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The Virtual Payroll project began as a business plan written by Rey Monzon in April, 1995. At that time, all payroll processes were paper-based and client input was accomplished by phone, fax, mail and modem. These were the traditional methods that had served the industry well for many years. However, four distinct developments happened that pointed to a new paradigm in payroll processing.
First, by 1995 the direct deposit of net pay for employees through the Automated Clearing House (ACH) system became pervasive. Roughly half the work force uses direct deposit and it was (and is) considered to be a safe and reliable method of paying employees electronically.
Second, the Internal Revenue Service mandated electronic payroll tax filing (EFTPS) for semi-weekly depositors which eliminated deposit coupons and paper tax returns. This forced both payroll services and their clients to accept online filing and depositing of payroll taxes. Electronic tax filing is now the norm for federal deposits and an increasing number of states.
Third, client/server software became the preferred method for payroll services to receive input from their clients. This method places the payroll software on the client's desktop computer giving the client total control over entering new hires, making file changes and entering payroll. Files are sent and received via a direct modem connection. This development introduced clients to the concept of doing their payroll "online". Payroll services promote employer self-service because it lowers their labor cost in that customer service personnel no longer have to rekey the client's input. In short, the client does all the work.
Last, and most important, was the development and general acceptance of the Internet as a viable and secure input and delivery system for information. The advent of the web browser was a huge improvement over the problems involved in installing and maintaining proprietary software. The fact that web browsers are cross-platform added to the benefits over client/server and opens up new markets (like Macintosh, Unix and Linux users) that have been previously ignored. The advantages of using the Internet are now well-established, but back in 1995 no one was using the Internet to process payrolls.
Virtual Payroll changed all of that. By putting together the four component parts of the puzzle (direct deposit to pay the employees, EFTPS to pay the employer taxes, online payroll processing, and the Internet for input and delivery), Virtual Payroll was able to create the first completely paperless (and checkless) online payroll system. Virtual Payroll was widely recognized in the press for having invented a new paradigm in payroll processing.
The company was incorporated in the state of Florida in September of 1996 and the fully functional web site was launched in March, 1997. Virtual Payroll has continued to fine tune, enhance and improve its web interface. In addition, Virtual Payroll has gained valuable experience as it pioneered the web-based payroll industry. Recent entrants to this field are only now beginning to deal with problems we solved years ago. Virtual Payroll is respected as a leader in browser-based payroll technology.
Copyright © 1996-2006 Virtual Payroll. All rights reserved.
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