How does FAX work in VOIP environments?

FAX was designed for analog networks, and does not travel well over a VOIP network. The reason for this is that FAX communication uses the signal in a different way to regular voice communication. When VOIP technologies digitize and compress analog voice communication it is optimized for VOICE and not for FAX. Subsequently, there are a number of things you need to take note of when you move to a VoIP Phone System.
If you want to continue using your old fax machine, and you want to connect to your VoIP phone system, its best to use a VoIP Gateway and an ATA that supports T38. T38 is a protocol designed to allow fax to 'travel' over a VoIP network. An example configuration of such a setup can be found here.
It is also possible to convert to computer based fax and choose a VoIP phone system that supports fax. 3CX Phone System for Windows includes a full featured fax server that is able to receive faxes and forward them in PDF format to e-mail. Faxes can be sent from anywhere in the network using theMicrosoft Fax client & fax server (which comes free with Windows Server 2003 and 2008)
Another way to deal with fax when you switch to voip are to connect the fax machine directly to the existing analog phone line and bypass your VOIP system.

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