced, or simply just forgotten. When budgets are tracked on outdated systems, there may be no cash to pay for services rendered. For small businesses, this can mean jobs lost, or doors closed.
The solution lies in digitisation
Government understands the essential role that small businesses play in the cogs of the public sector and has thus sought to resolve this ongoing challenge across provinces and municipalities, starting with the digital tracking of payments and invoicing.
Boxfusion’s Payment and Invoice Tracking module allows for the automation of payments by ensuring from the start there is sufficient money to pay suppliers on time and within budget, and ensures that departments are compliant with Treasury’s regulation while supporting small businesses.
Transparency and regulation
By digitising this process, the entire payment system becomes transparent, with each supervisor and manager having insight into the process from start to finish. It results in cleaner audits within a public sector entity, and is easy to implement and deploy, both on its own and when integrating with existing legacy systems.
For example, in the province of Mpumalanga alone, Boxfusion’s invoice tracking module was deployed across 12 departments within six months, involving 32 000 users and impacting over 10 000 vendors to government. The results were immediate and overwhelmingly positive.
It is a prerogative of government to create a space where small businesses can thrive, and to support those small businesses in whatever ways possible. A transparent invoice and tracking system is one of the most effective ways to ensure that these important entities can continue to grow and thrive in the South African economy.
Let’s talk about how we can assist you in digitising your invoice process today.