To begin with, don't let the terminology intimidate you. VoIP is really just a complicated way of describing a communications system that allows you to abandon your current telephone system and replace it with one that passes through your business' internet connection.

The primary reason many small businesses are switching to a VoIP system is cost. Savings vary from firm to firm, but the industry reports an average savings of 30%. Given the cost of commercial phone service these days, that's not an insignificant amount. It's a good chunk of change that can be reinvested in other areas of your business.

One of the best benefits of a VoIP system is that calls placed over a private network are free. This is a vitally important consideration if your business has more than one office. With a private network connection between offices, it will cost you nothing to stay in touch on a near-constant basis.

Another benefit of VoIP is its extreme portability. Employees don't necessarily need to be in the office to receive calls because calls can be forwarded anywhere the employee has access to a computer. A VoIP system could keep your employees connected wherever they are - at home, on the road, or even stationed at the beach with a laptop.

Switching over to VoIP does have some costs. Although you will save money on your monthly communication costs, you're going to have to lay out some cash up front for equipment purchases. VoIP phones run several hundred dollars each. On the positive side, you will be able to retain all the features of your current phone and prices are coming down as VoIP gains popularity.

Quality is also a consideration in VoIP technology. VoIP users report that for the most part, you will not notice any change in the quality of service. But because it is transmitted over the internet, you will occasionally experience quality disruptions during times of heavy internet usage.

A good gauge of the frequency that you might encounter these disruptions is to consider how often you experience congestion on your internet service now. If internet congestion is a relatively common occurrence at your company, then you may want to either consult an expert to determine what can be done to improve your connection or forget about VoIP altogether.

Even if you decide that a complete transition to VoIP is not practical for your company, it's probably worth your while to explore the possibility of a blended communication system in which you use traditional phone service for the bulk of your calls, but maintain one or two VoIP phones for long distance.