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The Best Business Phone Systems of 2023

Jessica Elliott
Contributing Writer
| Updated
Mar 31, 2023

Our team of experts has compared the best small business phone systems for 2023. See up-to-date comparisons, reviews and costs for the top-rated services.

Best Business Phone System for Collaboration
Persistent video spaces
Hundreds of integrations
Extensive knowledge base
Best Business Phone System for Analytics and Reporting
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Business forecasting tools
Built-in CRM
Professional voice greetings
Best Business Phone System for Ease of Use
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Support for analog devices
24/7 customer support
Built-in video conferencing
Best for Business Phone System Video Conferencing
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Screen sharing
Metered and unlimited calling plans
Meetings with up to 500 people
Best Business Phone System for Add-on Features
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A la carte features
Siri integration
Over 50 VoIP features
Our team of experts has compared the best small business phone systems for 2023. See up-to-date comparisons, reviews and costs for the top-rated services.

The Best Business Phone Systems

Cloud-based phone services keep your company connected through voice, video and messaging channels. The best business phone systems also improve experiences for callers and employees. But choosing the right VoIP platform can be challenging. We scrutinized dozens of phone systems and determined the best solutions for different use cases. Our reviews considered several factors, including pricing, features and ease of use. 


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How We Decided
Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.

Compare Our Best Picks

SystemBest forEditor’s scoreStarting monthly priceFree trialHosting methodFeatures and toolsVideo conferencing participant capacityPhone customer service hoursHardware for purchase
NextivaAnalytics and reporting9.4/10$17.95 per user7 daysCloud100+25024/7Yes
RingCentralCollaboration9.4/10$19.99 per user15 daysCloud50+100-20024/7 on Standard, Premium and Ultimate plansYes
Ooma OfficeEase of use9.2/10$19.95 per user30-day money-back guaranteeCloud (with on-premises hybrid option)50+25 to unlimited24/7Yes
DialpadVoice intelligence9.3/10$15 per user14 daysCloud50+10-10024/5 on Standard plan 24/7 on Professional planYes
8×8Growing businesses9.3/10$15 per user30 days for Express planCloud100+100-50024/7 for X-SeriesYes
GoTo ConnectFeatures and tools9.2/10$19 per user14 daysCloud100+4-250N/AYes
VonageAdd-on features9/10$14.99 per userNoCloud50+100Weekdays: 8 a.m. to midnight EDT Weekends: 9 a.m. to 9 p.m. EDT Emergency after-hours support availableYes
ZoomVideo conferencing9/10$10 per user, plus 3 cents per minuteNoCloud40+100-50024/7Yes
GrasshopperVirtual phones8.7/10$16 per user7 daysCloud60+None24/7No
Line2Solopreneurs8.5/10$15.9930-day money-back guaranteeCloud30+NoneWeekdays: 8 a.m. to 8 p.m. ESTNo
Net2phoneSmall hybrid teams9/10$16.99NoCloud30+Custom24/7Yes
WindstreamMidsize businesses9/10$19.95 per userNoCloud90+Custom24/7Yes

Our Reviews

RingCentral: Best Business Phone System for Collaboration

RingCentral offers Team Huddle, a chat-enabled persistent video space.
Employees can assign and prioritize activities with the task management tools.
The Essentials plan doesn't include faxing or audio and video conferencing.

RingCentral MVP puts business-critical tools on a single platform, which can help your company meet productivity goals and reduce third-party software expenses. Users can move seamlessly between messaging, voice and video channels. The intuitive desktop and mobile applications provide an accessible, user-friendly workspace for remote teams to gather, collaborate and take action. Indeed, the advanced team messaging spaces and interactive tools make RingCentral the best business phone system for collaboration.

Editor’s score: 9.4/10

Our favorite feature is Team Huddle. It’s the first feature of its kind, offering persistent chat-enabled video spaces where co-workers can stop by to chat in real time. Companies use these rooms to promote natural interactions among remote teams and so much more. You can open a space to handle HR questions around tax time or invite employees to chat with leaders during an open Q&A session. The possibilities are endless.

RingCentral provides nearly every feature a remote team could want, from built-in whiteboard tools with sticky notes to HD video meetings with breakout rooms, screen sharing, and real-time meeting transcriptions. The task management features keep employees focused, and your team leaders can track progress to ensure accountability. RingCentral also integrates with hundreds of third-party tools, allowing your team to maximize productivity by taking calls without leaving Salesforce, HubSpot or dozens of other CRMs.

RingCentral’s video meetings incorporate artificial intelligence to provide a more efficient experience for those unable to make the meeting. The platform uses AI to find the key moments within a meeting to create a video highlight reel. Additionally, AI is used to create live transcripts of the meeting. This can be especially helpful to those who might join late, as they can quickly read in on what they missed.

RingCentral has beefed up its conferencing room tools for those spending time in the office. RingCentral Rooms offers whiteboard functionality, the ability for users to share info from their mobile devices and laptops, and cameras that can pan throughout the room so those not in the room can still feel like they are full participants. The technology also included end-to-end encryption to ensure meetings are safe and secure.

In addition to secure conference rooms, RingCentral provides end-to-end encryption for the entire MVP platform, regardless of which communication channel (phone, messaging or video) you are using. This level of security, which we didn’t see in all of the systems we examined, ensures all communication is secure and that you aren’t vulnerable to an outside breach.

RingCentral MVP subscriptions include unlimited domestic calling and SMS, visual voicemail, auto-attendants, and plenty of call management tools. Although a new platform can be a learning experience for employees, RingCentral makes it easier with a comprehensive help center and free implementation services for Standard, Premium and Ultimate users. All your team admins and users can watch on-demand webinars or choose from an expansive collection of in-depth tutorials.

Read RingCentral Review

Nextiva: Best Business Phone System for Analytics and Reporting

Nextiva provides user-friendly business intelligence forecasting tools.
Subscriptions include toll-free numbers and minutes.
The Essential plan lacks SMS and MMS messaging and unlimited audio conferencing.
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NextivaOne is a top-rated unified communications platform with built-in messaging, voice and video tools. It offers dozens of features with every subscription, including toll-free minutes and unlimited internet fax. However, Nextiva’s extensive phone and customer analytics and reporting tools – and how easy it is to use them – are what really set it apart from competitors.

Editor’s score: 9.4/10

Nextiva makes your communications data actionable. It provides real-time overviews, allowing supervisors to view statistics like total talk time and total calls. Wallboards display business-critical metrics filtered by users, locations or call groups. The dashboards dig into the grittier details, showing real-time information about individual performance. Nextiva also has a fun gamification screen with leaderboards designed to motivate your employees.

The trend analysis functions look at companywide and user data. The heat map and hourly call volume stats help you identify scheduling gaps or opportunities to improve your services. All of the tools are available in the Nextiva Analytics portal – an easy-to-navigate, visually appealing application.

The NextivaOne platform is also helping users to streamline all of their communication with its threaded conversation feature. With this, users connect some of their other communication channels – text messages, email, Slack, etc. – so they can see them all in one continuous feed. This is designed to save users time from having to switch back and forth between different programs.

Of course, Nextiva offers a lot more than reporting and analytics. The cloud-based platform has a built-in CRM that captures data about customer interactions, from the last time they called to how they felt after their previous conversation with your company. This information appears on the screen before your team picks up the call. Another standout feature is Nextiva’s free professional voice greetings. A voiceover artist records your script, and Nextiva uploads it directly to your account.

All NextivaOne service plans include professional implementation support and 24/7 customer service. The company has an extensive knowledge base, packed with interactive guides, step-by-step tutorials and videos.

Read Nextiva Review

Ooma Office: Best Business Phone System for Ease of Use

Ooma's Express Setup Assistant walks your team through the straightforward process.
The cloud-based platform can work with analog devices, like overhead paging systems and fax machines.
Ooma Office has fewer call-routing options than similar business phone systems.
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When it’s time to get new phone services, the last thing you can afford is downtime. Ooma Office is built for companies that want their business phone system to work right out of the box. Subscriptions have more than 35 VoIP features, including unlimited calling to the U.S., Canada, Mexico and Puerto Rico. Ooma provides a virtual receptionist, internet fax, intercom, text messaging and overhead paging features on every plan.

Editor’s score: 9.2/10

Although you won’t find sophisticated skills-based routing that requires visual dial plan editors with Ooma, you will get 24/7 customer support and reliable voice services. It also has streamlined applications for teams that work both onsite and remotely. The pared-down feature set means there isn’t a big learning curve, and Ooma says the systems can usually be set up within 15 to 20 minutes.

Ooma has recently added a number of features and tools designed to help with call flow. This includes call queue agent log in and out options, shared voicemail boxes, virtual receptionist scheduling, the ability to transfer calls to external lines and integrations with Microsoft Dynamics 365.

Ooma provides desktop and mobile apps, or you can order pre-provisioned hardware, including desk phones and analog adapters for physical fax machines or overhead paging systems. When you purchase phones from Ooma, the company pre-configures them to your account. Upon their arrival, you can just hook them up and start taking calls.

Ooma offers three service plans for small businesses: Essentials, Pro and Pro Plus. The three plans range between $19.95 and $29.95 per user per month. The newest plan, Pro Plus, offers Salesforce integration, hot desking and call queues.

Ooma also offers two reasonably priced enterprise plans, which provide more of the tools necessary for high call volumes. These packages include CRM integrations, call monitoring and advanced call-flow configurations. Your team can access in-app customer support or connect via live chat or a toll-free phone number, as well as several how-to guides and tutorials with screenshots.

Read Ooma Office Review

Zoom: Best for Business Phone System Video Conferencing

Zoom Phone doesn't lock any features behind higher pricing tiers, whether you choose a metered or unmetered subscription.
The built-in video conferencing tools are easy to use and full of helpful features.
Zoom United plans require a minimum number of licenses for Business and Enterprise clients.
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Along with being known as one of the top video conferencing solutions, Zoom offers full-featured VoIP and unified communications plans. Unlike other business phone solutions, Zoom has both metered and unlimited calling plans, and all subscriptions include every basic and advanced feature. Its video conferencing tools also come standard with all plans and offer plenty of sophisticated options for engaging large groups or making a sale in a one-to-one meeting.

Editor’s score: 9/10

Zoom’s tools can improve your business’s video conferences by making it easy to collaborate with different teams, present new ideas and share screens. The Zoom whiteboard is an impressive feature with sticky notes and drawing tools – and your team can continue working together on the whiteboard after the meeting ends. Zoom also offers 50 breakout rooms, private and group chat, and co-annotation. For more meeting features, select a Zoom United subscription, which adds meeting recordings and social media sharing.

Zoom Phone and Zoom One plans provide many advanced VoIP features as well. These include call and queue monitoring, voicemail transcripts, call recording, and call flip. Like 8×8 and Windstream, Zoom lets you mix and match plans for your company. In addition, all subscriptions provide access to 24/7 customer support and Zoom’s in-depth knowledge base.


Vonage: Best Business Phone System for Add-on Features

You can add call queues, ring groups and on-demand recording to any subscription for an extra fee.
Vonage integrates with many third-party platforms for free, including Zoho and Zendesk.
The service plans don't include unlimited call recording, toll-free minutes or toll-free numbers.
visit site

If you’re looking for a flexible phone system with a la carte features, Vonage could fit your business. It differs from other VoIP services in that it leaves lesser-used tools off its subscriptions, allowing you to pay a lower per-user fee for mobile-only plans and only enable certain advanced features for some individuals. While Vonage isn’t the cheapest business phone system, this flexibility could save you money, as you don’t have to pay for tools you’ll never use. 

Editor’s score: 9/10

Vonage subscriptions include more than 50 standard features, such as team messaging, voicemail-to-email, and unlimited calling and texting. The Mobile plan doesn’t work with office phones, so it’s best for fully remote teams, whereas the Premium and Advanced versions include a desktop app and IP phone support. These higher-tier packages also provide CRM integrations, video conferencing with up to 100 participants, file sharing and multilevel auto-attendants. 

You can add 17 different features to your Vonage phone system for monthly fees, ranging from $4.99 for another phone number to $49.99 for companywide call recording. Other add-on features include conference bridges, paging groups, call queues, voicemail transcriptions and an AI virtual assistant. 

Vonage provides support by phone or through a web portal. While the website’s knowledge base is less comprehensive than other top-rated providers’ resources, Vonage does offer frequent live and on-demand training sessions, which focus on setup and features for users and admins.


Dialpad: Best Business Phone System for Voice Intelligence

AI-powered tools summarize meetings and generate action items.
All Dialpad subscriptions include a multilevel auto-attendant and call recording.
Dialpad only offers four- or five-digit employee extensions on the Enterprise plan, which has a 100-user minimum.

Compared to chat and email, voice communication is the most resource-intensive form of interaction, yet phone calls remain the preferred contact method for many customers. Dialpad’s automation tools help you save time and get more done without hiring another employee or leaving money on the table. In short, Dialpad Voice Intelligence (Vi) turns your conversations into actionable tasks and can help you improve customer experiences.

Editor’s score: 9.3/10

Dialpad uses natural language processing and artificial intelligence to transcribe every call and meeting, capture highlights, and analyze keywords. The speech recognition tools rely on machine learning to improve accuracy with every call. Dialpad Vi also helps your employees. You can create Real-Time Assist Cards to be triggered by key phrases, such as “I need a refund” or “What replacement part do I need?” Dialpad Vi pops a card on the screen that recommends actions for agents to take and links to helpful resources.

Although voice intelligence sets Dialpad apart, the platform also provides dozens of ideal features for small and midsize businesses. All subscriptions include unlimited calling and texting, multilevel auto-attendants, internet fax, analytics, and video conferencing. We like Dialpad’s robust app marketplace that allows you to integrate the system with numerous other popular programs, including Microsoft Teams, Microsoft Dynamics, Bullhorn, ServiceNow, HubSpot, and the Google ChromeOS Desk Connector. In addition, Pro users can integrate Dialpad with CRMs and create 25 ring groups. Like other top-rated business phone systems, Dialpad offers an extensive knowledge base, live chat and phone support.

Dialpad has also added artificial intelligence to its contact center systems. Its Ai Agent Assist enables process and compliance automation with the tools contact center agents need in one interface. Additionally, its QA scorecards automatically flag specific phrases and behavior to ensure call center agents quickly get feedback on their work.

Read Dialpad Review

GoTo Connect: Best Business Phone System for Features and Tools

Call-filtering rules let your VIP customers bypass the auto-attendant for immediate assistance.
The app and web-based tools offer more than 100 voice, video and messaging features.
The self-service knowledge base and training guides are outdated and less effective than other business phone systems' resources.

Many users are already familiar with one or more GoTo products, as it provides comprehensive tools for conferencing, webinars, training and IT support teams. GoTo Connect incorporates GoTo Meetings into its app, alongside voice calling, texting, and team messaging tools. The subscriptions offer more than 100 features and tools, making GoTo Connect a good fit for companies that want a little bit of everything, from collaboration capabilities to advanced call routing for multiple locations.

Editor’s score: 9.2/10

All GoTo Connect plans include smart call routing, unlimited extensions, call forwarding and a customizable dial plan. On the higher-tier plans, you get access to unlimited ring groups and call queues, unmetered international calls to 52 countries, real-time analytics, 1,000 to 5,000 toll-free minutes, call recording, paging, and intercom features.

Despite tons of features, GoTo Connect provides easy-to-navigate applications that unify conversation histories for each contact and give you one-click access to any supported communication method. However, GoTo Connect lacks the extensive self-service options of its competitors. It’s a little more challenging to find information on the knowledge base, and the support articles lack screenshots and videos to help visual learners. If your team is familiar with cloud-based phone systems and mobile apps, though, this shouldn’t pose too much of a problem.

For those in need of a system that can help enhance customer communication, GoTo Connect could be a good fit with its recently launched customer engagement tool. By integrating GoTo Connect with GoTo Customer Engagement, businesses can connect with customers via social media, webchat and SMS. Users will have a shared inbox that allows them to track all of their communication channels in one location. GoTo has integrated ChatGPT into this tool in an effort to make writing to and replying to customers a quick and simple process. It can also be used to create SMS campaigns and make suggestions on how to respond to customers based on their previous interactions. GoTo Engagement is available to all GoTo Connect customers.

Read GoTo Connect Review

Grasshopper: Best Virtual Business Phone System

The mobile apps are easy to navigate, allowing your team to keep personal and professional messages separate.
Small teams can save money and share lines with Grasshopper's flat-fee pricing.
Grasshopper lacks built-in video conferencing tools and isn't scalable for growing businesses.

Grasshopper is a virtual phone system that works on computers, smartphones and tablets. You can forward incoming calls to most devices, including landline phones. However, it’s not a replacement for a full business phone system. Instead, companies use it to complement an on-premises system or share call-answering responsibilities among remote team members.

Editor’s score: 8.7/10

Unlike other business phone systems we reviewed, Grasshopper doesn’t charge a per-user fee; the subscriptions include a specific number of phone lines and extensions, allowing you and a few team members to make business calls from your personal devices without giving away your private numbers. For instance, the Partner plan includes three business lines and six extensions for $49 a month, or $44 with annual billing. Technically, you could add another user or two and assign them extensions, allowing them to answer calls for your business – or select the Small Business plan, which has five lines and unlimited extensions for $89 monthly or $80 with yearly prepayment.

Regardless of your plan, all Grasshopper subscriptions have dozens of features, including call forwarding, call transfer, voicemail, virtual fax and business texting. Grasshopper also has a unique auto-reply feature, which sends an automatic text when you miss a call. Most functions are self-explanatory, but the company still provides 24/7 U.S.-based support.


8x8: Best Business Phone System for Growing Businesses

You can mix and match your company's 8x8 subscriptions to account for different employee roles.
8x8 supports global workforces, and X-Series plans offer unlimited international calling to 48 countries.
The 8x8 Express plan is limited to 10 users and doesn't include online faxing.

Business growth is a good thing, but it requires adequate resources to ensure the customer and employee experience isn’t neglected during expansion. Just like you can outgrow your office or warehouse space, you can outgrow your business tech. However, with 8×8, you can expand your services across the world and handle increased call volumes with ease. It offers a low-cost plan for up to 10 users and scales all the way to omnichannel contact center agents handling multiple call queues packed with voice and chat messages.

Editor’s score: 9.3/10

The 8×8 X-Series is a unified communications platform that places all conversations and tools on a single application, 8×8 Work. Your agents can answer calls, respond to texts, join a group chat or jump on a video call with a single click. If you promote a team member to a supervisor role, they still don’t have to switch apps: Simply upgrade their license for them to access new features, like supervisor analytics and call-monitoring tools, in the same 8×8 Work app.

These features work regardless of your team’s location. 8×8 provides local and virtual phone numbers in more than 120 countries, offers multiple languages for employee apps, and has customer support centers worldwide. With unlimited calling to 48 countries, your business can expand its market without paying more for international calls. 8×8 X-Series users get 24/7 access to live support by phone or chat. You can also take advantage of the convenient 88-second guides, which give an overview of key features and functions.

Read 8x8 Review

Line2: Best Business Phone System for Solopreneurs

You can manage up to five phone lines for your solo business from the Line2 mobile app.
All subscriptions include unlimited toll-free minutes.
Line2 doesn't offer video conferencing, integrations or collaboration features.

Your phone service doesn’t have to broadcast that you’re a company of one. With the right tools, callers will have no idea that you’re in your home office or car instead of a bustling office. Line2 helps you run your company from anywhere, as you can manage five separate phone lines from the mobile app. Each line gets its own color, so you always know how to greet the customer – which is perfect for solopreneurs juggling multiple roles or businesses.

Editor’s score: 8.5/10

All Line2 plans include a local or toll-free number and a professionally recorded greeting. You can use any internet-connected device for unlimited calling and texting. If you opt for a toll-free number, you also get unlimited toll-free minutes, a rarity among VoIP providers. Higher-tier packages are suitable for solopreneurs who bring on an employee or contractor. These subscriptions add an auto-attendant, a call scheduler for out-of-office handling, and full usage reports. However, if you’re looking for team collaboration and video conferencing features, an alternative like Dialpad or 8×8 Express is a better option. Line2 provides customer service by email, phone, or help ticket from the mobile app. It’s a reasonably simple setup, so there’s no sharp learning curve.


net2phone: Best for Small Hybrid Teams

Net2phone plans include video conferencing, text messaging and ring groups.
All subscriptions allow international calling to more than 40 countries.
Integrations are only available on upper-tier plans and may require an additional per-user fee each month.

Finding the right business phone solution can be tricky if your team is split between office and remote work. You need to give your in-house team convenient features while keeping your remote staff connected. Net2phone bridges that gap. The company works with you to devise a custom plan, including the best type and quantity of desk phones for your on-premises staff and mobile apps for your virtual team. The plan prices vary, and you have some flexibility in requesting certain features.

Editor’s score: 9/10

With that said, many features come standard with all Net2phone subscriptions. These include Huddle video conferencing, text messaging, ring groups, Find Me/Follow Me and analytics. Huddle video meetings offer YouTube livestreaming, video recording and breakout rooms.

The service also has unlimited calling to over 40 countries, similar to 8×8 and GoTo Connect but potentially at a lower price, depending on how you tailor your plan. 

Higher-tier packages add voicemail transcription, virtual fax and call queues. Net2phone integrates with several CRMs, such as Zoho and Salesforce, but you may have to pay an added monthly fee for this. Net2phone offers 24/7 U.S.-based support by phone, social media and live chat. The company also provides a relatively small but comprehensive knowledge base with tutorials, FAQs and dozens of training videos. 


Windstream: Best for Midsize Businesses

Windstream provides a unified communications platform with instant messaging, unlimited domestic calling and fax management.
Employees can use the Find Me/Follow Me feature in or out of the office.
Service plan pricing and feature lists aren't available online, making it difficult to compare packages to other solutions without speaking to a representative.

Windstream is an internet, TV, security and VoIP service provider. Its Kinetic Business brand offers a unified communications suite for up to 20,000 users. This cloud-based solution works equally well for on-premises, remote and hybrid workforces. It combines voice calling, instant messaging, faxing, conferencing and voicemail into a single platform.

Editor’s score: 9/10

Unlike other VoIP solutions, Kinetic Business by Windstream doesn’t offer many pricing details on its website, but prices start at $19.95 per user per month with a two-year contract. Your cost depends on the length of your agreement and the size of your team. We were impressed with the integrations, including HubSpot, Salesforce, 1CRM, Microsoft Dynamics and Google apps. The mobile app allows your employees to change the ring for different phone numbers, use Do Not Disturb, and forward calls to multiple devices.

Windstream includes video meeting software for up to 1,000 participants with its phone subscriptions. This software has several engagement tools, like polling, group chat, and breakout rooms. The implementation and training processes are more hands-on for Windstream than some other systems, due to the complexity involved with VoIP deployment for midsize businesses. The company provides round-the-clock phone support and live chat during business hours on Monday through Friday.


Business Phone System Costs

Multiline business phone systems have various price points and structures. The hosting method of the PBX system and equipment determines your cost structure. The costs of an on-premises system are mostly one-time, upfront expenses, while cloud-hosted phone systems revolve around monthly fees. The prices for each type of system vary by provider, the size of your team, and the features you want.

Cloud-Hosted Pricing 

Since the hosted PBX equipment is stored in the cloud, there usually aren’t any large installation or setup costs for these phone systems. Cloud-based VoIP phone systems typically cost $10 to $75 per user per month. Many office phone and unified communications system providers have several service plans that vary in price and features. Many allow businesses to mix and match service plans, ensuring each employee has access to the features they need. 

For example, a service plan that includes the basic features – unlimited calling, voicemail and caller ID, and call forwarding – might be $25 per user per month. An upgraded plan with more advanced features – such as automated attendants, call recording and ring groups – might cost $35 to $40 per user per month. 

To give you a better idea of pricing, here are some cost estimates for businesses of various sizes. (These estimates do not include taxes or other surcharges that all providers add.) 

  • 10 employees: $100 to $500 per month 
  • 25 employees: $250 to $1,250 per month 
  • 50 employees: $500 to $2,500 per month 
  • 100 employees: $1,000 to $5,000 per month 

A company using a cloud-hosted system will likely want new IP phones as well. Phones typically cost between $50 and $400 each. If you have a cloud system, some providers will rent you phones for as little as $5 each per month.

On-Premises Pricing 

While cloud-hosted systems mostly revolve around monthly recurring fees, on-premises system costs comprise mostly one-time, upfront fees. On-premises systems cost anywhere from a few hundred to several thousand dollars per user. Since all associated equipment is housed onsite at your business, there are also large installation and setup charges. Some providers have a set installation fee, while others charge a percentage of your per-user equipment fees.

The costs of on-premises systems are much more customized than they are for cloud-hosted systems. On-premises systems are typically used by larger organizations that can afford the upfront fees. For a business with 50 employees, you should be prepared to spend $30,000 to $60,000 in one-time fees for all the equipment and installation of an on-premises system.

There are also some smaller monthly fees with on-premises phone systems. To connect to a dial tone, on-premises VoIP phone service users have to pay for SIP trunking or PRI circuits. Depending on your call volume, this could be several hundred or several thousand dollars per month.

Did You Know?

Another expense that users of either type of system could incur is toll-free numbers. While some systems include toll-free numbers in the standard cost, they usually only offer a set number of minutes per month. Businesses that go over that number pay a per-minute fee for their toll-free numbers.


When you’re running a business, every penny counts. You want to make sure you aren’t overpaying for the services you use. Whether you go with an on-premises or cloud-hosted system, follow these tips to get the best deal possible:  

  • With cloud-hosted systems, there often isn’t a lot of room for negotiation. Most cloud services have set prices that depend on the features you need and how many employees you have. However, you can ask a few questions to see if there is any wiggle room in the price. Since these are monthly services, your best chance at getting a discount is committing to the company for a long period. You should see if there are any discounts for signing long-term contracts or paying for a year in advance, instead of in monthly installments.
  • Another potentially money-saving option for a cloud-hosted system is to start with a new service near the end of a quarter. Some representatives we spoke to indicated that there is more room for discounts at the end of March, June, September and December.
  • There is often more room for negotiation with an on-premises system. These systems are built for you, so, depending on how much you are spending, vendors may be willing to add some features for free to land your business. You should also always ask if they can lower the cost of installation for you, and if they’ll lower the user-licensing fees if you commit to expanding your service in the future.
  • An area you can negotiate with both types of systems is the phones. Many providers offer a lot of phone options and are willing to give you upgraded phones depending on the system you choose and how long you commit to the service. Also, they often run specials that include free phones. See what kind of phones they are offering and whether they would be willing to upgrade them if you commit to the service.
  • Regardless of the type of system you choose, it is always important to shop around and get several quotes. Even if the first one you investigate is the one you definitely want, researching other service providers could help you get a lower price when you do commit. If the system you like best isn’t the cheapest, ask the vendor if they’re willing to match the lower price. If you tell them that another system you really like is giving you a better deal, they may lower their prices to get you as a customer. 

When you commit to a business phone system provider, it will likely require you to sign a contract. It is imperative that you read all the details carefully before signing it. Make sure the terms of the contract are what you negotiated and that there are no hidden fees. 

You should also ask what taxes or surcharges will be added on top of your monthly service (and for an estimated cost of those charges). It’s important to know what your full bill will be before agreeing to the deal – not just what the service charges are. The last thing you want is to open up your first month’s bill and find it is significantly higher than you anticipated. Not only does that negatively impact your budget, but you also start off on the wrong foot with your vendor. 


You should also know what you are in for should you cancel your service or change providers. Are there cancellation fees? Do you have to provide advance notice? Can you take your local and toll-free phone numbers with you if you switch to a different service? These are questions you want answered before you agree to a contract.

Buying Guide

Types of Phone Systems

The process of choosing a business phone system requires you to answer a couple of questions. First, what type of phone connection do you want – landline, VoIP or virtual? Second, how do you want to host the system – on your business premises or in the cloud?

All business phone systems today, regardless of type, are PBX systems. The PBX equipment is what allows these systems to provide all of their features and tools, such as multiple extensions, voicemail, and call recording. However, the type of system you choose affects where that PBX equipment is physically located.

>> Learn More: Does Your Business Need an Auto-Dialer?

Your IT staff needs to install and maintain PBX equipment with on-premises systems. Conversely, cloud-hosted solutions require very little IT resources, since all of the PBX equipment is housed and maintained by the phone system provider. With the cloud-hosted option, your IT team can focus more on managing the system’s features than the infrastructure.

Read a breakdown of each type of phone system.

Traditional Landline

Traditionally, businesses used analog landline telephone systems. These systems were connected to the public switched telephone network and ran on the telephone company’s copper wiring.

While these multi-line phone systems were extremely reliable, they required expensive equipment to install and maintain. Besides the copper wiring that had to run through the business facilities, landline systems required costly PBX equipment. The PBX is what’s used to switch calls between the business and the telephone network. It’s also necessary for various calling features, such as voicemail, conference calling and automated attendants. All of this PBX equipment (and the other hardware necessary to run the phone system) would be housed onsite at the business, typically in a server room or closet.

>> Learn More: What Is Interactive Voice Response (IVR)?

Today, analog multi-line landline phone systems are becoming obsolete. Telephone companies are no longer developing new analog systems or providing updates to the systems they used to offer. Finding IT professionals with the skills to keep these systems running is increasingly difficult. Telephone companies have largely shifted their attention to VoIP technology.

Some landline systems now use a mix of landline and VoIP technology. There might be a traditional landline connection to a business, but instead of traditional wiring throughout the building, the business uses an internet connection to tap into that outside landline.

Very few new businesses are choosing landline phone service. Because support for these systems is diminishing, they are best suited for a business with an in-house IT team that is skilled in this technology and can handle all the maintenance and upgrades. However, landline systems are the only option for businesses in communities with no high-speed internet access.


Nearly all new business phone systems use VoIP. Instead of running on copper wiring like landline systems do, VoIP systems run on a high-speed internet connection. It’s the same connection most businesses already use to get online.

When you make a phone call with VoIP, your voice is instantly converted to a data packet that moves through the internet like an email or shared image would. Tapping into an existing data connection saves you the trouble and expense of installing and maintaining phone lines throughout your offices or stores.

>> Learn More: Non-fixed VoIP Systems

VoIP systems also work in conjunction with cheaper and less bulky PBX equipment. This allows small businesses to access phone features they previously couldn’t afford, like auto-attendants, conference calling and call recording. Similar to how a landline system works, the VoIP provider allows you to choose a phone number with a local area code, a toll-free number or both.

VoIP systems easily integrate with computers, which lets employees make calls from their own devices and have voicemails sent directly to their email, among other things. It can also be beneficial for businesses using CRM programs because you can use the systems in tandem.

Ease of use and scalability are big benefits of VoIP phone systems. Most VoIP systems can be managed from an online portal. By logging in to the system, administrators can assign phone numbers or extensions and turn various features on and off.

VoIP providers make it easy to add new users. Administrators can quickly log in to the portal to add new lines. This simplifies the process of setting up new employees with their own phone lines.

When VoIP was first introduced, call quality was a concern. Many people felt calls sounded staticky; others had problems with calls dropping off. As the technology has improved, so has the call quality. In fact, the difference between VoIP and landline call quality is now so insignificant that most landline callers have no idea when they are speaking to someone using VoIP.

Soon, nearly all U.S. phone users will use VoIP. The only businesses that can’t take advantage of VoIP phone systems are those in communities without access to high-speed internet service or with unreliable internet service.

Did You Know?

How you want the PBX equipment hosted is a huge factor in choosing a phone system for your business. The choice is generally between cloud and on-premises hosting, though some phone providers offer a hybrid option.

On-Premises VoIP

With an on-premises system, the PBX equipment is installed inside your business. Your IT team is responsible for securing it, keeping it up and running, and upgrading it when necessary. Hosting your phone system on your business premises lets you keep several traditional landlines working alongside SIP-trunked VoIP lines.

Like landline systems, on-premises VoIP systems have all the equipment installed and housed onsite at the client business. The hardware is typically stored in the business’s server closet.

With this option, you have total control of your system. You aren’t relying on anyone else to ensure it’s running, and you can configure it to your exact specifications. However, this also means your own IT staff has to handle all repairs and upgrades.


On-premises systems must be professionally installed, and you will need SIP trunking or PRI circuits to connect a dial tone to the system.

One benefit of this hosting method is tighter security. On-premises systems don’t have the same security concerns as cloud-hosted solutions, since all your data is stored within your business. You can configure your firewalls exactly how you want to protect your phone system from any type of intrusion. This makes on-premises hosting the best option for businesses with highly sensitive phone data that can’t entrust it to cloud-based phone providers.

Other businesses well suited for on-premises phone systems are large corporations that can afford the upfront costs and businesses that want a system they can customize extensively.

Cloud-Hosted VoIP

Cloud-hosted phone systems are increasingly popular among small businesses. With this type of system, the equipment is housed in the cloud by your service provider, which handles all maintenance and upgrades. The only equipment you need is the phones themselves.

Most cloud systems are essentially plug-and-play. Once you activate your service and receive your phones, you can plug them into any Ethernet port, then make and receive calls with them.

The downside to cloud-based solutions is that you’re at the provider’s mercy to keep your service up and running. Most of the top vendors build several redundancies into their systems to ensure this. For instance, they have multiple data centers so that if one goes down, the data can be transferred seamlessly to another center to ensure the continuation of your business’s communications service.

One important consideration in a cloud-hosted system is bandwidth. Consult your business’s internet service provider about the bandwidth required to support a new phone service. Most of the cloud providers we considered require just short of 100 Kbps per phone call for the best quality. You’ll also want to estimate your internet needs for other equipment, such as computers, servers and Wi-Fi-connected devices.

>> Learn More: Optimize Your Network for VoIP

Cloud-based VoIP systems are ideal for small businesses: They have few upfront costs, the consistent monthly charges fit easily into a budget, and they don’t require trained IT experts to keep them running. You can add new users and features through a convenient online portal, and cloud-based options also easily support multiple locations.

Nearly all of the providers we examined have an uptime of at least 99.99%. That means their systems are down for just a few minutes each year. It’s still best to install backup equipment that can reroute your business calls during power or internet outages.

Virtual Phone System

Virtual phone systems differ from regular office phone systems in that, when someone calls your business phone line, they aren’t necessarily calling a dedicated number to a phone inside your office. Instead, they call a virtual phone number that routes calls to you (or your employees) wherever you are.

Virtual phone systems are essentially extensive call-forwarding systems. Your business has a main number, with each employee receiving their own extension. Instead of transferring customers to an employee’s office phone, the virtual system transfers calls to their mobile and home phones. Employees control the numbers their business calls go to and the order in which those numbers ring. Virtual PBX systems also offer other valuable features, including automated attendants, voicemail, voicemail-to-email, music on hold, call forwarding and online faxing.

These systems are ideal for businesses that don’t need a full-fledged phone system. This could include solopreneurs who work out of their homes and don’t want to give out their personal phone numbers to clients, and small businesses with a remote workforce. This service allows them to present a professional image at a fraction of the cost of complete phone systems.

Desktop Phones

Once you decide which type of phone system you want, you need to choose the actual phones. (This doesn’t apply to virtual systems, of course.)

Most business phone services are compatible with various IP phones and offer adapters so analog phones can connect to their systems. You can likely continue using any phones your company already owns.

IP phones come in various styles. There are cordless phones and conference room phones as well as traditional corded options. The phones can cost anywhere from $50 to $1,000 each. The per-phone analog adapter can cost up to $60, and a traditional fax-machine adapter costs $100 to $150. If you don’t want to buy the phones outright, some providers let you rent phones for a monthly fee.

The benefit of buying IP phones from your phone system provider is that they come completely configured and ready to use once you plug them in. If you buy phones from a third party, your IT team will need to configure them to work with the system you use.

If you can afford it, it makes sense to upgrade your phones. If you can’t afford new phones, carefully consider how much the workaround will cost your company in the long term.

Phone System Features

Today’s business phone systems are full of valuable features and tools. Some VoIP providers have a few dozen features; others offer over 100.

Calling Features

  • Unlimited calling: Most of today’s VoIP phone systems allow an unlimited number of incoming and outgoing calls. This usually only applies to domestic calls and calls using local phone numbers, though. Many providers impose extra charges and restrictions for toll-free calling.
  • Voicemail: Each employee has access to their own voicemail. Most systems allow you to check your voicemail from anywhere.
  • Voicemail-to-email: When you get a voicemail, the system sends you an email with your message as an audio attachment.
  • Caller ID: You can see the number of the person calling you.
  • Speed dial: Instead of dialing an entire number, you can push just a couple of buttons to connect to the numbers you call most.
  • Personal directories: A personal directory is an easy way to manage your contacts. It gives you access to your contacts’ phone numbers whenever you need them.
  • Do Not Disturb: When working on a big project or important task, you can put your phone in this mode to prevent interruptions. Your phone will not ring, and all callers are sent directly to voicemail.
  • Automated attendant: An auto-attendant automatically answers calls to your business, plays a greeting, and directs the caller to the person or department they are trying to reach. [Related article: 5 Reasons You Should Consider Using a Virtual Receptionist]
  • On-hold music: You can choose the music callers hear while they wait on hold.
  • Paging: You can use your phone to send a message to everyone. This is similar to a traditional intercom system.
  • Presence: This shows employees whether their colleagues are on a call or available to chat.
  • Call reports: This feature provides analytics on your company’s phone usage. You can often break down usage statistics by filters such as employee or department.
  • Online management: All VoIP systems can be managed in an online portal. From the portal, you and the other administrators can add users, set phone numbers, review call reports, create ring groups, and see monthly statements. Employees can also access the portal to check their voicemail, see a company directory and set their call-forwarding routes.
  • Call forwarding: Your office phone can automatically forward calls to another number, such as your cell phone when you’re out of the office.
  • Call recording: Most phone systems give you the ability to record your calls.
  • Call queues: This tool is typically used in call center settings. It puts callers “in line” so their call can be answered when operators become available.
  • Extension dialing: Employees can use this to dial a co-worker by their extension instead of their entire phone number.
  • Ring groups: You can create ring groups for employees who answer calls from the same set of customers. For example, your customer service team might have its own ring group. The entire group is notified when a caller asks to speak to a customer service representative.
  • Directory assistance: This allows callers to access a company directory to help them reach the employee they are looking for.
  • Call transfer: Employees can quickly transfer calls to their colleagues.
  • Speakerphone: Many IP phones include a speakerphone option that allows you to speak to a caller without using the phone’s handset.

Another popular feature is the ability to turn your computer in a softphone. This allows you to make and receive calls from your laptop or desktop computer.

Unified Communications System Features

In addition to all of the calling features, today’s phone systems offer, some providers offer unified communications systems. Besides phone service, UC systems include conference calls, video and web conferencing, online faxing, and text and instant messaging.

  • Conference calling: Most phone systems include a conference bridge that allows users to host their own conference call with several dozen participants. If your system’s conference bridge doesn’t support as many callers as you need, you may need a separate highly rated conference call service.
  • Video conferencing: Video conferencing allows you and your team members to host online meetings from your computers or from rooms with video conferencing equipment. You can share your screen with participants during these meetings.
  • Instant messaging: Many UC systems allow employees to instant-message each other. This is an easy way for co-workers to communicate without leaving their desks or all being in the same place.
  • Texting: Some systems allow you to send SMS messages from your business phone number.
  • Internet faxing: Instead of hooking up a traditional fax machine, you can send faxes from your computer with this feature.

Mobile Apps

Mobility is another important aspect of today’s business phone and UC systems. Most of them offer an app for iOS and Android mobile devices that lets your employees tap into their business phone lines wherever they are.

The biggest benefit of a mobile app is that you and your employees can make and receive calls with your business phone line wherever you are. This allows you to leave the office, even if you expect an important call. When out of the office, you can also make a call from your business phone number via the app. This allows you to keep your personal number private without using multiple cell phones.

The mobile app also lets you review your call history, check and manage your voicemail, IM your colleagues, start one-on-one video calls, and view your online faxes.

Frequently Asked Questions


Whichever type you choose, every business needs a phone system. At the very least, a business phone system helps you present a professional image. Having customers or clients reach you on your personal phone line might be practical in some instances, but it doesn’t project the image that most businesses are striving for.

Even if you can’t spare the money or don’t need office phones, you can still use a virtual phone system for a professional appearance. This service directs calls to your mobile phone while still giving you access to key features like automated attendants and voicemail transcripts – and without requiring you to give out your personal number to business contacts and prospects.

>> Learn More: When Should You Upgrade Your Phone System?

As your business grows, so will your communication needs. A unified communications system can meet these needs. Not only will your employees have their own business lines, which they can access from anywhere with a mobile app, but they can also take advantage of other communication tools, like video conferencing.

All things considered, your business, regardless of its size and whether you operate out of an office or your own home, would do well to invest in some type of business phone system.


How long a business phone system lasts depends on the type you use. In the case of a cloud-hosted system, however, how long it lasts isn’t really a concern; cloud providers handle all of the maintenance and upgrades. All that key equipment is stored on the provider’s end, so they can work on it anytime without interrupting your services.

On-premises systems are different. Since the equipment for these systems is housed on your servers, it has a shorter life span. If you have an IT team to maintain this equipment properly, you can expect it to last five to eight years.


The exact way a business phone system works varies by type (landline, cloud or virtual). Still, the general principle is the same for each: Business phone systems provide ways for your customers and business contacts to reach you by telephone and vice versa.

Each user of a business phone system has either a dedicated phone number or an extension. When someone calls that number, their office phone, or any other phone they are having their calls forwarded to (such as their cell phone), will ring.

Business phone systems use PBX equipment to provide many features and tools that expand their functionality. These features typically include an automated attendant that answers calls to your business and then routes those calls to the appropriate person. The PBX equipment also allows for tools like voicemail, caller ID, conference calling, instant messaging, and call recording.


The cost of just one business landline can run $50 to $100. Businesses typically require more than one line, though; they also want PBX equipment and the added features of business phone systems.

In all, businesses can expect to pay several hundred to several thousand dollars for a landline system. However, landlines are becoming obsolete. Phone system providers are investing in the continued development of VoIP systems. Because of this, no new technology is being developed for landline phone systems, and the number of technicians who can maintain and service these systems is declining.


A unified communications system is a service that gives businesses all of the communication tools they want to use in one platform. Besides phone service, UC systems include conference calls, video and web conferencing, online faxing, instant messaging, and text messaging.

Many providers now offer these complete systems rather than simple phone systems. Having all these tools on one platform can not only save your business hundreds (if not thousands) of dollars a month, but also boost your employees’ productivity and make things easier for them. Instead of toggling between different services to access each tool, employees can just log in to their UC portal and tap into all their communication apps from the same place.


A four-line phone system is designed for very small businesses, providing phone service for up to four users. Four-line systems typically don’t include the wide range of features that VoIP business phone systems do.


It would be best to consider several factors when choosing a business phone system. First and foremost, it should support all of your employees. Most modern systems allow you to add lines easily and can accommodate hundreds or even thousands of users. Some providers require a minimum number of users, which very small businesses can’t always meet, so make sure the system you want can support your team size.

The second factor to consider is whether it offers all the tools your employees need. Besides the traditional calling features, does it offer video conferencing, conference calling, text messaging or any other communication methods you want? You may want a provider that allows you to mix and match service plans. This way, you can ensure each employee has the tools they need without paying for enhanced plans for employees who don’t need every feature.

>> Learn More: What is a VoIP Business Number?

Price should also be a consideration, of course. With so many options on the market, you should be able to find a service that fits in your budget. In addition to the per-user cost, you should get a true sense of your monthly bill once all the fees and taxes have been included.

Strong customer support is the final quality you must consider when choosing a business phone system provider. In an ideal world, the system would always work perfectly, but that is rarely the case with any piece of technology. Make sure the provider you choose offers the support options you want, such as 24/7 phone support, live chat operators or helpful online guides.


While there used to be big differences between phone systems for large and small businesses, all sizes of businesses now have access to the same types of solutions.

Before cloud-hosted PBX systems became an option, only larger businesses could typically use sophisticated phone systems with many features and tools. The on-premises PBX equipment necessary to power those features was so expensive to buy and maintain that only large businesses could afford it. That left small businesses with simpler options that didn’t have the bells and whistles that their larger counterparts could enjoy.

Cloud-hosted business phone systems have leveled the playing field. Instead of paying thousands of dollars for PBX equipment, small businesses can now tap into the same features for a fraction of the cost. Cloud-hosted systems provide all the features and tools for a much smaller monthly fee. Besides, since the equipment is housed in the cloud, there is nothing to maintain or upgrade.

The cloud has allowed small businesses to use phone systems they could never have before. They can access features like auto-attendants, on-hold music, call recording, voicemail-to-email, and video conferencing, which only larger businesses could afford previously. Cloud-hosted VoIP phone systems give every business the means to present a professional image regardless of size.


Your VoIP business phone system will run on the same connection your company uses to get online, so the first thing you need is a strong internet connection. For the system to run smoothly, you need enough bandwidth to support your call volume and the rest of your online business activities. You must also set your router to prioritize voice calls over other online use.

If you use a cloud-hosted system, the only other supplies you need are the phones, since all of the PBX equipment is hosted in the cloud. The PBX equipment is what powers all of the phone system’s functionality.

>> Learn More: Looking For a Business Phone Number, but Not a Business Phone?

You will need all PBX equipment hosted inside your business facilities if you operate an on-premises VoIP phone system. This type of equipment typically needs professional installation.

Most of today’s systems are compatible with IP phones and analog phones. However, if you use analog phones, you will need a special adapter to connect them to your system.


VoIP is the type of connection used to run the phone system. A VoIP system makes calls and receives over an internet connection. Traditional landline systems relied on copper wiring to provide those functions.

PBX (private branch exchange) is the equipment that provides the features and tools of the phone system. Both VoIP and landline systems rely on PBX equipment. The difference is that some VoIP systems are housed in the cloud, so you don’t need to install PBX equipment within your business location. On-premises VoIP and traditional landline systems use PBX equipment installed and stored inside your business, most often in the server room.

Chad Brooks contributed to the writing and research in this guide.

Jessica Elliott
Jessica Elliott
Contributing Writer
Jessica is a technology writer specializing in business communications, marketing and customer management tools. She analyzes software and breaks-down complex subjects, helping leaders make strategic decisions.
Image Credit: scyther5 / Getty Images
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