Keeping up with acronyms is hard for the non-technically oriented. But anybody in business needs to become familiar with VoIP—Voice over Internet Protocol.

What it is not, as some think, is free calls over the Internet. What it is, is something that will change telephone systems in both the way calls are handled and how telephone calls are priced. It probably will, as an AT&T spokesman said, replace the 125-year copper wire system that we’ve been using.

Most people don’t need to know to need the technical details. The essentials are that VoIP uses the same method of sending information that is used to send data over the Internet. A telephone designed for a VoIP system has an IP address, just as every computer does when it’s equipped to use the Internet. The URLs that people use to reach the Internet are simply representations of a long string of numbers and a lot easier to remember. For communication purposes, that means that messages will find the phone wherever it is, whether on your desktop or plugged in to a hotel room when you travel. It also raises the promise of being able to keep your phone number for life.

IP telephony has been around for a long time at the enterprise level. It’s just now starting to become available to consumers and small businesses. It’s getting quite a push from AT&T, which has rolled out consumer service and is planning to introduce small business service this year.

Saving money, of course, is a big draw for businesses. Telephone service is not priced by the call, the system we are all familiar with. It is priced as a monthly fee, just like DSL or cable service, which you need to use VoIP. Also, VoIP calls are not subject to federal taxes or the access charges that few of us understand when we get our phone bills.

Just in case you think this is futuristic, accounting and reselling firms of all sizes are turning to VoIP. It’s not a mass movement, but it’s also being used by more than just the technology pioneers. Many of the firms implementing VoIP are using it for service between offices—making it possible to reach all firm employees by dialing a four-digit extension. Helena, Mont.-based Anderson ZurMuehlen, for example, is implementing such a system for calls between its five offices in Montana and Washington.

And if you have any doubts about the interest by the telephone industry, just go to AT&T’s home page, and look at the bottom. There’s a button labeled “All About VoIP.” As an AT&T spokesman said, “It’s the next killer application.”

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access