The Best Phone Systems for Small Businesses

Voice over Internet Protocol (VoIP) phone systems are becoming a necessary tool in modern business settings, serving as central hubs that unify communications across voice, chat and video. These cloud-based phone systems have largely replaced traditional landlines in business settings thanks to their advanced features, accessibility and cost. Most business phone providers include essential features like a phone number, voicemail, call routing and unlimited voice calls to the United States and Canada. However, services vary widely, with some boasting advanced features that use artificial intelligence (AI) to automatically prepare and send meeting summaries with action items after each call.

Whether you’re a small business that speaks to a few clients a week or a large business with a sales team that spends most of the day on the phone, there’s a system geared toward your needs. Our best small business phone system reviews below will help you determine which solution is most effective for your organization and suitable for your budget.

A business phone system is a communications platform that businesses of any size use to communicate with others outside and inside their company. Most of today’s business phone systems utilize either Voice-over-Internet-Protocol (VoIP), private branch exchange (PBX) or a combination of both. (See our picks for the best PBX phone systems.) While electronic communication, such as email, has become a prevalent form of communication, all businesses still need the tools to speak directly with clients, customers or other team members, and that’s what a business phone system provides. Unlike a home telephone, business phone systems provide companies with added functionality, such as unlimited calling, automated menus, ring groups to call multiple employees simultaneously and call recording. Many business phone systems have morphed into unified communications platforms that also include video conferencing, internal messaging and text messaging.

Modern business phone systems offer all the advantages with practically none of the disadvantages of older landline systems, which require expensive on-premises hardware to purchase and maintain. With a lower monthly cost, no hardware to manage and an impressive list of call management tools, a cloud-based business phone system is a very compelling option for many business owners. Below are some of the top benefits of using today’s business phone systems.

Go beyond making calls.

Cloud-based business phone systems do far more than make calls. They also support video conferencing, team messaging, SMS and online faxing. In addition, they offer integrations with popular business software and highly rated CRM platforms to properly manage customer data and communications across an entire business.
Enjoy communications flexibility.

Users can take and receive calls on any internet-connected devices, including computers, tablets, mobile phones and IP phones, with the same functionality as a traditional-looking desk phone. Businesses can send inbound calls to all devices at one time or set up ring groups that dial specific teams or employees with a simultaneous or sequential ring setting to ensure all inbound calls are routed and received correctly.

Get quality assurance.

While some traditional landline users may fear poor quality due to a bad internet connection, the reality is that cloud-based phones are on par with landline systems in terms of audio quality and reliability. The majority of business phone system providers offer uptimes of 99.999 percent and higher with SLAs. As part of their analytics tools, many vendors also include quality-of-service reporting, which details the quality level for every call made.

Today’s business phone systems offer many valuable features for small businesses, such as auto-attendants, AI tools and video conferencing. Perhaps the greatest benefit of cloud-hosted systems is that they’ve opened the door for small businesses to access a multitude of advanced functions without having to spend a ton of money. Previously, only larger companies could afford feature-rich systems because of the capital required to install the necessary equipment. Below are some of the functions to look for in today’s modern business phone systems.

In today’s digital landscape, phone system security is more critical than ever, especially since business communications often involve sensitive information including customer data, financial details and proprietary business strategies. According to IBM, the average cost of a data breach reached $4.9 million in 2024, making secure communications essential for protecting your business. Modern business phone systems offer several security features to safeguard your communications, including:

Call Encryption: End-to-end encryption scrambles voice data during transmission, making calls unreadable to potential interceptors. VoIP providers use military-grade encryption with protocols like Transport Layer Security (TLS) and Secure Real-time Transport Protocol (SRTP).

Multifactor Authentication (MFA): This security layer requires users to verify their identity through multiple methods before accessing the phone system, significantly reducing unauthorized access risks.

Session Border Controllers (SBCs): These act as firewalls specifically for VoIP traffic, monitoring and filtering communications to prevent malicious attacks while maintaining call quality.

Network Segmentation: Voice VLANs separate phone traffic from other network data, preventing attacks on one system from affecting your entire network infrastructure.

Regular Security Updates: Cloud-based systems receive automatic security patches and updates, ensuring protection against newly discovered vulnerabilities without requiring manual intervention.

Access Controls and User Management: Administrators can set granular permissions, control which features users can access and monitor system usage for suspicious activity.

For companies handling sensitive information, additional security measures may be required:

• Healthcare providers need HIPAA-compliant phone systems with encrypted communications and business associate agreements/
• Financial services require systems meeting regulatory standards for data protection.
• Legal firms need attorney-client privilege protections in their communications.

When evaluating phone systems, prioritize providers that offer:

• End-to-end encryption for all communications.
• Compliance with relevant industry standards (HIPAA, PCI-DSS, SOC 2).
• Regular security audits and certifications.
• 24/7 security monitoring and incident response.
• Transparent security policies and practices.

A business phone system typically costs between $15 and $50 per user per month, depending on the features and level of service you select. Many providers offer plans that start at around $20 per monthly user. In many cases, advertised prices are listed with the assumption of an annual payment plan for a significant number of users.

The per-user price generally reduces by as much as 25 percent for larger businesses that purchase many accounts and commit to an annual contract. Small businesses with fewer than 10 employees should pay special attention to advertised pricing on websites that often preselect a plan with more than 20 users and annual payment pricing, as this may not reflect the prices available to them. You’ll also want to take note of any minimum seat requirements when comparing prices for small teams.

Some providers, such as Zoom, offer pay-as-you-go metered pricing for calling and messaging, but this arrangement is rare. Most service providers include unlimited calling to the U.S. and Canada, with additional per-minute fees for international calls that vary by provider and region. Some vendors also charge a one-time activation fee for new customers.

Many companies lower their monthly prices by replacing standard features with piecemeal add-ons. For many businesses, this is an excellent way to reduce costs — you can skip features, such as call recording, that everyone may not use. You can also utilize add-ons to design a custom solution for your long-term communication goals. While some service providers allow businesses to mix and match plans to support different employees effectively, most vendors don’t offer this level of flexibility.

Most business phone vendors sell and rent preconfigured IP desk phones and other telephone hardware that range in price from $60 to $400. However, desk phones are never required to use a cloud-based phone system.

Hidden Costs and Unexpected Charges

While comparing business phone system prices, it’s crucial to understand the full cost picture beyond the advertised monthly rates. Many providers have additional fees that can significantly impact your total expenses.

Common hidden costs in business phone systems include:

Setup and Installation Fees: According to Nextiva, professional VoIP setup can cost $100-500 depending on complexity, though many providers waive this with annual contracts. Traditional phone systems often require much higher installation costs due to physical wiring needs.

Hardware Costs: While basic VoIP works with existing devices, dedicated IP phones range from $150-200 each, with potential $5-$20 monthly lease options. Traditional desk phones and PBX hardware can cost thousands for small businesses.

Regulatory and Tax Fees: Government-mandated charges are often unavoidable. According to TeleCloud, E911 fees typically range from $0.20 to $2.00 per line, Universal Service Fund fees can be 5-15 percent of your bill, and various state and local taxes apply.

International Calling Charges: International calling costs generally span from one to three cents per minute for popular destinations, while remote locations may incur charges exceeding $2 per minute.

Number Porting Fees: Transferring your existing phone numbers to a new provider typically costs $10-30 per number, though some providers include this service free.

Contract and Cancellation Penalties: Some providers charge cancellation fees if you end service early, and auto-renewal clauses can lock you into unwanted contract extensions.

To avoid surprises, always request a detailed cost breakdown from providers and ask specifically about:

• All one-time setup costs.
• Monthly regulatory fees and taxes.
• Costs for essential features you’ll need.
• International calling rates, if applicable.
• Contract terms and cancellation policies.

No matter your unique circumstances, there are a few factors that are always important to keep in mind when shopping for a business phone system. We asked business owners and decision makers who recently went through the buying process to explain how they went about finding the best business phone system for their needs and what they prioritized during their search.

Cost

When it comes to cost, don’t just choose the cheapest platform, even if you’re on a tight budget. Consider which solution offers the most value per dollar instead, including features you need at no additional cost. Sometimes the cheapest systems lack features that usually come standard and vendors charge additional fees for access to them.
“While some providers may provide cheap monthly rates, more money may be charged for additional features. I originally chose a VoIP service with a cheap basic rate, but I soon found out that there were extra costs for things like call recording,” Victor Zeng, global business director of XMAKE, told us. “Selecting a package that strikes a balance between price and vital features is crucial.”

Usability

Test the phone systems you’re considering whenever possible to determine how easy they are to use. Avoid platforms that require extensive training, as they’re likely to frustrate your employees and disrupt productivity. The best business phone solutions are relatively intuitive and won’t take long for the average user to navigate successfully.
“We chose RingCentral last year. When selecting a system, we prioritized ease of use and integration with our existing tools,” said Nell VH, co-founder and director of TheSiteSale. “It’s been a game-changer, but I’d suggest testing features before buying.”

Reliability

In business communications, reliability is everything. Your chosen vendor should have at least a 99.999 percent SLA, the industry standard. That translates to about five minutes of downtime annually. Even 99 percent uptime is a considerable difference, translating to about 5,259 minutes of downtime per year, so make sure the platform you choose is reliable.

“[With our old phone system] we were having horrible latency problems, like one to two second delays in calls, which does not help when you’re trying to have a conversation,” said Charlie Neville, head of business development for JayWay Travel. “We tested the hell out of RingCentral and other platforms, before we chose RingCentral. It doesn’t have the … most modern user interface … but it has been rock solid.”

Mobile capabilities

Today, it’s common for workforces to be distributed, whether your team includes remote and hybrid workers or you manage a fleet of drivers. While desk phones and conference calling systems may be important in an office, softphones and mobile apps are key for employees who aren’t always on site.

“In our field of work, we’re always moving around from state to state, talking with drivers, customers and logistics partners. We needed a phone to communicate smoothly, whether at the office or on the go,” said Zach Asher, owner of Amerigo Auto Transport. “A key selling point for Dialpad was its solid mobile app. It can also switch calls from desktop to mobile without dropping them.”

Integrations

The best business phone systems tie into your existing tech stack. Consider the business software you already use and which apps must integrate with your business phone system. Generally, this will include tools like your CRM and contact center software.

“When choosing a system, we prioritized scalability and integration capabilities,” said Kevin Shahnazar, founder and CEO of FinlyWealth. “As a fast-growing startup, we needed a solution that could grow with us and seamlessly integrate with our existing CRM [software] and productivity tools.”

The ease of implementing a new phone system can significantly impact your business operations during the transition. Understanding setup requirements and migration complexity should be a key factor in your decision-making process. Before switching to VoIP, evaluate your internet infrastructure. VoIP systems require adequate bandwidth — approximately 0.5 Mbps per concurrent call is ideal.

Modern cloud-based VoIP systems are designed for quick implementation. The typical VoIP migration process takes 2-4 weeks from contract signing to full implementation, with minimal business disruption. However, some services, like Aircall and Ooma, can be ready to use within minutes.

Key setup advantages of VoIP include:

• No physical infrastructure required; systems work with existing internet connections.
• Quick provisioning through online portals.
• Ability to use existing devices (computers, smartphones) immediately.
• Remote configuration and testing capabilities.

Businesses must decide between migrating all users simultaneously or implementing a phased approach. Phased migrations allow testing with smaller groups before full deployment. Consider how much training your staff will need. VoIP systems often feature intuitive interfaces that minimize learning curves, while complex systems may require extensive training.

Transferring existing phone numbers is crucial for business continuity. Most providers handle this process, which typically takes 5-10 business days and costs $10-30 per number. Plan for potential service interruptions during the migration. Quality providers coordinate transitions during off-peak hours and maintain backup communications during the switch.

Ask potential providers these questions about setup and migration:

• What is the typical implementation timeline?
• Do you provide migration assistance and project management?
• What employee training resources are available?
• Can we test the system before full deployment?
• What backup communication options exist during migration?
• Is technical support available 24/7 during the transition?

Businesses should prioritize vendors offering comprehensive migration support, clear timelines and minimal operational disruption during the transition process.

At Business News Daily, our team of small business unified communications experts has been researching and testing business phone systems for years, comparing some of the leading solutions across more than 25 key metrics.
We considered 75 business phone systems in our initial pool of candidates. To determine which to test further, we looked at pricing plans, hardware options, core features, reported system uptime and the availability of customer support. We also considered the setup process for each business phone system and prioritized the ones that were straightforward and quick to get up and running. Finally, we considered customer reviews to determine which vendors seemed to deliver on their promises according to real-world customers.

After narrowing our list down, we closely reviewed and tested 20 of the solutions before selecting our nine best picks above. This testing started with scheduling live demonstrations to get an overview of each business phone system and asking questions of company representatives to learn more about the system itself and the service the vendors provide. We also accessed free trial software to get a firsthand sense of how each phone system worked, and we looked for tutorial videos and guides to see whether new users could get up to speed quickly with nothing more than self-guided materials.

Below are the factors we considered when determining our best picks. Each is weighted according to how much the criteria typically influence business owners’ buying decisions.

Pricing (30%): We considered not just the platform’s base cost but also the number of pricing plans, costs for each user and add-on fees for additional services to determine which provides the most value per dollar.

System Features (25%): We particularly evaluated the key tools most businesses seek in phone systems, such as automated attendants, call recording, call parking, call forwarding and call blocking. We also considered whether the platform offered additional communications services, such as online faxing, video conferencing, internal instant messages and text messaging.

Usability (20%): We paid close attention to how simple it was to set up the phone solution, how intuitive we found the navigation and use of key features, and the training and informational resources available to new users. We also considered whether the vendor offered a desktop and mobile app that ensured users could take calls from anywhere.

Customer Support (15%): We examined the ease with which customers can contact the team for help, and we reviewed customer feedback to determine how well the customer service team meets the needs of existing customers.
Equipment Options (10%): We considered the amount of hardware included with each business phone system’s base subscription cost. Some providers include free desk phones, such as those from top providers like Cisco, Poly and Yealink, or conference systems, while others only provide access to software and charge extra for phones. Those that included hardware received extra consideration when selecting our best picks.

In addition to scoring each business phone system we reviewed based on these criteria, we also determined the best use case scenarios for each. No two businesses are exactly alike, so we put ourselves in the shoes of different types of small business owners to identify the best communication systems for a variety of needs.

To learn more about how we review and test communications products and services for small businesses, read about our editorial process.

If our best picks don’t seem to suit your business, consider some of these alternatives we evaluated.

Grasshopper

For many small business owners and solopreneurs, adding a simple virtual business phone system to an existing cell phone makes the most sense. Grasshopper lets you easily separate work and personal calls from the same device, providing a professional look and sound with local, toll-free and vanity phone numbers. You can even hire Grasshopper to record a professional voicemail greeting on your behalf. All plans provide the same core features, including unlimited minutes, mobile and desktop apps, call forwarding, virtual faxing, voicemail, simultaneous call handling, business texting and 24/7 support. The number of users, phone numbers and available extensions primarily differentiate the packages. Read our full Grasshopper review to learn more.

OpenPhone

OpenPhone’s virtual phone system bridges the gap for remote teams. Its unified inbox centralizes all customer interactions, from calls and texts to voicemails, keeping everyone informed and eliminating missed opportunities. Shared inboxes and business-hours routing ensure calls are distributed evenly and handled promptly. Plus, complete conversation history with transcripts and internal chats empowers your team to provide personalized service. On top of that, OpenPhone has affordable plans with time-saving features like auto-responses and snippets, making it a cost-effective solution for remote businesses.

800.com

800.com focuses on one key element: business phone numbers. Unlike some competitors that offer full phone systems, 800.com helps you establish a professional presence with 1-800, vanity or local numbers. This separates your personal calls and creates a dedicated line for customer inquiries. They offer three flexible plans, all including features like faxing, call recording, texting, analytics, voicemail transcripts and various call forwarding options, so you can choose the functionality that best suits your needs.

When choosing a business phone system, one of the most important decisions is whether to go with a VoIP system or stick with traditional landline phones. Understanding the key differences can help you make the best choice for your business needs. VoIP systems transmit calls over the internet, while conventional phone systems rely on copper wires and physical infrastructure. These setups bring a variety of advantages and disadvantages.

Advantages of VoIP systems include:

• Cost savings: VoIP eliminates the need for expensive physical infrastructure and reduces long-distance charges.
• Scalability: Adding new lines is as simple as a few clicks, without requiring physical installation.
• Mobility: Employees can make and receive calls from anywhere with an internet connection.
• Advanced features: Video conferencing, voicemail-to-email, call recording and mobile apps come standard,
• Integration capabilities: Easily connect with CRM systems and other business applications.

Advantages of traditional phone systems include:

• Reliability during power outages: Landlines continue working when electricity is out.
• Widespread availability: Copper wire networks reach areas with poor internet coverage.
• Familiarity: Many businesses are comfortable with traditional systems and existing equipment.
• Independence from internet quality: Call quality isn’t affected by bandwidth limitations.

However, traditional systems have significant drawbacks:

• Higher costs: Expensive hardware, installation and ongoing maintenance fees hurt businesses financially.
• Limited functionality: Landlines only support basic voice calls, not modern communication features.
• Scalability challenges: Adding lines requires physical installation and equipment.
• Location dependence: Phones are tied to specific physical locations.

A report from Research and Markets shows that the VoIP market is expected to exceed $264 billion by 2029, with a compound annual growth rate of 11.8 percent. This indicates strong business adoption of internet-based phone systems over traditional phone services.