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Updated Oct 26, 2023

What Is a VoIP Number?

A Voice over Internet Protocol phone number enables your business to communicate via an internet connection rather than a conventional phone line.

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David Cotriss, Contributing Writer
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Editor Reviewed
This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.

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In the globalized, digital world we’re living in today, you never know when you might need to make a call from anywhere using anything – so it no longer makes sense for businesses to succumb to regional or time restrictions on their location or device. Fortunately, there’s a solution. 

A Voice over Internet Protocol (VoIP) number allows you to select whichever area code you want for a phone, or even have multiple phone numbers with different area codes. Thanks to these virtual numbers, it’s never been easier to adapt to and conduct business from different environments – and there’s a whole host of other benefits.

Editor’s note: Looking for the right business phone system for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

If you’re wondering what all this means and whether a VoIP number is a good choice for you, you’re in the right place. We’ll run through how VoIP numbers work, how they compare to traditional phone numbers, how to get one yourself, and a few things to look out for along the way.

How does VoIP work?

Whereas traditional phone numbers (i.e., landlines) are attached to a specific phone line and make calls using circuit transmissions over the public switched telephone network (PSTN), VoIP uses the internet to make calls and isn’t attached to any specific device. 

The name literally means that it transmits voices using internet protocols. How this works is complex, but basically, a VoIP converts analog signals from the phone into digital form so the internet can process it.

Although it’s become more popular recently, VoIP has been around in some form since 1995. Since then, we’ve seen massive increases in quality and speed, along with lower costs and more features.

Types of VoIP systems

Although all VoIP systems use the same basic mechanisms, there are a few different types.

The most basic VoIP phone system is a simple piece of software run through an internet provider, which gives you access to your virtual number from anywhere and through any device. It functions in a similar way to software like Skype. This is ideal for individuals or small organizations since it’s the most simple and inexpensive option to set up. [Read related article: Choosing a Business Phone System: A Buyer’s Guide]

On-premises VoIP systems

Then there are on-premises VoIP systems, which take the technology used in traditional landlines and convert it to a VoIP version. This is the most complex and difficult to maintain, as companies must control and maintain everything themselves, but it can work for larger companies.

Cloud-based VoIP systems

An alternative to an on-premises system is a VoIP system hosted by a third party, which leases the solution, sets it up and maintains it when necessary. This gives the company less control over the system than an on-premises solution, but it’s much easier to handle and is therefore very popular.

You might also hear hosted VoIP systems referred to as cloud-based phone systems. The two things are practically the same. When a VoIP system is hosted over the cloud, it means an external company maintains everything. For an example, read our Nextiva review.

VoIP vs. traditional phone numbers

What we consider a traditional business phone number is usually a landline: an analog phone system hosted by a local phone company that functions using copper wiring infrastructure through PSTNs.

For a company to have its own landline service (with multiple extensions and features like call transfer), it must have private branch exchange (PBX) hardware. A PBX system is expensive and complex to maintain, but it offers important features like call forwarding. 

In contrast, VoIP phone systems run through the internet. However, the results are fairly similar: VoIP systems offer most of the features that were previously limited to PBX systems. 

Now that you know the difference between the two, you’re probably wondering if a VoIP or landline is better for your business. Let’s review the details. 

Pros and cons of traditional phone numbers

An advantage of traditional phone numbers is that they’ve been around so long that everyone in a company will feel confident using them. And since they don’t need the internet to function, they’re more reliable in areas where the internet connection is slow or intermittent. 

However, many phone system providers are now phasing out their landlines, which means you could run into problems in the future if you need to replace or repair it. Nobody wants to work with obsolete technology. Also, they can be expensive and difficult to maintain, often requiring in-house IT staff.

Key TakeawayKey takeaway
Traditional phone lines are reliable when the internet connection falters, but they are expensive and increasingly difficult to maintain.

Pros and cons of VoIP numbers

One of the main perks of VoIP systems is that they offer more sophisticated features at a fairly affordable price, including call routing and forwarding, extension dialing, and three-way calling (more on these later). This makes it easier for smaller businesses to appear more professional and established, even if they can’t afford an on-premises phone system.

They also offer more flexibility since you’re not limited to a specific physical location or device when making VoIP calls. You can even choose an area code outside of where you operate – a great tool if you want your business to be associated with a specific location or multiple locations, or to avoid charges for long-distance calls.

VoIP systems often offer better audio quality too. As long as you have enough bandwidth for the call, VoIP can get rid of fuzziness and improves clarity. However, since VoIP systems require an internet connection, they’re not the best choice if your bandwidth isn’t up to snuff.

As for VoIP systems that also use PBX hardware, they’re better for compliance since they give companies more control and therefore greater security,  but they can be very expensive and involve a lot of maintenance, so they’re not a realistic choice for every company.

Other options 

You aren’t limited to choosing between a VoIP system and a traditional phone number. There are also in-between solutions.

Virtual phone numbers are another option. These essentially work by forwarding calls: The caller dials a landline number but is forwarded to a different number, usually belonging to a remote worker answering the phone from their home. This helps to make a business appear more professional on a low budget.

To figure out which option is right for you, check out our guide to the best business phone systems.

Did You Know?Did you know
You can have the best of both worlds with a hybrid of a traditional phone system and a VoIP system, which connects a standard phone line with a data network. Just use an analog-to-VoIP adapter with your current phone.

How to get a VoIP number

Depending on whether you want a hosted/cloud-based, software or in-house VoIP system, the method to set up your number will differ. Because an in-house VoIP system is a complex process that will require help from an in-house IT department, and a software VoIP is very simple, we’ll be focusing on cloud-based, or hosted, VoIP systems here. 

The first step is choosing a service plan. Some of the most popular are RingCentral, Intermedia Unite and Dialpad. You have many other choices, so make your selection wisely.

Learn more about some top business phone systems in our RingCentral review or our review of Dialpad phone systems.

To help you choose, look for features like these:

  • Corresponding softphone app
  • Call recording
  • Call queuing
  • Call forwarding
  • One-click conference calls
  • Auto-attendants 
  • Toll-free number
  • Integration with chat and email

You may not need every single feature available, so make a list of the ones you must have.

Getting your number

Once you’ve chosen a provider, it’ll give you a virtual number, meaning you can choose the area or country code you’d like. This could take a while in special cases (such as if you choose a country code associated with a highly regulated nation). However, it will usually take just a few hours. You might even be able to connect a phone number you already have with your VoIP.

Setting everything up

The final stages of the process will depend on the provider you choose. Usually, you can simply create your account online and set up your system with the features you want.

You’ll also need to connect the devices you want to the system. Are you happy to just have one phone, or do you want multiple computers, tablets and devices connected?

As the final step, you’ll be able to verify everything is working properly with a quick test. If anything goes wrong along the way, your provider should be able to help out.

Make sure you have enough bandwidth before you install a VoIP number. You can check this through your device or a website like Speedtest.

VoIP fraud to be aware of

Although VoIP systems can be an amazing and convenient solution for businesses, they can also be a good tool for scammers, who use them to establish credibility with their victims. When scammers call someone using a VoIP, they can appear like a legitimate organization (like a bank) instead of a random person from a random place.

No matter how legitimate a caller seems at first glance, it’s always best to err on the side of caution. If you have any doubt at all, say that you’ll call back later and ring the number directly. This way, you’ll know you’re talking to who you should be.

It’s also a smart idea to stay on top of the latest scam techniques and get phone numbers directly from the official source (not through a text or email you just received).

Make sure your customers are aware of VoIP fraud, and give them ways to recognize when it's really you calling them.

Setting yourself up for success

Technology is making it easier than ever for small businesses to pose as larger, more established entities and access lower-cost versions of their tools. 

VoIP numbers are one example of many, and the best part is that the advantages don’t end here. You’ll also be able to take calls from anywhere in the world and so much more. It’s no wonder an increasing number of businesses are getting involved.

author image
David Cotriss, Contributing Writer
David Cotriss is an award-winning writer of over 500 news and feature articles for both trade and consumer publications focusing on business and technology topics.
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