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Updated Apr 10, 2024

The Best Business Phone Systems of 2024

Jessica Elliott
Jessica Elliott, Senior Analyst & Expert on Business Operations
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Best Business Phone System for Collaboration
  • AI-powered meeting insights
  • Always-on huddle spaces
  • Hundreds of software integrations

855-619-0564

Visit Site
Links to RingCentral
  • AI-powered meeting insights
  • Always-on huddle spaces
  • Hundreds of software integrations
Best Business Phone System for Ease of Use
  • A guided setup assistant
  • Analog device support
  • 50+ VoIP features
Visit Site
Links to Ooma Office
  • A guided setup assistant
  • Analog device support
  • 50+ VoIP features
Best for Business Phone System Video Conferencing
  • YouTube and Facebook streaming
  • Personalized waiting rooms
  • Metered and unlimited plans
Visit Site
Links to Zoom
  • YouTube and Facebook streaming
  • Personalized waiting rooms
  • Metered and unlimited plans
Best Business Phone System for Add-on Features
  • Extensive communication APIs
  • Basic and advanced add-ons
  • Mobile-only subscriptions
Visit Site
Links to Vonage
  • Extensive communication APIs
  • Basic and advanced add-ons
  • Mobile-only subscriptions
Best Business Phone System for Analytics and Reporting
  • Business forecasting tools
  • Real-time wallboards
  • Threaded conversations
Visit Site
Links to NextivaONE
  • Business forecasting tools
  • Real-time wallboards
  • Threaded conversations

Table of Contents

Open row

Modern phone services combine PBX (private branch exchange) functionality with internet-based calling, aka VoIP (Voice over Internet Protocol). Unlike a traditional office phone system, cloud platforms unify voice, video and messaging in a single app. However, the best business phone systems provide advanced features, like AI-enabled analytics. These tools improve experiences while informing decisions. We tested dozens of VoIP phone services and evaluated them based on usability, pricing and features.

Why You Should Trust Us

At business.com, we’ve independently evaluated hundreds of business software and services to determine the best products for small businesses. Our expert editorial staff identified the best business phone systems based on firsthand experience, comprehensive research and rigorous testing. Each product was analyzed and rated on a number of factors, including cost, communication options, ease of use and features. The business.com team prioritizes accuracy and fairness in all of our assessments. Learn more about our methodology.

What is a Business Phone System?

A business phone system is more than just a tool that lets you make and receive phone calls. Today’s business phone systems are complete unified communications systems that allow you to communicate with customers and clients in a variety of ways. Today’s top systems provide phone service, video conferencing, text messaging, internal messaging, online faxing and much more. Most of the leading business phone systems utilize VoIP technology, which provides the functionality needed to offer dozens of useful tools and features, like unlimited calling, visual voicemail, call recording and automated attendants. In addition, most of the best phone systems don’t require a standard office phone. Many have desktop and mobile apps that let users operate the entire system from the desktop computer or mobile device.

Tip Bulb

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.

75

Considered

20

Researched

13

Selected

Compare Our Best Picks

BDC Ribbon
Our Top Picks for 2024
RingCentral
Ooma Office
NextivaONE
Dialpad
GoTo Connect
Grasshopper
8×8
net2phone
OpenPhone
Acefone
Aircall
Rating (Out of 10)9.19.08.98.99.08.98.87.98.89.08.98.08.5
Best For

Collaboration

Ease of Use

Video Conferencing

Add-On Features

Analytics an Reporting

Voice Intelligence

Interal IT Support

Virtual System

Growing Businesses

Hybrid Teams

Solopreneurs

24/7 Support

Small Call Centers

Monthly Cost of Cheapest Plan (Per User)

$30 for 1 to 49 users

$19.95

$10

$17.99 for 5 to 19 users

$29.95 for 5 to 19 users

$23

$24 for 11 to 20 users

$31

$28

$24.99 for 5 to 19 users

$17

$15.99 for 10 to 19 users

$40 with a 3-user minimum

Annual Cost of Cheapest Plan (Per User)

$20 for 1 to 49 users

N/A

$10

N/A

$20.95 for 5 to 19 users

$15

$22 for 11 to 20 users

$28

$24

N/A

$13

$12.99 for 10 to 19 users

$30 with a 3-user minimum

Length of Free Trial

14-days

30-day money-back guarantee

Not listed

Credit-based for APIs only

Not listed

14-days

Not listed

7-days

Not listed

Available after a conversation with sales

7-days

7-days

7-days

Video Meeting Capacity

100 to 200

25 to 100

100 to 1000

100

25 to 250 with NextivaONE

10

4 to 150

N/A

500

Custom

N/A

N/A

N/A

Internet Fax

Yes

Yes

N/A

Add-on

Yes

Add-on

Yes

Yes

Yes

Yes

N/A

N/A

N/A

SMS/MMS Limits

25 to 200

Unlimited

Varies

Unlimited

Unlimited

Unlimited

40 to 80

Unlimited

Unlimited

Custom

Unlimited

Unlimited

Unlimited inbound and 4000 outbound

Unlimited International Calling

No

No

Yes, add-on

No

No

No

Yes

No

Yes

Yes

No

No

Yes

Review Link
Scroll Table

Our Reviews

RingCentral: Best Business Phone System for Collaboration

  • Feature-rich team spaces support real-time interactions, ideal for increasing engagement.
  • AI-powered video conferencing tools generate meeting insights and summaries.
  • This business phone service costs more per user than most competitors.
Editor's Rating: 9.1/10

855-619-0564

Visit Site

Intuitive team spaces, hundreds of integrations and built-in video conferencing services make RingCentral the best phone system for collaboration. Remote and hybrid teams can pop into persistent chat and video spaces to unravel an unexpected challenge, or elevate a team messaging session to an audio call with one click. Best of all, RingCentral’s 24/7 technical support and comprehensive self-service materials enable your staff to hit the ground running and take full advantage of all the features RingCentral offers.

RingCentral provides nearly every feature remote employees could want, from integrated whiteboard tools with sticky notes to HD video meetings with breakout rooms, screen sharing and real-time meeting transcriptions. An interactive team calendar and task management tools keep projects organized, from turning messages into tasks to tracking time. Also, we love the ability to color-code personal folders and projects.

RingCentral 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. Of course, all plans include basic and advanced calling features, including a multilevel auto attendant and unmetered domestic calling.

We like how RingCentral also offers a full suite of video conferencing solutions, including RingCentral Video, for traditional meetings, RingCentral Rooms, for in-office use, RingCentral Webinar, for larger conferences, and new Hopin Events, an all-in-one event management platform for hybrid and virtual events, such as conferences or summits that have multiple tracks over several days.

Ooma Office: Best Business Phone System for Ease of Use

  • Ooma’s Express Setup Assistant walks your team through the straightforward process
  • Users can answer calls from a browser with the Ooma Office Chrome Extension.
  • It has fewer video calling features than similar business phone systems.
Editor's Rating: 9/10
Visit Site

Ooma Office is an excellent choice if you want a business phone service that takes minutes, not hours, to install. It’s the best small business phone service for ease of use because of its streamlined feature set and intuitive mobile and desktop apps. We appreciated the three-step setup process through the Express Setup Assistant, as it let us add users and configure the virtual receptionist quickly. Also, Ooma supports analog devices, from fax machines to paging systems, and you can purchase pre-provisioned desk phones. Simply input information for up to 20 phones, and Ooma will do the rest.

Ooma caters to small companies, helping them transition from an on-site PBX to a cloud-based phone system. The company provides 24/7 customer support, and its website clearly details all features and add-ons. All subscriptions have more than 50 VoIP features, including unlimited calling to the U.S., Canada, Mexico and Puerto Rico. While the virtual receptionist has fewer routing options than competitors, it’s much easier to configure. Plus, the platform is great for employees that monitor multiple lines because Ooma displays the ring group name (like sales or customer service) before the user picks up the phone.

The  Ooma Office iOS widget simplifies use on mobile devices, as it has buttons for the keypad, voicemail and recent contacts. Users can answer business phone calls without opening the app. Conversely, desktop users can access calling tools from a browser or advanced features in the desktop app. Microsoft 365 and Google Workspace integrations improve functionality while Caller Info Match displays customer information (from CRMs, social media channels and more) on the screen. The Ooma Office phone system also has video conferencing services, call recording and hot desking.

Newer features to the platform include online bookings, which allow users to create a web page linked to their Microsoft Outlook or Google Calendar and then invite customers and clients to visit the page to schedule a meeting. Another recently released feature is the ability to send text messages to multiple recipients at one time, eliminating the news to copy and paste the same message to each person being sent to.

Zoom: Best for Business Phone System Video Conferencing

  • Some of the VoIP and video conferencing service plans let users livestream to YouTube and Facebook.
  • Add-on packages for online meetings allow up to 1,000 participants.
  • Zoom does not provide 24/7 customer service to all users and admins.
Editor's Rating: 8.9/10
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Zoom’s well-known, easy-to-use software combines video, chat and voice features into a single application. Its familiarity increases technology adoption, reducing the number of users in your organization that use unsanctioned free meeting tools. Personalized waiting rooms and enhanced host controls let moderators set permissions and mute attendees, allowing leaders to improve security without sacrificing security. Also, unlike RingCentral, Zoom’s whiteboard tools work in the breakout rooms. For these reasons and others, Zoom Phone is the best business phone service for video conferencing.

We were impressed with the video quality and presentation tools. You can share slides while keeping your video on the screen, more closely mimicking in-person demonstrations. Multiple people can share the spotlight during online sessions, and you can pin up to nine feeds, so they display regardless of who is speaking.

Zoom recently added a new analytics dashboard where admins can review users AI Companion usage. Utlilizing the dashboard will give organizations a deeper insight into how their team members are adopting AI. The AI Companion tool provides a number of valuable services. It can generate meeting summaries and future meeting invites.

The overall value is another compelling reason for choosing Zoom. The Business Plus plan costs $25 for unlimited calling and whiteboards. It includes all VoIP and call center tools. Some competitors charge substantially more for similar features. Still, we like that employees who make and receive a low volume of phone calls can remain on the $10-per-user metered plan. Regardless if your staff member has a pay-as-you-go subscription or an unlimited version, they can access voicemail transcripts, flip devices during calls, and use desk phones or mobile devices.

Vonage: Best Business Phone System for Add-on Features

  • Extensive APIs let companies incorporate voice and messaging tools into their existing workflows.
  • Vonage users can add call queues, ring groups and call recording to any business line for an extra fee.
  • Unlike some competitors, Vonage does not include toll-free numbers with subscriptions.
Editor's Rating: 8.9/10
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Vonage is the best small business phone system for add-on features due to its pay-as-you-go APIs and 17 a la carte features. Whereas competitors pack subscriptions with every tool imaginable, Vonage lets companies choose add-ons to expand their phone functionality. These range from an AI virtual assistant to metered or unlimited extensions. This flexibility allows seasonal businesses to scale up during peak seasons and down when call volumes decrease.

Our favorite add-on is the conversational AI Virtual Assistant for Vonage Business Communications. It’s a customized solution designed to solve specific use cases, such as helping clients change travel reservations and handling overflow during an emergency. We also appreciate that we could add (or remove) ring groups, call queues and integrations from the admin portal.

More than 50 standard features come with all business plans, including team messaging and SMS. We like the Mobile subscription, as it helps companies save money. You don’t have to pay for desk phone functionality for an employee who uses a mobile phone only but needs unlimited calling. Likewise, admins can add call recording to a single line or enable it companywide.

Nextiva: Best Business Phone System for Analytics and Reporting

  • NextivaONE Threaded Conversations put all customer communications in one spot.
  • It provides user-friendly business intelligence forecasting tools.
  • The business phone system caps video conferences at 45 minutes.
Editor's Rating: 9/10
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Nextiva’s sophisticated reporting tools help companies understand the most profitable business hours and identify training opportunities. Companies can ditch the spreadsheets and use Nextiva trend analysis to increase visibility into past, present and future activities. Indeed, Nextiva’s business intelligence features make it the best small business phone system for analytics and reporting. And with NextivaONE’s desktop apps, users can see a customer’s history, from emails to text messages, without switching applications. We liked how Nextiva is constantly updating its software. Most recently, the desktop apps were updated to make it easier to find voicemails and know when your network connection is down. Additionally, the platform has made it easier to identify potential spam calls and gives desktop app users the ability to choose where their call alert appears.

We were impressed with how easy creating one-time and recurring reports was. But we also loved how Nextiva provided step-by-step tutorials for making your communications data actionable. These guides showed us new ways to get more out of our information, such as tracking performance at multiple locations and determining an ad campaign’s effectiveness. But Nextiva’s analytics aren’t only for supervisors. It offers real-time wallboards and gamification tools.

Other standout features of Nextiva’s cloud-based phone system include a built-in CRM, auto attendant, and local and toll-free business phone numbers (with up to 12,500 toll-free minutes, depending on the plan). All subscriptions work with desk phones, or employees can use mobile and desktop apps. This flexibility means Nextiva works equally well for remote employees and office staff.

Dialpad: Best Business Phone System for Voice Intelligence

Dialpad
  • AI-powered tools summarize meetings and generate action items.
  • All Dialpad subscriptions include a multilevel auto attendant and call recording.
  • Dialpad limits video conferences to 10 participants.
Editor's Rating: 8.9/10

Dialpad is the right business phone system for companies that want to leverage AI in their workplaces. It’s our top choice for voice intelligence because all plans include speech recognition tools for voice and video calling. These advanced tools use machine learning and natural language processing (NLP) to analyze calls. Companies can train Dialpad Voice Intelligence (Vi) to recognize industry terms and competitors by developing a company dictionary and recording calls. We were impressed with the amount of data Vi captured, allowing us to generate meeting insights and action items automatically.

Dialpad Vi also assists employees while they’re on a call. It offers recommendations to slow their talking speed or speak clearly. Unlike competitors, Dialpad provides visual voicemail with all subscriptions. Users receive transcriptions via email or can save them automatically to a Google Drive, creating a compliance-ready audit trail. Voice intelligence also increases visibility into your business communications. Reporting tools break down calls, moments, minutes, keywords and texts. It shows statistics by user or group.

Dialpad recently released its Custom AI Playbook for sales and customer service teams. The playbook leverages Dialpad’s proprietary data and speech recognition tools to provide real-time coaching for users that can be helpful while in the middle of calls. The playbook is designed to help improve efficiency amongst those making sales and customer service calls.

The best part is that you won’t pay a premium for these tools. Dialpad is cheaper than several business phone service providers, including RingCentral and 8×8. And it does not skimp on calling features. Along with unlimited domestic calling, Dialpad provides a multilevel auto attendant, executive assistant pairing and ring groups.

GoTo Connect: Best Business Phone System for Internal IT Support

GoTo Connect
GoTo Connect company logo
  • Users can submit a help desk ticket to your IT team without leaving the GoTo Connect app
  • The admin dashboard shows call quality, device status and more for all GoTo products.
  • It does not offer unlimited SMS with any plans.
Editor's Rating: 8.8/10

GoTo Connect is our top pick for internal IT support teams because it has a built-in ticketing feature and offers bundled plans for IT help desks. By centralizing management, companies can handle billing and user permissions for all GoTo products through a single admin dashboard. The portal also shows system health in real time, allowing admins to manage devices and identify call quality issues for users, departments and locations. Also, we were impressed with its vast feature set, with plans offering tools for on-site, remote and hybrid employees.

The VoIP help desk feature lets employees report problems for over a dozen categories, including email, phone system and website. IT teams can filter tickets by priority or type and view additional information, like the user’s device history. GoTo Connect offers a unique package for tech support employees. This subscription bundles GoTo Connect Resolve with unlimited calling and team messaging. Your group can assist clients online or return a call. And with unmetered calling to 52 countries, you don’t have to worry about international calling fees.

All GoTo Connect plans include smart call routing, unlimited extensions, call forwarding and a customizable dial plan. We appreciate GoTo Connect’s recent update, which added call volume analytics to the dial plan editor, allowing admins to see real-time data and analyze trends. In addition, there is an upgraded softphone that ensures users can make and receive calls directly from their computer. The all-in-one business phone service also supplies toll-free minutes with certain plans and integrates with Google Workspace, Salesforce and Zoho.

Grasshopper: Best Virtual Business Phone System

Grasshopper
  • Users can keep personal and professional phone calls separate on their smartphones.
  • Small teams can save money and share lines with Grasshopper’s flat-fee pricing.
  • Grasshopper lacks built-in video conferencing tools.
Editor's Rating: 7.9/10

Grasshopper is the top-rated virtual phone system because one monthly fee covers unlimited users and all plans include 24/7 customer service, call forwarding and business texting. It differs from other small business phone systems because subscriptions include one to five phone numbers. Admins can choose a local, vanity or toll-free number, or port an existing business number. While Grasshopper can’t replace a full office PBX service, it can complement your analog service or turn a personal phone into a professional device.

We found instant replies valuable. It sends new contacts a text message automatically if you miss a call. In addition, the virtual assistant welcomes callers with your custom greeting, and they can choose from various extensions, even if the same person will answer them. The small business phone system includes mobile and desktop apps, and you can forward calls to an analog desk phone number.

Grasshopper has also introduced some new features and tools recently, including the ability to send multiple videos or images at one time (up to 1MB), delete multiple messages at one time and use emoticons in your messages. Additionally, there is an improved call blocking system that is easily accessible from a centralized page on the desktop app.

8x8: Best Business Phone System for Growing Businesses

8x8
  • Companies can mix and match plans for knowledge workers, supervisors and call center agents.
  • 8×8 supports global workforces with unlimited international calling to 14 or 48 countries.
  • Only the most expensive plan includes speech analytics.
Editor's Rating: 8.8/10

Not all small business solutions grow with your expanding company, as many VoIP providers require all users to subscribe to the same package. However, 8×8’s mix-and-match flexibility helps your company scale operations to support multiple locations and new job roles like receptionists and call center agents. It’s the best business phone service for growing companies because 8×8 provides tools that enable organizations to expand worldwide, from unlimited international calling to direct inward dial (DID) or virtual phone numbers in over 120 countries.

The 8×8 X-Series is a unified communications platform that places all conversations and tools on a single application, 8×8 Work. As you give an employee new duties and roles, the additional functionality appears in their desktop app. For instance, if a colleague moves into a supervisor role, they can access call monitoring tools like call barge, whisper and take over without switching applications. Leaders can host meetings with 500 participants, the highest video conference capacity among business phone providers.

If you expand operations internationally, 8×8 works equally well in your employee’s native language. The desktop and mobile apps support multiple languages and provide chat messaging translations for 10. Call quality remains solid, regardless of your location, as does customer support, considering that 8×8 has global data centers and customer service agents.

net2phone: Best for Hybrid Teams

net2phone
  • It supports SIP trunking for legacy phone systems.
  • Net2phone users can call more than 40 countries for free.
  • CRM integrations and APIs are available only on upper-tier plans.
Editor's Rating: 9/10

Unlike other cloud-based phone services, net2phone can connect your on-premises PBX system via SIP trunking. This can help your company avoid buying new phone equipment but allow you to benefit from VoIP connectivity. Android, iOS, Mac and Windows apps keep your staff connected regardless if they work on-site or from home. Every subscription includes over 40 features, and you can customize your plan to include specific tools or phone rentals.

Regardless of where your team works, they can page co-workers, see who’s available to chat and send text messages. The net2phone service includes video conferencing; you can even stream to YouTube. It also supports screen sharing, breakout rooms and video recording. We appreciate the call routing and management tools, which let us provide time-based greetings and use the find me, follow me feature, so we never miss a call.

Companies can use digital faxing and physical fax machines with net2phone. Plus, 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.

OpenPhone: Best Business Phone System for Solopreneurs

OpenPhone
OpenPhone logo
  • A mini-CRM helps entrepreneurs manage customer contacts.
  • Auto-replies and scheduled messages allow owners to communicate, even when off the clock.
  • Users can’t host video meetings with OpenPhone.
Editor's Rating: 8.9/10

OpenPhone provides virtual phone numbers and unique features, allowing entrepreneurs to add a second line and advanced functionalities to their cell phones. A quick actions menu, auto-replies and voice commands are a few reasons we chose OpenPhone as the best solution for solopreneurs. After all, maintaining a work-life balance is challenging for business owners, and OpenPhone takes this into account with tools that work, even if you’re offline or asleep.

We were impressed with messaging tools that let us schedule messages for different dates and times. Also, the auto-reply tool responds to voicemails, texts and missed calls, giving the impression that we were working 24/7. Apple CarPlay support and Siri enable solopreneurs to multitask while on the go. Simply ask Siri to read, send a message, or check your call logs. We also appreciated the scanning tool, which let us scan and send documents while chatting with clients. In addition, we used saved message templates to remind customers to submit a review after their purchase.

The softphone app keeps private and business calls separate. It routes calls according to preset business hours and allows users to record calls on demand or automatically. Each line has its own inbox, making it easy for solopreneurs to manage their customer service and sales roles. OpenPhone connects to CRMs via Zapier. But it also has a built-in mini CRM, which lets users add custom properties to contact records. Although we prefer OpenPhone for solopreneurs, you can add an employee or contractor without switching services, as OpenPhone provides several team collaboration features, like shared inboxes and internal chat threads.

Acefone: Best Business Phone System for 24/7 Support

Acefone
Acefone logo
  • It’s the least expensive service offering a dedicated account manager.
  • Acefone walks you through the initial onboarding process.
  • The platform lacks video and collaboration tools.
Editor's Rating: 8/10

If you’re new to internet-based phone systems or transitioning from a landline, Acefone provides the hands-on support you need. It provides 24/7 customer service via live chat, a toll-free phone number and email. Additionally, all subscriptions offer assisted onboarding. With the Premium plan, you can access priority support, a dedicated account manager and a personalized setup. The per-user price for Premium ranges from $12.99 to $19.99, depending on the number of users and billing frequency. This price range is the cheapest we found among systems for this level of support.

Acefone offers over 65 features, including several advanced tools for managing higher call volumes. Both service plans include real-time call monitoring, whisper and call barging, which helps supervisors assess call quality. Admins can configure a multilevel interactive voice menu and leverage automatic call distribution to route calls efficiently. You can even let callers schedule a call back when experiencing long wait times.

Aircall: Best Business Phone System for Small Call Centers

Aircall
Aircall logo
  • It integrates with more than 100 business applications and tools.
  • Supervisors can assign follow-up calls and leave comments on records.
  • SSO is limited to the most expensive plan, whereas it is included with the base subscription of some competitors.
Editor's Rating: 8.5/10

While several business solutions offer call center add-ons or separate platforms, these may require a minimum number of users and rarely provide unlimited outbound and inbound calling. Aircall is our top choice for small call centers because it supports teams of three or more users and allows unmetered calls in the U.S. and Canada. The Custom plan even includes unlimited international calling, perfect for sales teams wanting to connect with prospects worldwide.

Aircall software has a unique wrap-up feature, giving agents time to take notes, tag calls and assign follow-up tasks without interruption. We especially liked the live feed for supervisors. It lets managers see who’s on a call and check real-time metrics. With over 100 integrations, Aircall syncs with your help desk or CRM software, so your team can always access the most recent customer notes and comments. It also provides every feature common with business phone systems, including SMS, call recording, desktop and mobile apps, call queuing, and ring groups.

Business Phone System Pricing

Multiline business phone systems have various price points and structures. The hosting method of the PBX service and equipment determines your cost structure. The expenses of an on-premises system are mostly one-time, upfront fees, while cloud-hosted phone systems revolve around monthly fees. The prices for each type of phone 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 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. Some allow businesses to mix and match service plans, ensuring each employee has access to the tools they need.

For example, a service plan that includes the basic features – unlimited calling, voicemail, 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 rent 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 services cost anywhere from a few hundred to several thousand dollars per user. Since all associated equipment is housed on-site 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 those for cloud-hosted systems. Large organizations that can afford the upfront expenses typically use on-premises services. A business with 50 employees 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. On-premises VoIP phone service users must pay for SIP trunking or PRI circuits to connect to a dial tone. Depending on your call volume, this could be several hundred or several thousand dollars per month.

Did You Know?Did you know
Another expense that users of either system could incur is toll-free numbers. While some providers include toll-free numbers in the standard cost, they usually offer only a set number of monthly minutes. Businesses that go over that number pay a per-minute fee for their toll-free numbers.

Negotiation

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-based phone 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 based on the plan tier and your number of employees. 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 by committing to the company for a long period. You should see if there are discounts for signing a long-term contract or paying for a year in advance instead of monthly installments.
  • Another 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 installation cost for you and if they’ll reduce 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 equipment depending on the service and contract length. Also, they often run specials that include free phones. See what kind of phones they offer and whether they would be willing to upgrade them if you commit to the service.
  • Regardless of the type of system you choose, shopping around and getting several quotes is always important. Even if the first one you investigate is the one you want, researching other service providers could help you get a lower price when you 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 fees to get you as a customer.

Many providers require a contract for phone service. It is imperative that you read all the details carefully before signing it. Make sure the agreement terms 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). 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.

TipBottom line
You should also know what to expect should you cancel your service or change providers. Are there cancellation fees? Do you have to provide advance notice? If you switch to a different service, can you take your local and toll-free VoIP phone numbers? These are questions you want answered before you sign a contract.

Types of Phone Systems

When choosing a business phone system, you should answer a few 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 VoIP business phone systems today, regardless of type, are PBX systems. The PBX equipment allows these systems to provide most 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.

Your IT staff needs to install and maintain PBX equipment with on-premises systems. Conversely, cloud-hosted solutions require minimal IT resources since all 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.

Traditional Landline

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

While these multiline 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 switches calls between the business and the telephone network. It’s also necessary for various calling features, such as voicemail, conference calling and automated attendants. This PBX equipment (and the other hardware required to run the phone system) would be housed on-site at the business, typically in a server room or closet.

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

Today, analog multiline landline phone systems are becoming obsolete. Telephone companies no longer develop new analog systems or provide updates. It is increasingly difficult to find IT professionals with the skills to keep these systems running. Telephone companies have largely shifted their attention to VoIP technology.

Some landline systems now use a mix of landline and VoIP technology. A company might have a traditional landline connection. Instead of wiring throughout the building, the business uses an internet connection to tap into that outside landline.

Very few new companies 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.

VoIP

Nearly all new business phone systems use VoIP. Instead of running on copper wiring as 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. Tapping into an existing data connection saves you the trouble and expense of installing and maintaining phone lines throughout your offices or stores.

VoIP business phone 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. Like a landline system, the VoIP provider allows you to choose a phone number with a local area code, a toll-free number or both.

VoIP platforms 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 benefit companies using CRM programs because you can use the systems in tandem.

Ease of use and scalability are big benefits of VoIP phone systems. Most internet-based services 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. 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?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 IT staff must handle all repairs and upgrades.

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 intrusion. This makes on-premises hosting the best option for companies with highly sensitive phone data that can’t entrust it to cloud-based providers.

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

Cloud-Hosted VoIP

Cloud-hosted phone systems are increasingly popular among small businesses. The equipment is housed in the cloud by your service provider, which handles all maintenance and upgrades. The only hardware 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 running. Most 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.

A critical 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 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.

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.

Nearly all providers we examined have an uptime of at least 99.99%. That means their systems are down for just a few minutes each year. Still, power or internet outages can disrupt your connection. Fortunately, many VoIP business phone systems provide failover options, which forward incoming calls to an analog or cell phone. This feature supports business continuity during an emergency.

Virtual Phone System

Virtual phone systems differ from regular office phone systems. 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 central 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 from home and don’t want to give out their personal phone number to clients as well as 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 VoIP 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, conference phones and 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

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

Unlimited Calling

Most of today’s VoIP phone systems allow unlimited incoming and outgoing calls. However, this usually only applies to domestic calls and calls using local phone numbers. Many providers impose extra charges and restrictions for toll-free calling.

Voicemail Options

Each employee has access to their own voicemail. Most systems allow you to check your voicemail from anywhere. VoIP providers also offer visual voicemail and voicemail-to-email. The former lets you see a list of your voicemails and listen to them in any order, whereas the latter sends an email with your message as an audio attachment.

Caller ID

You can see the number of the person calling you. The caller ID appears on desk phones or through a softphone on your computer or mobile device.

Speed Dial

Instead of dialing a seven-digit number, you can push one button to connect to the numbers you call most. This feature applies to desk phones, but many softphone applications provide a favorites list for your most-used contacts.

Personal and Company Directories

A personal directory is an easy way to manage your contacts. It gives you access to your contacts’ phone numbers whenever needed. A company directory displays every employee (and their contact information).

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.

Single and Multilevel Automated Attendants

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. Advanced systems may offer multilevel auto attendants, which offer more extensive options, including transferring the caller to another auto attendant or IVR system. [Read 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. Most vendors offer prerecorded tracks; others let you upload a custom music playlist, which may include messages for callers.

Paging

You can use your phone to send a message to everyone. This is similar to a traditional intercom system. Also, certain services can connect your VoIP system to a physical paging system.

Presence

This shows employees whether their colleagues are on a call or available to chat. Some solutions let users choose a status like out-of-the-office, away from my desk or in a meeting.

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 dashboard, 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, view a company directory and set call-forwarding routes.

Call Forwarding

Your office phone can automatically forward calls to another number. This could be a mobile phone, another employee’s line, or an external VoIP or analog phone.

Call Recording

Many cloud-based phone systems give you the ability to record your calls. Depending on the phone provider and administrator settings, this feature may be on-demand or automatic.

Call Queues

This tool is typically used in call center settings or companies with high call volumes. It puts callers “in line” so their call can be answered when operators become available.

Extension Dialing

Employees can dial a co-worker by a three-, four- or five-digit extension instead of their entire phone number.

Ring Groups

You can create ring groups for employees who answer calls from the same group 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.

Call Transfer

Employees can quickly transfer calls to their colleagues. Some solutions offer warm transfers, which let you speak with your co-worker before passing the call.

Speakerphone

Many IP phones include a speakerphone option that allows you to speak to a caller without using the phone’s handset.

Did You Know?Did you know
Another popular feature is the ability to turn your computer into a softphone. This lets you make and receive calls from your laptop or desktop.

How to Choose Business Phone Systems

The best business tools and technology fit into existing workflows and improve communications. However, what works for a solopreneur or small team may not satisfy the needs of a small to midsize business. Since your phone service is a vital business technology, comparing your options carefully and considering several factors before deciding on a solution is crucial.

1. Develop your use cases.

Decide who will use your business phone service, what they will use it for and where. List employees and their locations (on-site, remote or hybrid). Identify specific communications requirements, such as the ability to host video conferences or share files. Also, determine which team members need hardware, such as desk phones or headsets.

2. Evaluate your options.

Think about the differences between phone systems and determine whether you want an on-premise or cloud-based service. Estimating short- and long-term costs for each approach is a good idea. Remember to factor in phone equipment and international calling expenses.

Next, go through user reviews on third-party sites and the Better Business Bureau. Look for guides that break down differences among services. Also, request recommendations from professional groups. After researching solutions, develop a list of potential vendors.

3. Review pricing and features.

Use a spreadsheet to compare providers. Enter features, prices and any capabilities that stand out. Also, make a note of customer support options and see if the vendor offers additional integrated projects, such as webinar tools or helpdesk software.

4. Set up demonstrations and trials.

Several business phone services provide on-demand demos in exchange for your contact details. Others will set up a meeting where company representatives answer your questions and walk through various functions based on your specific use cases. Also, take advantage of free trials. This allows your team to test the mobile and desktop applications, different features, and admin panel. Remember to interact with customer support to assess response times and agents’ familiarity with the system.

5. Request input from your team.

Once you’ve documented each company’s details and tested the software, ask your team to weigh in. Encourage them to share their experiences and concerns. With their input, decide what training your employees will require and how this impacts your decision. Look for a VoIP service that fits your budget while serving the needs of your staff.

Benefits of Business Phone Systems

A professional phone number gives your company credibility in the eyes of consumers. Cloud-hosted services also reduce costs and help businesses scale operations while enhancing customer and employee experiences.

Lower Costs

Many companies switch to VoIP to save money. Unlike an on-premises system, your business isn’t responsible for server maintenance or upgrades. A cloud service’s flexibility means you don’t necessarily need hardware. Employees can use their existing computers or cell phones for free or add an analog telephone adapter to connect analog desk phones.

Better Customer Experiences

Advanced features like auto attendants and customer relationship management (CRM) integrations translate into satisfying customer experiences. Clients can reach the correct department or select an employee by name through the company directory. Likewise, employees see ring group details (the line your caller chose) and customer information, such as when they last called or their survey results. This enables your staff to personalize their greeting and meet customer expectations.

Scalability

With a VoIP phone service, you can add or remove lines, features, and user permissions from the admin dashboard. Call reports provide insights about call volumes and missed calls, which informs scheduling and hiring decisions. These capabilities help small businesses scale operations to meet demand.

Increased Productivity

The best business phone systems of 2024 unify business communications, resulting in less application switching. They also provide virtual receptionists and IVR menus, reducing call transfers. AI-powered tools can generate voice and video summaries, highlight action items, and track assigned task progress. Moreover, admins can schedule recurring reports to keep leaders abreast of call volumes without performing the same steps weekly or monthly.

TipBottom line
Boost productivity by selecting a phone system that offers task management, collaboration, integrations and video services. This will reduce the time your employees spend toggling between programs, which studies show creates inefficiencies.

Frequently Asked Questions

Modern phone services send data packets over the internet, whereas conventional systems rely on copper phone lines. Both support one or more business phone numbers, extensions and call forwarding. Also, companies can add PBX features to VoIP and POTS (plain old telephone service). A PBX allows users to make extension-to-extension calls and increases your call routing capabilities.

Even if your company operates entirely online, you may want a business phone number. Most financial applications, state and local registrations, and website privacy policies require your business’s contact information. You should use a separate phone number to avoid confusion (and unwanted spam calls). Additionally, a corporate line shows customers that your company is credible.

>> Learn more: Need a Business Phone Number, but Not a Business Phone?

Most small businesses want two or more business phone lines, but this figure will vary based on your call volume and company size. Many business phone systems require a stand-alone line for an auto attendant, and you may also want a separate line for faxing.

No. Today’s VoIP phone services provide softphone applications for your smartphone. These apps separate personal and professional calls and display your company’s phone number on the recipient’s caller ID.

Most companies use a cloud-based phone system through a VoIP provider, as it offers the lowest price and most flexibility. However, regions with poor or spotty internet connections require a conventional PSTN (public switched telephone network). Alternatively, solopreneurs and small teams may prefer a virtual phone service that forwards calls to their cell phones.

>> Learn more: How Often Should You Upgrade Your Phone System?

After purchasing a phone service, you can download an app for your desktop and mobile devices. This lets you almost instantly make and receive calls. For businesses, you can add users, send invites to employees, and configure the settings with custom routing and call forwarding rules. Additional steps may be required, depending on your company’s size and the system’s complexity.

Yes. Most regions have one or more telecommunications providers that sell landline and PBX services for businesses. The cost ranges from $50 to $100 per line and requires onsite installation.

A unified communications (UC) 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 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.

VoIP is the type of connection used to run the phone system. A VoIP system makes and receives calls 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.

What to Expect in 2024

Although some employees returned to the office in 2023, the desire for flexible communications isn’t going away. In addition, businesses increasingly factor interoperability, big data, third-party vendor contract consolidation, security and automation features into their purchasing decisions. In short, VoIP adoption continues to dominate the market, and industry leaders are rolling out new capabilities to retain their market share.

VoIP Market Growth

Internet-based phone services continue to experience high growth and adoption rates. MarketWatch estimates that the global VoIP market size will grow at a compound annual growth rate (CAGR) of 14.66 percent between 2022 and 2028. Likewise, ResearchAndMarkets.com expects the global mobile VoIP market to reach $165.3 billion by 2028, an increase of 19.5 percent CAGR during the forecast time frame.

The video conferencing segment of mobile VoIP realized the most growth in 2021. While conventional internet-based systems focused on voice calls, most modern services include video tools in their software packages.

Indeed, Verizon’s Small and Midsize Business Outlook and Technology Adoption Study found that 73 percent of respondents added or upgraded communications networking hardware as of March 2022. In addition, “77 percent either added or upgraded technologies that support connectivity since the start of the pandemic, including web conferencing tools, bandwidth, and high-speed internet.”

Mergers, Acquisitions and Strategic Partnerships

In 2023, RingCentral announced that it is continuing its strategic partnership with Avaya, a business communications technology company. The purpose of their relationship is to move Avaya’s on-premises customers to Avaya Cloud Office by RingCentral.

The largest acquisition in 2022 involved the information and communication technology provider Ericsson and Vonage Business Communications. This $6.2 billion investment enables Ericsson to leverage Vonage’s vast developer community and drive the creation of communication APIs.

Ooma acquired Junction Networks Inc., known as OnSIP, in 2022. Both companies are well known for their ease of use and customer support services. The acquisition allows Ooma to expand its business services and continue to “make cloud communications approachable for small businesses.”

Also, in 2022, GoTo purchased Miradore, a mobile device management product. GoTo integrated Miradore capabilities into GoTo Resolve, allowing for “flexible end-to-end support and management of all devices for small and midsize businesses.”

Additionally, Verizon expanded its strategic partnership with Microsoft by launching Verizon Mobile for Microsoft Teams. In a press release, CEO of Verizon Business Sampath Sowmyanarayan said, “What we’re hearing from customers is a need for the true mobilization of unified communications and collaboration to support their hybrid work environments.”

Emerging Technologies Driving VoIP Feature-Sets

Several of the best business phone systems in 2024 updated their feature sets. These include Vonage’s low-code and no-code developer platform (Vonage AI studio) and RingCentral’s offering single sign-on with its entry-tier package. Many providers also enhanced their AI capabilities, improving real-time transcriptions and automating repetitive activities.

Here are ways cloud-based phone systems will evolve to support small businesses better:

  • Interoperability: Strategic partnerships improve the quality of integrations. Corporate phone customers look for solutions that let employees use their existing tech stack to make internet-based phone calls and record communications data. You can expect more low-code or no-code tools for incorporating business phone features into other applications.
  • Big data: Small companies embrace big data thanks to built-in business intelligence and analytics tools. Voice, video and messaging provide a wealth of information about a company’s customers and processes. We expect to see more cloud services using AI tools to generate insights from communications data.
  • Security: Cybersecurity plans address vulnerabilities and create standards for technology decisions. Look for more phone providers to include end-to-end encryption and zero-trust architecture for video, voice and messaging services. Also, we believe more providers will share a software bill of materials to support companies that work with federal agencies.
  • Vendor consolidation: The sheer number of cloud services brings complexity to work environments. All-in-one platforms allow companies to shrink the number of third-party vendors they work with. We predict that businesses will choose unified communications platforms over voice-only services.
  • Automation: With a tight labor market and rising costs, small businesses need all the help they can get. Automation features let them streamline processes and eliminate repetitive tasks. We anticipate that VoIP services will promote AI-powered tools that increase productivity.
Jessica Elliott
Jessica Elliott, Senior Analyst & Expert on Business Operations
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.
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