As experts continue to call out the latest signs of an approaching recession, businesses respond by cinching up their budgets. But, for those already tasked with keeping their bottom line lean, new ways of cutting costs are getting harder to find, says Bryan Martin, CEO of Internet phone service provider 8x8, Inc.

"In an economy like this, there's a gut reaction to put the breaks on new spending. But, we often overlook the fact that there is room to cut the day-to-day costs of doing business," Martin says.

From remote towns to large metropolitan areas, businesses are adding Internet-based digital phone service to their short list of cost-cutting measures.

Internet telephony technology, otherwise known as VoIP, lets companies deploy a full-featured business phone system over their existing broadband network for a fraction of the cost of traditional alternatives.

Joe Rork is no stranger to recession and the havoc it plays on business. As a technology consultant with a long association with a top U.S. automaker, his home state of Michigan was hit hard.

"We learned earlier than the rest of the country that we were going to have to get pretty creative financially to keep our businesses running and our customers coming in."

Rork currently serves as chief technologist for Plymouth's Green Street Fair, an annual event to help educate and inform people about the benefits of green, organic, and eco-friendly products and services. The Green Street Fair has used 8x8's Packet8 Virtual Office digital phone service every step of the way.

Watching every penny he spends is an art he's had to become very proficient at -- quickly. "One of the easiest things I did right off was to be sure we were using Internet technology for our phone systems. Not only is it a huge savings for us in terms of cost, it's the safest and easiest way we can move our office from headquarters to the event location without missing a beat."

In Fort Myers, Fla., business owner Bert Hamilton of Harvey Software, can't go a day without being reminded of the impact of a precarious economy roiled by soaring fuel prices. His company writes shipping software that gives customers more control over their shipping costs.

"We tell our customers that if our software does not save their company money, we did not do our job." It's getting harder to say that these days. "When carriers like UPS and FedEx have to increase their fuel surcharges, we're left to figure out how to help our customers deal with it," says Hamilton.

Hamilton had relied on traditional phone services for 25 years, but after switching over to Packet8, he and his customers have been instantly rewarded. "Virtual Office has cut our costs in half and our customers have noticed a big difference in the way their calls are handled," says Hamilton.

Using the Internet to make calls is a technological marvel to some. For others, it comes down to simply making the smart play. "As to the future of the Internet and its use as a business tool, we've barely scratched the surface," says Martin.