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Updated May 01, 2024

What Is a Virtual Phone Line?

A virtual phone line can support your business communications while saving on hardware costs. Here’s what you need to know.

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Jeff Hale, Business Operations Insider and Senior Analyst
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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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A reliable telephone communication system is one tool every business should have. In the past, though, the best business phone systems were expensive and difficult to implement for small businesses. No longer; today, a virtual phone number is a simple, affordable solution that can help expand your business beyond the confines of a traditional phone line. This guide covers everything you need to know about virtual phone lines and how they could benefit your business.

What is a virtual phone line?

A virtual phone number, or direct inward dialing (DID), is a telephone number that is not tied to a specific phone device or line. Also, it allows the user to redirect and route calls from one number to another number, IP address, or device. Virtual phone lines are also known as “online numbers.”

Traditionally, phone numbers were designed to work over a single phone line that was physically connected from the phone company to your home or business; plus, any calls made to that number could only be sent to that specific physical location. Cellphones, while more mobile than landlines, are still dependent on cell towers to provide coverage. A virtual number gives a business greater control and flexibility in how it receives calls by removing these physical limitations and requiring only an internet connection.

How do virtual phone numbers work?

Virtual phone numbers rely on the internet instead of a phone company or cell tower to provide coverage; this allows users to be reached by phone or computer. It also allows you to change the device you use in real time. For example, if you only want to be available on your mobile phone at certain times, you can route all calls you receive during work hours to a virtual phone line.

How to get a virtual phone number

If your business already has a Voice over Internet Protocol (VoIP) system, you can add virtual numbers to your current package through your VoIP provider. Check out our reviews of the best business phone systems for VoIP for some options.

If you don’t have a virtual phone system, you can purchase a package that includes one virtual number and a certain number of extensions and minutes. Minutes are incurred depending on how long you talk on the “business line.” A virtual phone system generally costs between $10 and $25 per month for one or two virtual numbers with 300 to 500 minutes. Costs typically increase as you add more virtual phone numbers and minutes to your plan.

Also, you can go through a provider that only sells virtual numbers. These are some of the most popular virtual phone line providers:

  • Grasshopper supports calls, texts and voicemail. It offers three service plans, starting at $14 per month, allowing you to choose the one that works best for your business. Read our review of Grasshopper to learn more about its plans.
  • 8×8 is a cloud-based VoIP unified communications system that boasts highly reliable service, three-way calling, online voicemail, call forwarding and ring groups among its many features. It also integrates with office programs like Salesforce and Slack. Plans start at $24 per month. Read our review of 8×8 for more details about its VoIP solutions.
  • Google Voice provides individual users with a free virtual phone number that can be used for calls, text messages and voicemail. It has an easy-to-use app for smartphones or computers, and you can link the virtual number to a mobile or landline number. Business plans start at $10 per month per user for up to 10 users in 10 domestic locations.
  • MightyCall is a cloud-based business phone system that offers phone calls, text messaging and voicemail, as well as smart call forwarding and call recording. Multiple subscription plans are available, starting at $15 per month with an option for a seven-day free trial.

What are the benefits of a virtual phone number?

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Virtual phone numbers offer a strong list of benefits and features to help small businesses compete with larger organizations. They provide flexibility in hardware, endless options for localization and tons of cost-saving potential. Virtual phone numbers make more sense for businesses of all sizes than traditional business landlines.

1. Ability to receive calls anywhere

Without being tied to a physical location, you can receive calls anywhere, anytime and on your preferred device. For example, if someone in your company is going to be away and needs to be reachable by phone but doesn’t want to give out their cellphone number, you could assign a virtual number to their cellphone.

2. Incoming call distribution

Virtual phone numbers are also beneficial for companies with multiple office locations. Instead of a phone ringing in one office, incoming calls can be sent to phones in each office. You can do this by making your virtual phone line’s destination a call queue or ring group; this will ring the phones of any employee who is designated as part of the queue or group either simultaneously or sequentially, depending on your preferences.

3. Localized phone numbers

If your office is located in a different area than your customer base, you can assign a local area code to your phone line. This helps you establish a presence in a key area and lowers costs on incoming calls. Customers are more likely to call and answer calls from a local number than one with an area code they don’t recognize.

4. Integrations with marketing campaigns

You can also track key customer metrics through your virtual phone line. Many CRM systems let you assign a unique number to a specific campaign — for example, so you’ll know if someone is calling for that campaign based on the number alone. This data can help evaluate the effectiveness of a campaign. See our reviews of the best CRM systems for more details.

5. Fewer equipment charges

Virtual phone lines can save your business thousands of dollars in telephony and equipment charges. Because they are 100% digital, virtual phone lines require no hardware, equipment, installation or maintenance.

6. Advanced features

When searching for a virtual phone provider, see if the company you’re considering offers text and voicemail features in addition to phone service. More expensive and complex plans typically offer features like three-way calling, ring groups, caller ID, call waiting and forwarding, call recording, and call transfers. You should also see how reliable the service is in terms of uptime and whether customer support is included in your plan.

What are the drawbacks of virtual phone lines?

The benefits of virtual phone lines vastly outweigh the cons for most business users; however, there are a few potential drawbacks compared with traditional landlines.

1. You’re always “available.”

The foremost concern is the effect on work-life balance. When you have virtual phone numbers, you and your team are always accessible. It’s important to set clear expectations around when employees are expected to answer calls and messages and when they aren’t. Having an “always on” mentality may seem great, but failing to provide time for your team to unplug and rest could lead to occupational burnout, declining productivity, and low morale.

You are often able to mute a virtual phone number or route it directly to voicemail outside of business hours.

2. The call quality depends on the internet.

Another drawback is the inconsistent call reliability. Because a virtual phone number is purely internet-based, the call quality will only be as strong as your internet connection.

Ensure you have a strong, reliable signal and that your internet service provider has a good customer service program when implementing a virtual phone number.

3. Data limits can be costly.

If you are on a plan that uses minutes, you must be conscious of how you use those minutes — ensure you don’t waste them on spam or non-business calls. Otherwise, you risk driving your costs up above your budget.

Understanding virtual phone lines

Virtual phone lines seem just like ordinary phone numbers to anyone who is calling you. But unlike traditional phone lines that are tied to a specific cellphone or landline, they let you receive calls on whatever device is most convenient for you at the time. That can be a cellphone, a landline, or a desktop or laptop computer. You can also usually make calls from multiple devices and, if you need to, change which devices ring when the phone line is called. Many virtual phone line providers also include other standard phone features, including texting and voicemail.

Using virtual phone lines can provide some of the advantages of having a business phone number without the need for a dedicated line. If you’re thinking about a virtual phone line or perhaps multiple virtual lines for multiple employees at your business, you should take a look at what options are available at different price points.

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Frequently asked questions about virtual phone numbers

Several free virtual phone number providers are available online, such as Google Voice, for personal use. Simply choose your preferred provider and open an account, choose your desired area code, and begin using your virtual phone number. Many virtual phone providers offer a free phone number for individuals but have paid options for businesses.
Yes, you can convert your existing traditional phone number to a virtual one. This process is called “porting” and is available through most virtual phone number providers.
You can get a virtual phone number in most parts of the world, though the specific countries may vary by provider. Most providers’ services are available in 50 or more countries, with some boasting availability in over 100 countries.
Virtual phone numbers follow the same 10-digit format as a standard U.S. landline with a three-digit area code followed by the phone number. Unlike traditional landlines, virtual phone numbers can be purchased without a physical address that’s tied to the corresponding area code. This allows businesses to create the appearance of a local presence in a geographic region from anywhere in the world. However, instead of utilizing a local area code, many national companies opt for a toll-free prefix such as 800, 888, 877, 866, 855, 844 or 833 for their virtual phone numbers.
When someone calls your business at a toll-free number, you pay for the call. This may be worth it, though, for customer service and sales calls if it leads to more business.

Steven Melendez and Sean Peek contributed to this article.

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Jeff Hale, Business Operations Insider and Senior Analyst
Jeff Hale is a communications and content marketing expert with extensive experience leading teams as a managing editor. He has deep knowledge of B2B communications technologies, including business phone systems and customer relationship management (CRM) software. Jeff is also an entrepreneur who knows the realities of launching and managing a small business, where he serves as a Content Director and SEO Consultant. In his role as an entrepreneur and professional, Jeff has identified new market opportunities for Fortune 500 clients and developed communications strategies and digital branding for tech startups and small businesses. Jeff holds a Bachelor’s degree in English from the University of California, Irvine, and an MBA from Chapman University.
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