Although each VoIP software package is different, most VoIP software function the same way. Usually, you can call another person on the network by typing in their user name or number. If that person is online they will see a popup box alerting them that you want to talk. The other party can see who is calling and can choose to either accept or reject the call. Before the popup appears, however, there has already been some communication between the two computers. The VoIP software has information about the speed of your Internet connection and the type of code that can be used to compress and decompress audio data.

When a call request is made, both computers negotiate which code is going to be used to make allowances for the connection speed. Other types of VoIP Services are available which allow you to make PC-to-Phone connections, and also calls that do not involve the use of your computer at all. Although these premium services vary in price, in most cases by using VoIP technology you will be saving a significant amount of money on your phone bills each month.