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Benefits of VoIP Phone Systems

Sean Peek
Sean Peek
business.com Contributing Writer
Updated Sep 14, 2022

VoIP is a multifunction system. Here are the benefits of using these systems for your business.

A VoIP phone system can be a powerful tool for commercial and personal use. Every VoIP phone system on the market comes with different attributes tailored to the consumer’s individual needs. This guide will explore what a VoIP phone system is, the benefits of a VoIP, the trade-offs and top-rated systems.

What are VoIP phone systems?

VoIP stands for Voice Over Internet Protocol. This technology allows a user to place a voice call using a broadband internet connection. A VoIP system does not require an analog phone line. Many VoIP services offer various benefits to fit the customer’s exact needs.

Despite the differences in VoIP phone systems, they all use the same basic technology. A VoIP service converts a user’s voice into a digital signal, transmits it over an internet connection, and converts it back into audio. For the service to work, both the user and the recipient must have a broadband internet connection and the proper equipment. Depending on the VoIP service, a user will need either a computer, an adaptor or a specialized phone device. Before purchasing a VoIP phone system or choosing any other type of business phone system, consider how it will impact your business.

Did you know?Did you know? The VoIP industry is growing rapidly. The mobile VoIP market is expected to reach $183.7 billion by 2027.

What are the benefits of VoIP phone systems?

Excellent call quality

The person you’re calling can’t tell whether you’re using VoIP or POTS (Plain Old Telephone Service) – there’s little difference in quality. While it’s true that there might be occasional hiccups in transmission, the technology has evolved to the point where service interruptions or interference are no more frequent than with a POTS connection, and call quality is considerably better than typical cell phone reception.

Low cost

Domestic calls are free, or at the very least, less expensive than POTS; while international calls are also much less expensive and, in certain cases, free as well. A VoIP phone number, sometimes called a virtual number, is not directly associated with the physical network of a landline, but appears to be so. Thus, people from another country could place calls to you at the local rate instead of the higher international rate because your virtual phone number seems to be within their local exchange, even though it’s not.

The cost of voice calls is lower, a cost savings multiplied times the number of employees and the frequency of calling. Also, VoIP integrates data and voice communications (including cell phones) in a more cost-efficient manner. Instead of trying to make two types of communications systems work together, the two are already bundled together. While the main point of VoIP may be to make inexpensive phone calls, it comes with added functionality, including high-fidelity audio, video and web conferencing; as well as file transfers, shared presentations and computer desktop control – all with tremendous capabilities for tracking, analyzing and reporting data.

Convenience and versatility

Virtual phone numbers can be assigned to ring on multiple devices: a landline phone, a cell phone or a work or home phone. You can also assign multiple phone numbers to ring on a single handset. At the most basic level, VoIP service is almost hassle-free. Myriad providers are available to anyone with a computer and an internet connection. All you have to do is download the software, and in a few minutes, you can start making calls.

Multifunction system

SIP (Session Initiated Protocol)–enabled VoIP handsets can handle any kind of communication, whether voice or data: regular phone calls, faxes, voicemail, email, web conferences and so on. You could, for example, listen to your email or record a voice message that you could send to a fax machine. The handsets are also scalable – you can add and subtract features as needed without switching out hardware. The plug-and-play capability means that you don’t need a support team to reconfigure the network every time new extensions are added. All you need to do is plug the handset in and it’s ready to go.

Efficient and secure

Allowing voice and data communications to run over a single network greatly reduces corporate infrastructure costs; the larger the company, the greater the savings. For companies concerned about security, VoIP already has the capability to use standardized encryption protocols, which is much more difficult to provide on a regular telephone connection.

Hardware is inexpensive and versatile

In addition, VoIP handsets are less expensive than traditional telephones and are simpler to reconfigure. Dual-mode VoIP handsets are capable of switching from a cellular connection to a building Wi-Fi even during a conversation, eliminating the need to provide employees with both a cell phone and a “regular” office phone. This not only reduces overall expenses, but lowers maintenance by half, as there are fewer devices to track, control and support.

Comes with a virtual assistant

Some other handy business features include auto attendant – also called a virtual assistant – which not only plays pre-recorded music or messages for callers on hold, but also routes calls to departments as well as individuals. This makes your company look bigger than it is – even if the “accounting department” consists of your father-in-law, this feature gives customers the impression that you have a larger organization.

Can be used as a tracking system

Another interesting feature is sometimes called Find Me, Follow Me, Call Hunting or Advanced Forwarding. It allows a handset (or a phone number) to move wherever the person goes, whether it’s in the office, at a convention center, or using a home phone or cell phone. A variation of this is Presence, which allows you to track where employees are, and defines rules as to locations where the handset should or should not ring.

Integrates well with other systems

Many VoIP systems also integrate emails and calendar systems such as Microsoft Outlook. This lets you click to dial an Outlook contact and automatically record calls you make and receive.

To make VoIP calls, a person or business needs the following:

  • A high-speed broadband internet connection (at least 256 kilobytes per second: DSL, cable, newer satellite or anything that isn’t dial-up)
  • A modem
  • A computer equipped with a microphone (these days even the least expensive computer has one), or an adaptor to a regular phone (only necessary in lieu of a computer)
  • Software from a VoIP provider

In most cases, voice calls (whether made by regular telephone or another VoIP number) placed to a VoIP number can be received on the computer itself; or routed to a regular telephone, cell phone or smartphone.

While there are dedicated VoIP phones for consumers, most of these systems are aimed at business use. A hybrid approach – intended mostly for consumers without computers – is to sell an adapter that can be plugged into a regular telephone handset.

FYIFYI: Many VoIP systems are cloud-based phone solutions. There are a number of pros and cons to employing a cloud-hosted phone system.

What are the downsides of VoIP phone systems?

If VoIP is such a great deal, why hasn’t it put the phone companies out of business? Well, because nothing is ever perfect. While it’s true that traditional phone companies are slowly going the way of the dinosaur – and VoIP is one of many factors leading to their final extinction – there are still a number of things the copper wire connections that date back to Alexander Graham Bell do well that VoIP systems do not.

Can be unreliable

While you can get some kind of 911 service over VoIP, it is typically expensive, and not always as reliable.

If your internet goes down, there goes your phone system, not just emergency calls. The traditional phone company has backup power for all its circuits, which is why even in a blackout, you can still call for help on your corded phone, or talk to your neighbors if need be.

Limitations with international calls

International calling can be iffier on VoIP than a regular landline connection, particularly to countries where the phone network is more extensive than the internet, and especially so when neither is of high quality. (Take note of the list of countries covered by each particular VoIP plan.)

TipTip: As of 2022, there were 1,405 VoIP businesses in the United States, according to IBIS World. That’s why you should consider a variety of options before deciding on the final one.

What are the best business phone systems?

There are many different VoIP phone system options for businesses. Here are some of the best business phone systems to choose from:

Nextiva

If your business is focused on analytics and reporting, consider testing Nextiva. Supervisors will be impressed by its ability to provide real-time data such as total talk time and total calls placed. The statistics are presented in easy-to-read wallboards. You’ll be able to filter data by location, user or even call groups.

This VoIP phone system comes with a built-in CRM displaying collected data to support your business’s sales teams. The VoIP system also provides users with a professional voice greeting system. Learn more in our full Nextiva review.

RingCentral

If your focus is team collaboration, consider using RingCentral for your VoIP phone system. RingCentral users will enjoy how the platform integrates tools into a single format to reduce workflow clutter. Productivity can reach an all-time high with RingCentral’s user-friendly workspace and seamless tool transition.

Fully remote teams should consider RingCentral for its Team Huddle feature. This first-of-its-kind feature allows virtual teams a place to chat in real time. The feature can be used for a variety of purposes, but it shines for team meetings. RingCentral also offers built-in whiteboard features and sticky notes to create the perfect virtual meeting space. Learn more in our complete RingCentral review.

Ooma

If your business is concerned about ease of use, try  Ooma. This streamlined VoIP phone system has eliminated the bells and whistles to ensure effective usability right out of the box.

Ooma also offers 24/7 customer support and reliable voice services. Additionally, there are detailed tutorial guides available for customers who prefer to troubleshoot the service themselves.

If you need to expand in the future, Ooma offers an advanced service tier for Salesforce integration, call queues and hot desking capabilities. Learn more in our review of Ooma.

Vonage

Vonage is an optimal choice if your company is concerned about adding additional services over time. Vonage allows the user to determine which features are necessary through an a la carte subscription service. The subscription structure lets the user only pay for what they need.

Unsure what add-ons your team will need? Vonage provides a free consultation with a business phone system specialist for prospective businesses. Learn more in our review of Vonage.

Zoom

If you regularly use video conferencing, consider Zoom. This VoIP phone system gained worldwide usage during the COVID-19 pandemic for its reliability and ease of use. Zoom’s main selling points are screen sharing and video conferencing for up to 500 individuals.

Subscription plans offer both metered and unlimited calling options. All call features are offered at both plan options.

Sean Peek
Sean Peek
business.com Contributing Writer
Sean Peek has written more than 100 B2B-focused articles on various subjects including business technology, marketing and business finance. In addition to researching trends, reviewing products and writing articles that help small business owners, Sean runs a content marketing agency that creates high-quality editorial content for both B2B and B2C businesses.