Best Business Phone Systems of 2020

Business phone systems no longer serve as a tool for simply making and receiving calls. Today's unified communications systems allow employees to communicate by phone, video, and text, which is giving businesses the flexibility to connect with customers and clients in any way they prefer. The business phone system market has grown by leaps and bounds in recent years, with dozens of options to choose from, which makes finding the solution that's right for your business a difficult task. To help in the search process, we researched and analyzed more than 75 providers. Our best picks are below, as well as a comprehensive list of phone system and unified communications providers in case our choices don't fit your needs. To learn more, read our guide on choosing a business phone system.

There are multiple factors to consider when choosing a business phone system provider. First and foremost, you want to ensure the system has all of the functions and features your business needs. Can it support the number of employees who need the service? Does it have all of the features your business relies on or would benefit from?

While some businesses only want standard calling features like caller ID and voicemail, others want added functions like ring groups, automated attendants and on-hold music. Also consider any other communication tools your business needs. Are you strictly looking for a system that allows you to talk over the phone, or are you in the market for more of a unified communications system that adds functions like video conferencing and instant messaging? Your answer to this question will guide you in your search for a new business phone system.

Another factor to consider is a business phone system's reliability. A phone system is of no use if it isn't up and running when you need it. This is especially important for a cloud-hosted solution. Ask each provider what its annual uptime percentage is. If it isn't 99.999%, find out what the company is doing to correct the issues. Also ask about its service-level agreements and if it has any uptime-related clauses. Many business phone system providers will give users money back if the system doesn't hit a certain uptime percentage.

If cloud-hosted systems aren't a fit for your business, you need to find a phone provider that offers on-premises systems. With an on-premises system, instead of the PBX being hosted in the cloud, your business houses all the equipment. These systems have more upfront costs but not many of the ongoing monthly fees that cloud-based systems do.

Very small businesses may want to consider whether they need a true phone system with onsite desk phones. Businesses that can get by with just mobile phones will want to look into a virtual phone system. These systems connect a main business number to employees' mobile phones. When someone calls the main business number, they are greeted by an automated attendant that can transfer them to different employees or departments. The call is then transferred to the appropriate employee's mobile phone instead of a traditional office phone. Virtual systems are a good fit for very small businesses, businesses with a large remote workforce and solopreneurs.

Finally, what type of customer support does the company offer? If you don't have a full-time IT staff that can handle any issues, you want a business phone system provider that will be available to answer questions when you have them, preferably through multiple channels and online resources.

Businesses in need of a multiline phone system have several options. The choices vary based on where equipment is housed, how connections are made and the cost structure, among other things.

The equipment that provides the functionality to make and receive calls is a private branch exchange. PBX technology, whether it is housed onsite at a business or in the cloud, is what gives businesses all of the features and tools unified communications systems offer, like automated attendants, call queues and ring groups.

Landline

Landline phone systems use traditional phone system connections and wiring provided by local and regional phone companies. These systems require onsite PBX equipment that your in-house IT team maintains and upgrades. These systems require a large upfront capital expenditure for all of the PBX equipment. Landline systems are falling by the wayside, as more and more phone system providers are no longer making equipment to support this type of business phone system.

VoIP

Instead of using traditional copper wiring connections like landline systems do, Voice over Internet Protocol (VoIP) systems rely on internet connections to facilitate calls. This allows you to run your phone system off of the same internet connection your company uses to go online. There are two different types of VoIP systems:

• Cloud-hosted VoIP: Cloud-hosted systems house their PBX equipment in the cloud. This means that the phone system provider is responsible for maintaining and upgrading it. To use a cloud-hosted system, all you have to do is plug your business's configured IP phones into your local area network. These systems don't require any upfront costs. Instead, businesses pay a monthly per-user fee. Costs usually range from $15 to $60 per user, per month.

• On-premises VoIP: These systems are similar to landline systems in that the PBX equipment is housed inside your business. You are required to handle all of the maintenance. The difference is that these systems still facilitate calls via internet connection rather than landline. This gives your business more control over how the phone system operates and allows you to install any security measures you want. On-premises VoIP systems require large upfront capital investment as well as smaller monthly fees to cover the required connections for making and receiving calls.
  
  

Virtual Phone System

Another option businesses have is a virtual phone system. These systems don't require any equipment, not even phones. A virtual system works as an extensive call-forwarding tree. You set these systems up so that all of the calls to your main business number are automatically routed to your employees' mobile phones. You have total control over where calls are routed to and in what order. These systems only charge monthly fees.

Today's business phone systems offer dozens of valuable features for small businesses. This is one of the true benefits of the cloud-hosted system: Cloud-based phone systems have opened the door for small businesses to access all of these features without spending a ton of money. Previously, only larger businesses could afford feature-rich systems because of the capital required to install all of the necessary equipment.  

Small businesses may benefit from these features, among others:

• Unlimited calling: Many of today's cloud-hosted VoIP phone systems include unlimited domestic calling for no additional charge. This gives you a fixed cost for the monthly service that doesn't fluctuate based on how many calls your business makes and receives.
  
  
• Automated attendants: This answers calls made to your business and routes calls to the proper employees or departments.
  
  
• Ring groups: This feature allows you to group employees together so that, if someone calls needing someone in that group, all of their phones will ring. You can choose for phones to ring in a specific order or all at the same time.
  
  
• Voicemail: In addition to traditional voicemail service, many business phone systems offer voicemail-to-email functionality. This sends either audio recordings or transcriptions of voicemails to the user's email inbox, so they can read or listen to their messages even if they are away from the office.
  
  
• Call recording: This gives phone systems users the ability to record their calls. Calls are then stored in the cloud or on their computers for playback later.

Other valuable features many business phone systems offer include extension dialing, call forwarding, call queues, and integrations with services like Microsoft Office and G Suite.

These systems also offer features that can boost a business's collaboration abilities, such as video conferencing, instant messaging, presence indicators and online meetings. 

Today's unified communications systems give employees the freedom to communicate by phone, video and text. The best systems are easy to use, with a wide range of calling, collaboration and mobile features that give users the flexibility to connect with customers in any way they prefer. To help in the search process for system that works for your business, we researched and analyzed more than 75 options. Our best picks are below, as well as a comprehensive list of phone system and unified communications providers in case our choices don't fit your needs. To learn more, read our guide on choosing a business phone system.

Unified Communications

Today's business phone systems offer much more than just a way to make and receive phone calls. Many of today's solutions, including some of our best picks, are considered unified communications systems.

Instead of focusing solely on a business's calling needs, unified communications systems support all of the ways employees now communicate with customers, clients and co-workers. This means not only traditional phone calls, but audio conferencing, video conferencing, instant messaging, online faxing and text messaging.

While many organizations offer these services to their employees, each component used to be provided by a different vendor. A business might have had one provider for its phone system, another for its conference calling and a third for its video conferencing. Unified communications systems tie all of that into one platform.

These are the main components of a unified communications system:

• Phone calls: This is traditional phone service that allows employees to make and receive calls. Most providers offer a local and toll-free number.
  
  
• Conference calling: Unified communications systems include a conference bridge that allows each user to host their own conference calls. The number of people who can be on a call at one time depends on the provider. Some systems allow conference calls with 5-10 people, while others allow for hundreds of people at one time.
  
  
• Video/web conferencing: This allows employees to host video meetings with video conferencing hardware, or through a computer equipped with a camera and microphone. Employees can host meetings and see others' faces on the call. In addition, most of these services allow screen sharing, which lets everyone in the meeting view documents or presentations together. The number of participants who can be on a video call at one time varies by provider. It could be just a handful or as many as 100.
• Instant messaging: Many unified communications systems provide the ability for employees to instant message each other. By logging in to the system, they can send messages back and forth to ask questions and collaborate on projects.
  
  
• Text messaging: Since texting has become so popular, some solutions allow you to send text messages from your business line. This allows you and your employees to send text messages to customers without them seeing your personal numbers.
  
  
• Faxing: These systems allow you to send online faxes rather than using a dedicated fax machine. You can send a fax to a recipient's email or fax machine from the platform.

Having all of these tools on one platform can make communication much easier for employees, making them more productive in turn.

Cloud-hosted systems have really driven the expansion of unified communications systems. Instead of paying tens of thousands of dollars for an on-premises system that houses all of these features, you can get all of this through a cloud-hosted service for a low monthly, per-user fee.

The number of businesses opting for a cloud-hosted business phone system has grown tremendously over the last few years. While many businesses were previously skeptical of moving their communication platforms to the cloud, fears of bad connections and spotty service seem largely forgotten. 

New research from Statista shows that the market for VoIP cloud-hosted systems is projected to outpace on-premises systems for the second-straight year in 2020. The gap between the two is expected to widen over the next five years. By 2024, the study projects the VoIP hosted market to surpass $13 billion, compared with only $9 billion for on-premises solutions.   

As more businesses turn to cloud-hosted systems, the security of these unified communications solutions will continue to be a priority in 2020. Mitel is one company that put renewed effort into its security practices in 2019. To ensure its systems comply with HIPPA and SOC 2, the unified communications provider has begun hosting its cloud VoIP system in Google Cloud. Knowing the importance of online security to today's consumers, we expect other business phone system providers to make sure their solutions are free from prying eyes.  

Another trend we expect to continue in 2020 is an increase in the number of business phone system providers offering built-in customer relationship management solutions. Many phone systems already integrate with third-party CRM software, but some unified communications systems have begun including CRM functionality as part of their core offerings.

Nextiva is one example. Its business communications suite gives all users, regardless of the service level they select, access to CRM features such as call pops, sales pipeline management tools, contact management and account history information. With many businesses looking to consolidate the programs they use, it will be a surprise to us if more providers don't start adding their own built-in CRM solutions.

As part of our research, we reached out to unified communications system users to learn which systems they find most valuable and what they like about them.

The added features, especially those that allow users to stay connected while working from anywhere, is what attracted Trevor Rappleye, CEO of CorporateFilming.net, to Ooma Office.

"What is most important to us when choosing a phone system (especially during COVID) is, how simple can it be to transfer calls to their cell phone?" Rappleye said.

He said the ability to customize their ring tones and hold music were other appealing aspects of Ooma. "If you call our number, Ooma has allowed us to add a fun touch to what we do."

Mark Kay, business expert and content manager at GearTec, said price and reliability were the key criteria his company used when choosing a business phone system. This is why they also chose Ooma Office.

"It's a VoIP phone system that is very cost-effective and gives you unlimited lines," Kay said of Ooma. "Ooma also allows you to use the office desk phone at home or use a mobile app to make and receive calls."

Grant Aldrich, founder and CEO of OnlineDegree.com, said Nextiva offers the perfect entry-level business phone system. He pointed to the affordable price and the ease of routing calls from a business line to a home or mobile phone are why he likes Nextiva's service so much.

"With a small home office, this means that if I am spending time watching the kids, I can route incoming calls which I don't have time for to voicemail, or this [call] which I don't want to miss can be set into a three-minute holding pattern," Aldrich said. "This is the perfect amount of time I need to get my kids set up with a 30-minute task, and then I can get to the important call I don't want to miss."

Q: What kinds of businesses benefit most from a good phone system?

A: All businesses can benefit from a good phone system. That doesn't mean that all businesses benefit from the same type of system, however. Communicating with your customers and clients in a professional manner is critical for businesses today. That's why relying strictly on mobile devices can cause problems for businesses. You want to give your customers a great impression of your business. A greeting from an automated attendant is a great first step; it shows that your business is a legitimate operation.

That's why businesses that don't need a traditional office phone system should consider investing in a virtual phone system. These systems allow businesses to present that professional image while still relying on their mobile devices as their main communication tools. Virtual systems include automated attendants and a host of other valuable features. In addition, when you make outbound calls, your business number, not your mobile number, is displayed to the person you are calling.

For larger businesses, business phone systems not only allow you to present a professional image to your customers, but also give your employees all of the communication tools they need to do their jobs. Access to mobile apps, which allow them to take their business lines with them wherever they go, and video conferencing services ensure your staff can connect with anyone, regardless of where they are and how they want to communicate.

Q: What is unified communications?

A: Unified communications is the ability to access all of your communication tools from one platform. Many of today's business phone systems are unified communications systems. While these systems still offer traditional phone service, they also include other communication tools that professionals now rely on.

The additional features in unified communications services include audio conferencing, video and web conferencing, instant messaging, and text messaging. Previously, in order to have all of these communication tools, organizations had to use a different service provider for each. Unified communications streamlines the process by allowing you to access all of these tools from the same provider. This not only boosts production among employees, but can also be a significant cost-saver for businesses.

Q: What is the best business phone system?

A: Since every business is different, it is hard to say that one business phone system can fill everyone's needs. That's why our recommendations for the best business phone systems are based on different use cases, like best for small businesses, best for remote employees and best for call centers.

For each use case, we looked at the functions and tools that type of business would need from a phone system. We then compared and contrasted the various phone system providers based on those criteria.

After our research, we recommend 8x8 as the best business phone system for small businesses, Ooma Office as the best business phone system for very small businesses, RingCentral as the best business phone service, and Grasshopper as the best virtual business phone system.

You can read specifics on each selection in our in-depth reviews, and you can see more details on how we selected them below in our Methodology section.

Q: When is the best time to invest in a good phone system for your business?

A: In today's highly competitive market, there isn't a bad time to invest in a business phone system. There are so many providers out there trying to land customers that they are always offering some sort of discount or incentive to sign up. This could be a few months of free service, free phones or discounted rates.

That being said, we have noticed a lot of providers seem to ramp up their incentives near the end of each quarter. As they close their books on the quarter, most providers want the best numbers possible, so they look for anything they can do to add some more clients before the month flips over. You might want to consider that timing before you start talking to providers.

Q: What is the difference between a business phone service and a business phone system?

A: There aren't many differences between a business phone service and a business phone system. Both provide you with all the tools you need to effectively communicate with those inside and outside of your office. 

To judge business phone service, you look at how well the system runs. Is the phone service reliable? This is especially important for cloud-hosted PBX systems. Traditionally, business phone services were all based on landlines. Reliability was rock-solid because everything was hardwired, and you weren't dealing with the internet. Today, as cloud-hosted PBX business phone systems become increasingly popular, finding a business phone service that offers the same reliability as a landline system has become crucial.  

One of the key factors to determine reliability is uptime statistics. Uptime is how often a cloud-based phone system is up and running. One of the most important elements of a business phone system is that you can pick up the phone and make a call whenever you need to and that whenever someone is calling you, they can get through. The best business phones services and systems have uptimes of 99.999%. This means that service is down for just a handful of minutes each year. Some business phone service providers go as far as to guarantee their uptime – if it ever falls below a certain threshold, they will reimburse you.

Q: What are the main differences between phone systems for small businesses and phone systems for large businesses?

A: What makes today's cloud-hosted unified communication systems so appealing to small businesses is that they provide the same functionality as systems that large businesses use.

Before the advent of VoIP and cloud-hosted solutions, large businesses were typically the only ones that could afford the expensive onsite equipment for a robust phone system with a wide selection of features, like automated attendants, extension dialing and call queues.

VoIP, specifically cloud-hosted VoIP phone systems, have leveled the playing field. There is no longer an expensive point of entry required, so small businesses can easily implement these systems in the same way large businesses can.

One difference might be the service tiers small and large businesses choose. While small businesses might choose a lower-tiered plan that doesn't offer every feature under the sun, larger businesses may be able to afford the more expensive plans that give them access to everything the phone system provider offers.

Q: How much does a phone system cost for small businesses?

A: The cost and the pricing structure of a small business phone system depends on where the system will be hosted. If it is hosted in the cloud, all you have to worry about are ongoing monthly fees for each user. Prices are typically $10 to $60 a month per user, depending on how many features and tools you want.

If you want to host your business phone systems on-premises (inside your physical business location), you need to plan for one-time upfront costs. For all of the equipment and installation, you can expect to pay several thousand dollars. In addition, there will likely be recurring monthly payments for your actual calling services.

Q: How do you set up a small business phone system?

A: A huge benefit of today's business phone systems is how easy they are to set up. VoIP systems are completely managed from an online portal. Administrators can log in to the portal to assign phone numbers and extensions, add new users, delete users, and turn features on or off for individual users. You can access this portal from anywhere with an internet connection.

To help you find the right business phone system, we researched and analyzed dozens of options. Here is a roundup of our 2020 best picks for business phone systems and an explanation of how we chose them.

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Locating the Best Services

To determine the best business phone systems, we started by listing all of the vendors that have good reputations online (i.e., services that other websites have favorably and consistently reviewed). Next, we interviewed small business owners to learn which systems they use and like. If they named a new system not on our list, we added that company to our preliminary list. Overall, we considered nearly 80 different phone system providers. (See our full list of business phone systems and their websites below).

Choosing the Best Services

We settled on these 23 phone systems to consider as best picks: 8x8, AT&T, Avaya, Cisco, Comcast, Dialpad, Digium, ESI, eVoice, FluentStream, FreedomVoice, Grasshopper, Intermedia, Jive, Mitel, Nextiva, OnSIP, Ooma Office, Phone.com, RingByName, RingCentral and Vonage.

Researching Each Service

Next, we researched each provider by investigating its services, watching tutorials and how-to videos, and reading user comments. We also contacted each company's customer service department, posing as business owners, to gauge the support each provider offers. Finally, we considered the pricing that was viewable on these services' websites or what they quoted to us in our customer service calls. We analyzed each system based on its deployment options, level of service, reliability, customer service, calling features, collaboration tools, mobility options, cost, and Better Business Bureau accreditation, ratings and complaints.

At Business News Daily, we are dedicated to finding the best products and services for small businesses. We know that your time is limited, and we invest hours into research and testing so you feel confident about our recommendations. 

Each year we update our best picks and use cases. We investigate changes and new companies in the industry, and we scrutinize new and existing products and services. Our process also involves revisiting companies we previously selected as best picks to evaluate whether they still are the best in their category. 

In addition to our business phone system recommendations this year, we have reviews of companies we previously selected as best picks:

• Mitel: Best for Call Centers

Want to learn more about choosing the best business phone system? Check out our full coverage here:

• Business Phone Systems Buying Guide
• What Is SIP Trunking?
• What Is PBX? 
• What Is a Virtual Phone Line? 
• Should Your Business Switch to Cloud PBX?
• Is a VoIP or Landline System Better for Your Business?
• How to Find the Right Softphone App for Your Business
• What Is a Cloud-Based Phone System?
• Which Multiline Phone System Is Right for Your Business?
• Is a Four-Line Phone System Right for Your Business?
• How to Find the Best Cloud-Based Phone System for Your Business