Once a year, the General Teaching Council for England (GTC) collects a membership fee from over half a million teachers. To take care of this task in the quickest, most secure and cost-effective way, they rely on The Royal Bank of Scotland’s Commercial Lockbox service.

Background

Set up in September 2000, the GTC is the new professional self-regulatory body for teaching in England. Its principal aims are to raise the status of the teaching profession; provide a professional voice for teachers; listen to and work for teachers; and guarantee high standards of teaching and learning. All teachers in maintained schools are obliged to join the GTC. There are currently 520,000 registered teachers - making the GTC the second largest professional self-regulatory body in the UK. "I’ve got to collect a low value annual fee from a high volume of customers - a £23 fee in 2002 from 520,000 teachers," says Derek McMahon, the GTC’s Finance Manager. "My key objective is to keep our costs of collection as low as possible."

The GTC’s preferred method of payment is direct debit, but payments are also made via salary deductions as well as by debit or credit chard and cheque. The bulk of these payments come in a huge wave once a year around the annual fee payment date of 1^st April. There is also a mini-peak in September/October when newly qualified teachers register. "What I needed to do was put in place the most cost-effective system to cope with that," says Derek. "If I’d invested in setting up a cash office it would have sat there not doing very much for two-thirds of the year. Then it would suddenly have to deal with a massive volume of work. That was when I thought, hang on a minute - there must be a more efficient and effective way to do this. So I approached the Royal Bank and said can you set something up to deal with this?" The Bank suggested their Commercial Lockbox service and the GTC started using it in May 2002 in time for their first round of payment collections.

"There were really two parts to it," says Derek. "One was the physical handling of the payments - the processing and banking through the payments system. But there was also the capturing and sending of data so that we could quickly update individual teacher accounts in our accounting system. So it wasn’t just about the payment processing but also the transmission of data electronically to us. This is really where the Lockbox solution came into its own. It provides a fast, efficient and economic end-to-end collection service."

"We have a fulfilment contract on the billing side, so we give the core data to the contractor and they generate the individual pay notices that go out to the teachers. The contractor then provides Lockbox with a validation file of what they’ve sent out so that when Lockbox starts getting individual payments back in they aren’t just keying that data raw, they can validate it against the file."

"Lockbox stream data back to us on a daily basis electronically. So for example they might send us a file saying we’ve received 2000 payments today for these 2000 teachers. We automatically pick that data up via our secure bank mailbox and automatically import it into our accounting system to update those 2000 records in an instant. So the morning after Lockbox has processed the payments for us, if one of those teachers was to phone up and say ‘have you received my payment?’ we can say ‘yes we did thank you very much’."

"In the meantime, Lockbox batch the payments and pay them directly into our bank account. So the other part of the data that comes back to us is the banking side of it - that allows us to do our electronic bank reconciliation as well."

"If there’s any problem, for example no signature on a cheque, that doesn’t need to come back to us because Lockbox has the validation file that allows them to immediately fire a letter off on our behalf asking the teacher to sign and re-send the cheque."

"Lockbox also batches up and passes on to us any correspondence that comes with the payments. What’s more, they prioritise any items that need our immediate attention so we can deal with them first. It’s that kind of added value that helps us in turn deliver a better service."

"One of the other things that Lockbox is handling for us is the processing of setting up direct debits. They receive the mandate forms from the teachers, capture the data, do a basic data validation, and send it through to us daily into our secure mailbox. We import it into our BACS software for further validation before we send it off to BACS to set up the direct debit instruction."

"The turnaround time is the critical factor. They’re handling high volumes quickly, securely and efficiently - getting the input, processing it and electronically giving us the data so that we can automatically keep our systems up-to-date."

"We have invested heavily in technology solutions, so we were looking for a partner in this area who could not only deal with the operational processing side but could also give us the information that allowed us to capitalise on our investment in technology and systems. Lockbox provides this end-to-end solution."

If you would like to know more about Commercial Lockbox or any of our other services, please contact your Relationship Manager or visit our website: www.rbos.com