Small businesses are constantly innovating to reduce costs and become more efficient. Since the luxury of negotiating bulk telephony rates is not available to small businesses, this can often be an uphill task. Using voice over internet protocol (VoIP) may be one way in which you can overcome this. According to studies released in 2006 by leading IP telephony companies, over 60% of small businesses in the UK spend over ₤300 a month on fixed-line calls and ₤400 a month on mobile phone calls.

Research also shows that small and medium enterprises (SMEs) that switched over to VoIP experienced on average a 23% reduction in overheads and a 13% fall in IT expenses. While the numbers may vary significantly, depending on the size of your company, increased competition will continue to drive prices down. Popular UK providers that can meet the internet telephony needs of a small business include Skype, Call Union, PlusTalk, Vonage and Tesco. The greatest benefit from using these packages is that, as long as two locations are equipped with the same service, the calls will be free from PC to PC.

Skype, the first IP telephony company, still offers the lowest prices for overseas calls to non-users, making it a useful choice for businesses with international clients. Calls through Skype to fixed phones in the USA, France and Australia cost 1.2 pence a minute, and calls to land lines in India cost around of 8.7 pence a minute. Many services offer unlimited free calls to UK landlines and fairly inexpensive rates for calls to mobile phones at night and duringweekens.

But you also need to factor in monthly rental and set-up charges, which can vary. For example, Vonage charges ₤7.99 monthly rental with a ₤9.99 set-up fee. You also need to consider hardware costs, such as the price of a telephone adapter to convert a standard handset to a VoIP-enabled one, and the cost of purchasing a geographical number to receive calls. Luckily, these tend to be fairly low.