Business News Daily receives compensation from some of the companies listed on this page. Editorial Guidelines.
BND Hamburger Icon

MENU

Close
BND Logo
United KingdomOpen row
Search Icon
Advertising Disclosure
Close
Advertising Disclosure

Business News Daily provides resources, advice and product reviews to drive business growth. Our mission is to equip business owners with the knowledge and confidence to make informed decisions. As part of that, we recommend products and services for their success.

We collaborate with business-to-business vendors, connecting them with potential buyers. In some cases, we earn commissions when sales are made through our referrals. These financial relationships support our content but do not dictate our recommendations. Our editorial team independently evaluates products based on thousands of hours of research. We are committed to providing trustworthy advice for businesses. Learn more about our full process and see who our partners are here.

Updated Apr 18, 2024

The Best Phone Systems for Small Businesses

author image
Mark Fairlie, Business Operations Insider and Senior Analyst
Verified Check With BorderEditor Reviewed
Verified Check With Border
Editor Reviewed
Close
This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.
Best for Multi Site Retail and Healthcare
Nextiva
Nextiva logo
  • Easy call flow builder
  • 24/7 customer support
  • Mix-and-match plans
USALinks to Nextiva
Visit Site
  • Easy call flow builder
  • 24/7 customer support
  • Mix-and-match plans
Best for Collaboration
RingCentral
RingCentral logo
  • Tons of integrations
  • Great reporting tools
  • AI-powered meeting insights
USALinks to RingCentral
Visit Site

855-619-0564

  • Tons of integrations
  • Great reporting tools
  • AI-powered meeting insights
Best for Small Businesses
Ooma
Ooma logo
  • More than 50 standard features
  • 24/7 customer support
  • Month-to-month contracts
USALinks to Ooma
Visit Site
  • More than 50 standard features
  • 24/7 customer support
  • Month-to-month contracts
Best for Video Conferencing
Zoom
Zoom logo
  • Pay-as-you-go plans
  • Low annual fees
  • 24/7 customer support
USALinks to Zoom
Visit Site
  • Pay-as-you-go plans
  • Low annual fees
  • 24/7 customer support
Best for APIs and Customisation
Vonage
Vonage logo
  • More than 40 standard features
  • 99.999 percent uptime reliability
  • Freephone and 1-800 numbers
USALinks to Vonage
Visit Site
  • More than 40 standard features
  • 99.999 percent uptime reliability
  • Freephone and 1-800 numbers

Table of Contents

Open row

What Is a Business Phone System?

A business phone system is a communications platform for businesses, typically including unlimited calling, automated menus, ring groups to call multiple employees simultaneously, voicemail-to-email functionality and call recording. Types of business phone systems include Voice over Internet Protocol (VoIP), private branch exchange (PBX) and key system unit (KSU). The best phone systems for small businesses use VoIP technology, which allows you to use your business internet connection to power the whole system. Business phone systems are continuously evolving to become entire communications platforms involving text, voice and video communications as well as collaboration between hybrid and remote team members.

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 because of their advanced features, accessibility and cost. Most business phone providers include essential features like a phone number, voicemail, call routing, and unlimited local and national UK voice calls as well as overseas calls. 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 needs and suitable for your budget.

Find the Right Business Phone System for Your Business

Fill out this questionnaire to find vendors that meet your needs.

Compare Our Best Picks

BND Ribbon
Our Top Picks for 2024
Nextiva
RingCentral
Dialpad
GoTo Connect
Grasshopper
8×8
net2phone
Kinetic Business by Windstream
Rating9.6/109.0/109.5/108.8/108.7/109.5/109.3/108.3/108.4/108.4/108.3/10
Best use case

Multisite retail and healthcare

Collaboration

Small businesses

Video conferencing

APIs and customization

Voice intelligence

Remote teams

Virtual phone system

International businesses

Scaling businesses

Midsize businesses

Monthly price

£14.11-£29.83

£12.99-£29.99

£10-£25

£8-£16+

£10-£25

£12-£20

£10-£21

£11-£62

£18.87-£34.59

£14.93-£23.58

£14.93

Contract term

Monthly and annually

Monthly and annually

Month-to-month

Annual

Annual

Monthly and annually

Monthly and annually

Annual

Monthly and annually

Monthly

Annual

Customer support

24/7

24/7 with most plans

24/7

24/7

24/7

24/7 with most plans

24/7

24/7

24/7

24/7

24/7

Free trial length

7 days

14 days

Unlisted

Unlisted

Unlisted

14 days

14 days

7 days

Unlisted

Unlisted

Unlisted

Available plans

3

4

3

4

3

3

2

3

2

3

1

Offers phone hardware

Yes

Yes

Yes

No

Yes

Yes

Yes

No

Yes

Yes

Yes

Review Link
Scroll Table

Reviews

Nextiva logo
  • 24/7 customer support by phone and chat is included with all plans.
  • The call flow builder is especially easy to set up for first-time VoIP users.
  • Voicemail transcription is only available as part of the top-tier plan.
Editor's Rating: 9.6/10
Visit Site

Nextiva is a unified communications platform with features and tools to support business messaging, video conferencing and phone calls. Unlike most providers, Nextiva lets its customers mix and match plans to build their own bespoke phone system that pairs the right features and costs with each team across your organisation. Nextiva inched out the competition and led all business phone providers we reviewed with the highest average score across pricing, ease of use, features, integrations and customer support.

The platform’s excellent ease of use, customer service, mixed plans and security measures made it our top pick for multi site retail and healthcare businesses where data privacy is a necessity. Although the UK has left the EU, it’s still bound by GDPR laws which Nextiva’s network meets and exceeds.

The company’s network has to be secure everywhere, not just in Britain. For example, in its home country of the U.S., Nextiva has built its platform to adhere to stringent laws surrounding medical privacy called HIPAA. The following Nextiva services are fully compliant with HIPAA: phone service, auto attendant, call record, virtual faxing, 1:1 video conferencing, team video conferencing, audio-only conferencing, advanced interactive voice response and many software integrations. The system’s key security measures include the use of SSAE 16-certified data centres, redundant call path networks and multiple points of presence.

A benefit of Nextiva that we appreciate is how the platform is regularly updated. Recently, the desktop apps have had their functionality improved. Users can now easily search for voicemails, quickly access shortcuts and be alerted when a network connection is down. In addition, Nextiva has beefed up its ability to identify spam calls via a Caller ID alert and has made it simple for the desktop app users to customise where call alerts appear.

RingCentral logo
  • RingCentral MVP leads the industry with more than 2,000 possible integrations.
  • Business phone numbers are available in more than 100 countries.
  • You can’t mix and match service plans to build a custom solution.
Editor's Rating: 9/10
Visit Site

855-619-0564

RingCentral MVP is a cloud-based messaging, video and phone service designed for businesses of all sizes and industries. The system is a highly effective communications platform for businesses supporting remote and hybrid workforces. An easy-to-use interface and mobile apps for Android and iOS ensure staff members anywhere in the world can collaborate effectively through an open line of communication using any internet-connected device.

Use features such as team chat and messaging to create a digital workspace where you can share files and create dedicated folders and threads for projects, topics and teams. To ensure uptime and call quality, RingCentral uses 32 data centres worldwide and direct peering with more than 45 carriers and 200 internet service providers. With more integrations available than any other system we reviewed, RingCentral MVP further fuels collaboration by connecting with the other business tools you use on a daily basis to stay organised and drive productive business units.

RingCentral also offers a host of sophisticated video conferencing solutions, including RingCentral Video, RingCentral Rooms, RingCentral Webinars and the newly acquired Hopin Events, a complete platform designed for larger conferences that span multiple days.

Ooma logo
  • Ooma includes more than 50 features with its entry-level small business phone plan.
  • 24/7 customer support is included with all of Ooma’s small business plans.
  • The entry-level plan doesn’t include a video communications tool.
Editor's Rating: 9.5/10
Visit Site

Ooma splits its small business VoIP phone service into three tariffs: Essentials, Pro and Pro Plus. Unlike most business phone service providers, all of Ooma’s plans feature month-to-month pricing that’s not affected by the number of user accounts purchased. Ooma began as a consumer-focused company, and its origins are still apparent in its user-friendly interface and easy, same-day implementation. For most small businesses, Ooma’s Essentials plan serves well as a straightforward phone system that can help you provide a professional experience for callers.

Ooma is our recommendation as the best phone system for small businesses thanks to its simple interface, long list of standard features and overall ease of use in a small business environment that’s unlikely to have dedicated IT staff to help implement new systems. Ooma scores especially high on administrator usability, with simple drop-down menus to help you set modes for ring groups or business and after-hours calls. These are easy to understand for anyone who’s setting up their first cloud-based phone system.

We like how Ooma is constantly adding new tools and features to the platform. This includes the ability to create calendars that your customers and clients can visit to book time to meet with you and options to send the same text message to multiple people at once.

Zoom logo
  • You can choose between unlimited and metered, pay-as-you-go calling plans that start at £8 per month.
  • 24/7 global support is included with every plan.
  • Additional phone numbers, freephone numbers and international calling are only available as paid add-ons.
Editor's Rating: 8.8/10
Visit Site

Zoom is known best for its video conferencing service that exploded in popularity during the COVID-19 pandemic, but many don’t know the company also offers a comprehensive phone system. All four Zoom Phone plans provide access to unlimited international calling, freephone numbers and integrations with popular business tools like Slack and Salesforce. Of course, video calls are still where Zoom performs best.

Virtual meetings are a necessity for many businesses today, and Zoom provides excellent video conferencing capabilities with its phone plans. Users can elevate a call to a video conference or transfer a call to a Zoom meeting or Zoom room with just a few clicks. Zoom’s business phone and video conferencing system is accessible via desktop apps for Windows, MacOS, Linux, iOS and Android. Zoom helps teams communicate smoothly with transfer and meeting features that let you easily switch platforms and add attendees. All plans enable a business to make and receive calls from multiple devices and enable three-way ad hoc conference calls.

Vonage logo
  • Vonage has 43 standard VoIP phone features and 18 paid add-ons.
  • Significant discounts are available for large companies purchasing more than 99 accounts.
  • Plans require a one-year contract that’s subject to early-termination fees up to the total price of your service contract.
Editor's Rating: 8.7/10
Visit Site

With a desktop app, mobile app, team messaging, video conferencing and optional phone hardware, Vonage provides businesses of all sizes and industries dynamic and comprehensive phone services. From the administration portal, it’s easy to set up your call flows, add new team members to the system and integrate business tools like Bullhorn, Google Workplace, HubSpot, Microsoft 365, Salesforce, SugarCRM, Zendesk, Clio, ConnectWise, JobDiva, Microsoft Dynamics 365 and Zoho.

The ability to customise a phone system and integrate it into your existing infrastructure can make a significant difference in your business’s efficiency. Vonage’s platform is built on a microservice architecture that helps the firm react quickly to changes in the market and add new channels. The office cloud-based phone systems offer a variety of hardware options, a customisable phone menu system, a software solution with CRM integration and a suite of communications APIs. Teams can also customise the reports and data analyses recorded by the communications system, and the omnichannel contact centre operates as a fully scalable solution to accommodate expansion.

Dialpad logo
  • Every plan includes AI-powered communications features and tools.
  • The entry-level plan at £12 per month offers broad functionality to companies.
  • freephone numbers are considered an add-on and cost extra.
Editor's Rating: 9.5/10

Dialpad is a business phone and messaging service that places a heavy emphasis on AI-powered features and tools. Some of Dialpad’s advanced communications features are included in all plans, whereas with most other providers, they’re only available in higher-priced top-tier packages.

 

Dialpad differentiates itself in a competitive marketplace with its voice intelligence tools that can transcribe calls, take notes, track action items and send post-meeting summaries. You and your team can stay focused on the conversation with the assurance that nothing important will be missed or fall through the cracks if you don’t write it down. While many of Dialpad’s rivals are beginning to offer similar voice transcription tools, the company still leads this segment of the category, with live coaching tools to alert you if you’re filling natural pauses with fillers like “um,” “like” and “you know,” along with other suggestions to remind users how to communicate more effectively.

Taking advantage of its AI data, Dialpad recently released its Custom AI Playbooks tools. These are designed to give sales and customer service teams real-time coaching during their calls. We like how this ideally helps improve efficiency and allows managers to focus on other tasks besides giving feedback on how calls are being made.

GoTo Connect logo
  • You can choose between two simple plans and many add-on options to build a custom phone system.
  • GoToConnect offers free international calls to more than 50 countries with its Standard plan.
  • Incoming freephone minutes are limited with both plans.
Editor's Rating: 9.3/10

GoTo Connect is a business phone system with features that accommodate the needs of remote teams particularly well. The company’s IT support products and remote device access features are easy to use and help businesses customise their phone systems to fit their needs. GoTo Connect phone systems include an intuitive interface and visual dial plan editor, so users can create their ideal phone system without IT expertise. [See our review of the GoTo Resolve remote access product.]

GoTo Connect also provides free international calling in 53 countries, which is helpful if you have a distributed global workforce. Users enjoy the ability to call from any device in any location using local and freephone numbers that resonate with their target audience. There are two plans to choose from, though both enable team messaging, unlimited extensions and existing number porting. GoTo also offers an upgraded softphone that lets users make and receive calls from anywhere via their computer. All GoTo Connect customers also receive 24/7 customer support to help them troubleshoot issues quickly and keep their business phone system efficient regardless of where employees are located.

Grasshopper logo
  • Grasshopper adds a business number and virtual phone system to your personal mobile device.
  • Each plan allows unlimited users with monthly and annual billing options.
  • The list of available features is limited compared to other cloud-based business phone system providers.
Editor's Rating: 8.3/10

Virtual phone systems are often a vital tool for business performance, and Grasshopper offers a solution that’s fast and easy to implement and use. The technology lets you stay connected on your computer or iOS or Android device for calling and texting, so you don’t need to purchase any special equipment. Customer support is available 24/7, and the central app automatically generates easy-to-read detailed call reports.

For those transitioning to a business phone system for the first time, Grasshopper provides a straightforward and user-friendly platform that works with any existing mobile device. You can choose a business phone number from the company’s range of vanity, local and freephone numbers, or port an existing number without an additional fee. All plans feature call forwarding, voicemail, custom greetings, call transfers and virtual fax. Grasshopper’s virtual phone technology supports VoIP and Wi-Fi calling to keep conversations clear when cellular service is shaky.

Newer features added to the platform recently include improved call blocking, which is useful in stopping spam callers, and the ability to send more videos and images in your text messages. In addition, users can now access a full library of emoticons to use in messages.

8x8 logo
  • 8×8 offers unlimited calling to up to 48 countries.
  • High-definition video conferencing is available for up to 500 participants.
  • The company doesn’t have a basic phone, entry-level messaging and video service plan.
Editor's Rating: 8.4/10

Most cloud-based business phone service providers allow unlimited local and national UK calls but few offer local numbers all over the world, and even fewer include unlimited calling to 48 countries like 8×8. In addition to enabling unlimited international voice calls to 14 countries with the X2 plan and 48 countries with the X4 plan, the company has an extensive global footprint with offices in Australia, Bulgaria, Canada, France, Indonesia, Japan, New Zealand, the Philippines, Portugal, Singapore, Romania, Thailand and the U.S..

8×8’s video tools support 46 languages, ensuring international businesses can provide the right communications functions to employees virtually anywhere in the world. With such a significant international presence, 8×8’s security includes globally focused compliance for GDPR, HIPAA, FISMA, ISO 9001, SOC 2 and UK Government Assurance. The network’s two plans should be considered middle- and upper-tier when comparing them against competitive offerings. However, subscribers can mix and match between plans, providing employees and teams with the appropriate level of service without overpaying for users who don’t need advanced calling capabilities.

Net2phone
  • Net2phone offers three plans that serve as the foundation of a custom solution built to fit your needs.
  • Each plan comes with more than 40 VoIP features.
  • Integrations for CRMs and APIs are only available with the top-tier plan or as an add-on feature.
Editor's Rating: 8.4/10

Net2phone provides scalable, highly customisable phone system solutions for businesses of all sizes across industries. The company offers tailored platforms for many industries and types of businesses, including estate agencies, solicitors’ practices, hospitality, air conditioning installers, car dealerships, healthcare providers, governments and local authorities. For most businesses, growth is the ultimate goal, and net2phone helps communications operations expand with ease.

The network provides a variety of broadband calling features that can give small businesses the appearance of a larger and more established organisation. The user-friendly admin portals can help managers navigate performance reports quickly, measure efficiency and adjust features accordingly. Net2phone’s web and mobile apps allow teams to take operations anywhere and add new team members no matter where they’re based. Integrations are often a key part of operational growth, and net2phone has integrations with popular tools like Salesforce, Microsoft Teams and Slack. Huddle, net2phone’s video conferencing platform, also integrates with Google and Microsoft Outlook.

Windstream logo
  • The company offers one simple plan for unified office communications.
  • Calls, meetings and messages are encrypted in the cloud without storing any data on desk phones.
  • As a basic business phone service, it lacks advanced features and tools.
Editor's Rating: 8.3/10

Kinetic Business by Windstream offers businesses a solution called OfficeSuite UC, a cloud-based phone system that includes email, chat, calls, voicemail, fax and video conferencing. OfficeSuite is designed to make collaboration easy with software designed for communication wherever it needs to happen. To simplify operations, the central management portal unites communication tools in one platform and provides different levels of access for administrators and users.

OfficeSuite UC is an affordable and reliable option for midsize businesses, with local support professionals available to customers 24/7. Teams can view and manage all of their communications from one system, see colleague availability and make changes to the program easily from the web-based admin portal. The communications platform includes integrations for popular business tools like Microsoft Office and HubSpot. For businesses that like to centralise their services and solutions under one provider, Kinetic also provides fibre internet connections with speeds up to 1 Gbps, wireless internet backup and a private software-defined WAN designed to optimise app performance. Kinetic further offers standalone SIP trunking and barebones business phone lines.

Business Phone System Costs

A business phone system typically costs between £8 and £35 per user per month, depending on the features and level of service you select. Most providers offer plans that start at around £17 per monthly user. In many cases, advertised prices are listed with the assumption of an annual payment plan for a significant number of users. Generally speaking, the per-user price 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, which may not reflect the prices actually available to them.

Some networks, such as Zoom, offer pay-as-you-go metered pricing for calling and messaging, but this arrangement is rare. For most service providers, unlimited UK calling is included, with additional per-minute fees for international calls that vary by provider and region. Some networks also charge a one-time activation fee for new customers.

Many companies are able to lower their monthly prices by replacing standard features with piecemeal add-ons. For a lot of businesses, this is an excellent way to reduce costs — you can skip features, such as call recording, that may not be used by everyone. You can also use 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, many providers don’t offer this level of flexibility.

Most business phone system providers 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.

Business Phone System Features

Today’s business phone systems offer dozens of valuable features for small businesses. This is perhaps the greatest benefit of cloud-hosted systems: They have opened the door for small businesses to access a multitude of features without having to spend a ton of money. Previously, only larger businesses could afford feature-rich systems because of the capital required to install the necessary equipment. Fortunately, that’s no longer the case. Below are some of the functions to look for.

  • Unlimited calling: Many of today’s cloud-hosted VoIP phone systems include unlimited local and national UK calls. 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: An auto attendant answers calls made to your business and routes them to the proper employees or departments.
  • Ring groups: This feature allows you to group employees so that if a person calls needing someone in a certain group, such as your customer service team, all of the employees’ 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-emai. This feature sends audio recordings or transcripts of voicemails to an employee’s email inbox so they can read or listen to their messages even if they are away from the office.
  • Call recording: This gives you the ability to record calls. These recordings are then stored in the cloud or on your computer for playback later.

Other valuable features many business phone systems offer include extension dialling, call forwarding, call queues and integrations with services like Microsoft Office and Google Workspace. Some platforms also have tools that can boost a business’s collaboration abilities, such as video conferencing, instant messaging, presence indicators and online meetings.

Unified Communications Solutions

Today’s business phone systems offer much more than a way to make and receive phone calls. Many modern solutions, including some of our best picks, are 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 encompasses traditional phone calls, audio conferencing, video conferencing, instant messaging, online faxing and text messaging.

Many of these components used to be provided by different suppliers. For example, a business might have had one provider for its phone system, another for conference calling and a third for video conferencing. Unified communications systems tie all these into one platform with features that may include the following.

  • Phone calls: This is a traditional phone service that allows employees to make and receive calls. Most providers offer both local and freephone numbers.
  • Conference calling: Unified communications systems include a conference bridge that allows you to host your own conference calls. The number of people who can be on a call at one time depends on the provider. Some systems support five to 10 people, while others allow for hundreds of people at one time.
  • Video and web conferencing: You and your employees can host video meetings with video conferencing hardware or through a computer equipped with a camera and microphone. Most of these services allow for screen sharing, which lets everyone in the meeting view documents or presentations. The number of people who can be on a video call at one time depends on the provider. It could be just a handful or as many as 500.
  • Instant messaging: Many unified communications systems enable instant messaging. You and your team 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 text from your business line. This lets your staff send text messages to customers without revealing their personal numbers. [See our picks for the best text message marketing services.]
  • Virtual faxing: These systems allow you to send and receive online faxes while not requiring a dedicated fax machine. You can send a fax to a recipient’s email or fax machine directly from the communications platform.

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

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

Choosing a Business Phone System

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

While some businesses need only standard calling features like caller ID and voicemail, others want added functions like ring groups, an automated attendant 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 a unified communications platform 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 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 percent, find out what the company is doing to correct service issues and increase its reliability. Also ask about its service-level agreements and if contracts have any uptime-related clauses. Many business phone system providers will reimburse users if the system doesn’t meet a certain uptime percentage.

If cloud-hosted systems aren’t a good fit for your business, you need a phone provider that offers on-premises solutions. With an on-premises system, your business houses all the equipment on-site instead of via cloud-hosted PBX. These setups have higher upfront costs, but not many of the ongoing monthly fees that cloud-based systems have.

Very small businesses may want to consider whether they need a true phone system with onsite desk phones. Businesses that can get by with mobile phones may want to look into a virtual phone system instead. These 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 a specific employee or department, but the call is transferred to the appropriate employee’s cell phone instead of a traditional office phone. In addition to being well suited for very small businesses, a virtual phone system is also a great fit for businesses with large remote workforces as well as one-man bands.

Finally, consider what types of customer support the phone company offers. If you don’t have a full-time IT manager for your business or employees who can handle technical issues, you’ll want a business phone system provider that will be available to answer questions when you have them, preferably through multiple channels (like over the phone and via live chat) and online resources (such as knowledge bases and webinars).

Types of Business Phone Systems

Businesses in need of a multi-line phone system have several options. Your choices depend on where the equipment is housed, how the connections are made and what the cost structure is, among other aspects.

The equipment that provides the functionality to make and receive calls is a private branch exchange (PBX). PBX technology, whether housed onsite at a business or in the cloud, is what gives businesses all of the features and tools unified communications systems offer, such as 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 on-site PBX equipment that your in-house IT team maintains and upgrades. They also require a large upfront capital expenditure for all of the PBX equipment. However, landline systems are falling by the wayside as more and more phone system providers are no longer making equipment to support this model. The trend is moving in VoIP’s favour.

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 through the same internet connection your company uses to get online. There are two types of VoIP setups for businesses: cloud and on premises.

  • Cloud-hosted VoIP: Cloud-based phone systems house their PBX equipment in the cloud. This means 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 typically have 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 are similar to landline systems in that the PBX equipment is housed inside your business. You are required to handle all of the maintenance for it. However, these systems still facilitate calls via an internet connection rather than a 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 solutions require a large upfront capital investment and smaller monthly fees to cover the required connections for making and receiving calls.

Virtual Phone System

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

Advantages of Business Phone Systems

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 and managers. Below are some of the benefits of using today’s business phone systems.

Go beyond making calls.

Cloud-based business phone systems do far more than make calls. They support video conferencing, team messaging, SMS and online faxing. On top of that, 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.

Flexibility is another area where business phone systems have evolved, allowing employees to take calls on any internet-connected device — including computers, laptops, tablets, mobile phones and IP phones — that has 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 properly routed and received.

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 service-level agreements. As part of their analytics tools, many VoIP networks also include quality-of-service reporting, which details the level of quality for every call that’s made.

Business Phone System FAQs

All businesses can benefit from a good phone system, though not all businesses will benefit from the same type of business phone system. Communicating with your colleagues, customers and clients in a professional manner is critical. That’s why relying solely on personal mobile devices can cause problems. You want to make a great impression on your customers. A greeting from an automated attendant via a business phone system is a great first step; it shows your company is a legitimate operation.

Businesses that don’t need a traditional office phone system should at least consider investing in a virtual phone system. These allow you to present a professional image while still using your mobile device as your main communication tool. Virtual systems include automated attendants and a host of other valuable features. In addition, when you make outbound calls, your business number, not your personal mobile number, is displayed to the person you are calling.

For larger businesses, business phone systems not only help you present a professional image to your customers but also give your employees all of the communication tools they need to do their jobs well and keep in touch with co-workers. Mobile apps allow team members to take their business lines with them wherever they go, and video conferencing services ensure they can connect with anyone, regardless of where they are and how they want to communicate.

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 include other communication tools that professionals now commonly rely on.

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

Since every business is different, it’s hard to say one business phone system is the best solution to fulfill every company’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 voice intelligence.

For each use case, we examined the functions and tools that different business types need from a phone system. We then compared and contrasted the various phone system providers based on those criteria, seeing which platform could best serve a particular situation, whether it be a scaling business or a company prioritizing customization capabilities. You can read specifics on our selections in our in-depth reviews.

In today’s highly competitive market, it’s never a bad time to invest in a business phone system. There are so many providers seeking new customers that they are always offering some type of discount or incentive to sign up. This could be a few months of free service, free phones or discounted rates.

That said, we have noticed that a lot of vendors ramp up their incentives near the end of each quarter. As they close their books on the quarter, providers want to have the best sales numbers possible, so they may offer extra incentives to get more sign-ups. Consider this time frame before you start talking to companies.

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.

When you’re evaluating which one is best for your business, 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 based on landlines. Reliability was rock-solid because everything was hardwired and there was no internet to deal with. Today, as cloud-hosted PBX business phone systems have become increasingly popular, finding a business phone service that offers the same reliability as a landline system is crucial.

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

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

Before the advent of VoIP and cloud-hosted solutions, large companies were typically the only ones that could afford the expensive on-site equipment needed for a robust phone system with features like automated attendants, extension dialing and call queues. VoIP, specifically the cloud-hosted VoIP phone system, has leveled the playing field. The point of entry is no longer expensive, so small businesses can easily implement these systems in the same way large businesses can.

One difference, however, might be in the service tiers small and large businesses choose. While small businesses might select a lower-tier 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. Some packages are geared to smaller, larger or even midsize businesses based on features and pricing. But there’s nothing stopping a small business from signing up for the most feature-rich option — unless the vendor has user minimums.

The costs and pricing structure of a small business phone system depend on where the system will be hosted. If it’s hosted in the cloud, all you have to worry about is ongoing monthly fees for each user. Prices are typically $10 to $60 per user per month, depending on how many features and tools you want. However, $20 per user per month will usually get you a basic phone system with plenty of modern call handling and integration capabilities.

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 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.

The setup process depends on the kind of business phone system you choose, but a huge benefit of today’s systems is how easy they are to implement. VoIP solutions are completely managed from an online portal. Administrators can log in to the portal to assign business 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. On-premises implementations are more involved, naturally.

Employees often benefit most from a VoIP business phone system. These systems provide workers with valuable tools to facilitate all of their communication and collaboration needs. Voicemail-to-email, call recording, instant messaging and call forwarding are some of the features employees can typically access with a VoIP system.

Additionally, VoIP solutions allow lots of mobility. Many vendors offer their own mobile apps that give workers the freedom to answer and make calls to and from their business lines via their mobile devices. This helps ensure they never miss an important call.

Small business owners also are big beneficiaries of VoIP office systems. These platforms give small businesses access to features and tools that were previously affordable by only larger organizations. The ability to install these systems for a relatively low price is a huge advantage for smaller companies.

Technically, there are IP phones and analog phones. Most of today’s VoIP phone systems use IP phones. These phones plug directly into your internet router and are essentially ready to start making and receiving calls immediately. In order to use an analog phone with many of today’s VoIP systems, you need a special adapter that allows these phones to connect to your network.

author image
Mark Fairlie, Business Operations Insider and Senior Analyst
Mark Fairlie is a telecommunications and telemarketing expert who has spent decades working across advertising, sales, and more. He is the former co-owner of Meridian Delta, a direct marketing company that he successfully sold to new management in 2015. Through this experience, Fairlie gained firsthand knowledge of the life of an entrepreneur, from conceiving a business idea to growing a company at scale to transferring ownership. In the time since, Fairlie launched a second marketing company as well as a sole proprietorship. He has expanded his purview to include topics like cybersecurity, taxation and investments as they relate to B2B business owners like himself.
Back to top
Desktop background imageMobile background image
In partnership with BDCBND presents the b. newsletter:

Building Better Businesses

Insights on business strategy and culture, right to your inbox.
Part of the business.com network.