Setting a caller ID prefix (also known as cid prefix or clip) provides a way to tag certain calls, achieved by changing the caller ID that is shown on your VoIP device.
For example, on the account is a phone number in Brisbane and a phone number in Sydney which are both routed to the same extension, but each call should be answered with 'Welcome to X Company Brisbane' or 'Welcome to X Company Sydney' depending on which number the caller dialed.
By setting a Caller ID prefix on the Sydney number to SYD, any calls that are received on this number will show SYD and the caller's number, for example 'SYD 0412345678', on the phone's display.
It is also possible to set multiple caller ID prefixes. As an example, a PBX has numbers in multiple states routed to an IVR. This IVR has an option 1 for sales and an option 2 for support that pass the call to a call queue.
Setting a caller ID prefix of SYD (as above) on the phone number, then setting the caller ID prefix of 'Sales' on the Queue will result in calls to the sales queue from the Sydney number showing 'SYD Sales' on the phone's caller ID.