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The Best Business Phone Systems of 2020

By
Chad Brooks
,
business.com writer
| Updated
Oct 25, 2019
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Small Business Phone System Reviews for 2019

Businesses have what seems like endless choices in 2019 when it comes to business phone and unified communications systems. Whether it's landline or Voice over Internet Protocol (VoIP) systems, on-premises, cloud-hosted or virtual, businesses have hundreds of options to choose from. With so many possibilities, choosing the one that will best serve your business can be a challenging process. To help you with the task, we have conducted our own research to identify the best business phone systems for different types of businesses.

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Editor's note: Looking for a business phone system? We can help you choose the one that's right for you. Use the questionnaire below to receive information from a variety of vendors for free:

 

 

Phone System Costs

Multiline business phone systems have a variety of price points and structures. How the PBX system – and the equipment that is used to run the phone system is hosted – are the determining factors in how your costs will be structured. 

The costs of an on-premises system are mostly one-time, upfront expenses, while cloud-hosted phone system costs revolve around monthly fees. The prices for each type of system vary based on the provider, how many users your small business has and how many features you want access to. 

Cloud-Hosted Pricing 

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

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

To give you a better idea on pricing, here are some estimates of what it might cost for businesses of various sizes. These estimates do not include taxes or other surcharges that all providers tack on to the cost: 

  • Business with 10 employees: Service may cost between $100 and $500 per month.
  • Business with 25 employees: Service may cost between $250 and $1,250 per month.
  • Business with 50 employees: Service may cost between $500 and $2,500 per month.
  • Business with 100 employees: Service may cost between $1,000 and $5,000 per month. 

In addition to monthly fees, those using cloud-hosted systems will likely want new IP phones. 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. In addition, since all associated equipment is housed within your business, there are large installation and setup charges. Some providers have a set installation fee, while others may charge a percentage of your per-user equipment fees. At a minimum, you can expect to pay several thousand dollars. 

The costs of these systems are much more customized than they are for cloud-hosted systems. These types of 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 upwards of $30,000 to $60,000 in one-time fees for all of the equipment and installation needed for an on-premises system. 

There are 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.  

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

Negotiation 

When running a business, every penny counts. That's why 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 steps to get the best deal possible: 

  • For cloud-hosted systems, there often isn't a lot of negotiation that can be done. Most cloud-services have set prices that vary based on the features you need and how many users you have. However, there are a few questions you can ask 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 lengthy period of time. You should see if there are any discounts for signing long-term contracts or for paying for a year in advance, instead of in monthly installments. Another potential option for getting a lower price is to consider starting with a new service near the end of a quarter. Some representatives we spoke to indicated there was more wiggle room when it came to discounts around the end of March, June, September and December.

  • For a hosted system, there is often more room for negotiation. These are systems that are built for you, so there is more opportunity to ask for certain features to be included for free. Depending on how much you are spending, a vendor may add some features for free to ensure they land your business. In addition, you should always try to ask for the cost of installation to be lowered. Finally, ask if the vendor is willing to lower their user-licensing fees if you commit to expanding your service in the future.

  • Another area you can negotiate on for both types of systems is with phones. Many providers have a lot of options and are willing to give you upgraded phones depending on the service you choose and the length of time you commit to. In addition, providers often run specials that include phones for free. Be sure to see what kind of phones they are offering and whether they would be willing to upgrade them if you commit to their 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, considering other options could help you get a lower price when you do commit. If the system you like best isn't the cheapest, ask whether the vendor would be willing to match the lower price. If you tell them that another system you really like is giving you a better deal, a vendor may be willing to lower their prices to get you as a customer. 

When you commit to a business phone system provider, they 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 on your monthly service (as well as the 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 to do is open up your first month's bill only to realize it is significantly more expensive than you anticipated. That not only negatively impacts your budget, you start off on the wrong foot with your vendor. 

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

Reviews

Types of Phone Systems

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

With on-premises systems, your IT staff needs to install and maintain private branch exchange (PBX) equipment. 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, IT teams focus more of their attention on managing the system's features, rather than the infrastructure. 

Here is a breakdown of each type of phone system. 

Traditional Landline  

Until recently, all businesses used traditional analog landline telephone systems. These systems were connected to the Public Switched Telephone Network (PSTN) and ran on the telephone company's copper wiring. 

While these multiline phone systems were extremely reliable, they required costly equipment that was expensive to install and maintain. Besides the copper wiring that had to be run through the business, landline systems also required a costly private branch exchange (PBX). The PBX is what is used to switch calls between the business and the telephone network. It's also what was needed to offer various calling features, such as voicemail, conference calling and automated attendants. 

All of this PBX equipment and the other hardware needed to run the phone system are housed onsite in your businesses, typically in a server room or closet. 

Today, analog, multiline landline systems are becoming obsolete. Telephone companies aren't developing new analog systems and are no longer providing updates to the systems they used to offer. Finding IT professionals with the skills to keep these systems up and running is also becoming increasingly difficult. Telephone companies have largely shifted their attention to VoIP technology. 

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

Very few new businesses are choosing landline phone service for their phone system needs. Knowing that support for these systems is diminishing, the organizations they are best served for are those with an in-house IT team that is skilled with these systems and can handle the maintenance and upgrades on their own. 

In addition, landline systems are the only option for businesses in communities where there isn't any high-speed internet access. 

VoIP 

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 making a call, the user's voice is instantly converted into a data packet that is moved throughout the internet like other pieces of data, such as emails and images. Tapping into an existing data connection saves you the trouble and expense of installing and maintaining phone lines throughout your offices or stores. 

In addition, VoIP systems work in conjunction with cheaper and less bulky PBX equipment. This allows small businesses to access calling features they previously couldn't afford, like an auto attendant, conference calling and call recording.

VoIP systems easily integrate with computers, which lets employees make calls from their machines and have voicemails sent directly to their email, among other things. It can also be beneficial for businesses using customer relationship management (CRM) programs. 

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. 

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

In addition, VoIP providers make it easy to add new users. Administrators can quickly log into the system to add new lines on their own within the system's online portal. This simplifies the process of setting up new employees with their own line. 

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

VoIP is becoming a standard option for all businesses. Soon, nearly all U.S. phone users will use VoIP. Research shows that VoIP use among businesses has grown by more six times since 2010. Data from Statista revealed that there were 6.2 million VoIP business subscribers in 2010. In 2018, that number grew to more than 41 million. 

Cost is a huge benefit of VoIP. Research has shown that moving to a VoIP system from a traditional landline system can save businesses up to 75 percent on their phone service costs. 

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. 

A huge factor when choosing a phone system for your business is deciding how you want the PBX equipment, which is what's needed to run the system, hosted. Some phone system providers offer on-premises or cloud-based systems, while others offer both options. 

VoIP On-Premises 

With on-premises systems, 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 on-premises gives businesses the ability to keep a few traditional landlines working alongside SIP-trunked VoIP lines. 

Similar to landline systems, on-premises VoIP systems have all the equipment installed and housed on-site inside each business. The hardware is typically stored in your company's server closet. 

With this option, you are in total control of your system. You aren't relying on anyone else to make sure it is running, and you can configure it to your exact specifications. However, since it is located onsite, your IT staff handles all repairs and upgrades. On-premises systems need to be professionally installed. 

If you have a VoIP on-premises system, you will also need SIP trunking or PRI circuits to connect a dial tone to the system. 

Another difference is security. On-premises systems don't have the same security concerns as cloud-hosted solutions, since all the data is stored within your business. 

Experts say businesses concerned with privacy are best served by on-premises systems. This option allows businesses to configure their firewalls exactly as desired to protect the phone system from any type of intrusion. 

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. 

Cloud-Hosted VoIP 

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

Most cloud systems are essentially plug-and-play ready. Once you activate your service and receive your phones, they can be plugged into any Ethernet port, and calls are ready to be made and received. 

The downside to cloud-based solutions is that businesses are at the mercy of the phone system provider to keep their service up and running. To ensure this happens, most of the top vendors have several redundancies built into their systems. This includes having multiple data centers so that if one goes down, the data can be transferred seamlessly to another to ensure the continuation of service. 

One important factor to consider if choosing a cloud-hosted system is bandwidth. Consult your business's internet service about obtaining the bandwidth required to support a new phone service. The phones of most of the cloud-providers we considered required just short of 100Kbps per phone call for the best quality. You'll also want to estimate internet needs for other equipment, such as computers, servers and Wi-Fi-connected devices. 

Cloud-based VoIP systems are ideal for small businesses because they have few upfront costs and consistent monthly charges that can fit easily into a budget, plus they don't require trained IT experts to keep them running. 

Businesses using these systems are best served by installing backup equipment that can reroute calls during power or internet outages. With these systems, new users and features can be added via an online portal. Cloud-based options also easily support multiple locations. 

Nearly all of the providers we examined had an uptime of at least 99.990 percent. That means their systems are down for just a handful of minutes each year. 

Virtual Phone System 

One type of phone system growing in popularity, especially for solo entrepreneurs and businesses with a large remote workforce, is a 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 inside your business. Instead, they are calling a virtual phone number that routes calls to you (or your employees) wherever you are located. 

Virtual phone systems are essentially extensive call-forwarding systems. Businesses have a main number, with each employee receiving their own extension. However, instead of transferring customers to an employee's office phone, the virtual system transfers calls to mobile and home phones. Employees control the numbers they want their calls sent to and the order in which those numbers are rung. 

In addition to automated attendants, virtual systems offer other valuable features, including voicemail, voicemail to email, music on hold, call forwarding and online faxing. 

Hosted/virtual systems are ideal for businesses that don't have a need for a full-fledged phone system. This could include solopreneurs that work out of their home and don't want to give out their mobile or home numbers to clients, as well as small businesses with a large remote workforce. This type of service allows them to present a professional image at a fraction of the cost of more complete phone systems. 

Desktop Phones 

Once you decide the type of phone system you want, you then need to choose a phone. The only type of system this doesn't apply to are virtual systems. 

Most business phone services are compatible with a variety of IP phones and offer adapters so analog phones can connect to their systems. It's likely that you can continue using the phones your company already owns. 

IP phones come in a variety of styles. There are traditional corded options as well as cordless phones and conference room phones. The phones can range anywhere from $50 to $1,000 each. In addition to buying the phones outright, some providers let you rent phones for a monthly fee. 

The per-phone analog adaptor can cost as much as $60, and a traditional fax-machine adaptor can cost $100 to $150. 

The benefit of buying IP phones from your phone system provider is that they come completely configured and are immediately ready to be used once they are plugged in. If you buy phones from an outside source, your IT team will need to configure the phones on their own to work with the system you are using. 

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

Phone System Features

Today's business phone systems are filled with valuable features and tools. The number each VoIP provider offers varies. Some offer a couple dozen features; others offer more than a hundred. 

Calling Features 

Among some of the available calling features business phone systems offer are:  

  • Voicemail: Each user has access to their own individual voicemail. Most systems allow users to check their voicemail from anywhere. 
  • Voicemail-to-email: With this feature, users are sent an email with their message as an audio attachment. 
  • Caller ID: Instantly know the number of the person calling you. 
  • Speed dial: This lets you quickly dial the phone numbers of those you call most often. Instead of dialing the entire number, speed dial lets you push a couple of buttons to dial out. 
  • Personal directories: Personal directories are a way for you to easily manage your contacts. It gives you access to your contact's 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 ensure you aren't interrupted. Your phone will not ring, and all callers are sent directly to voicemail. 
  • Auto attendant: Auto attendants automatically answer calls to your business. The automated attendant answers the call, plays a greeting and directs the caller to the person or department they are trying to reach. 
  • On-hold musicChoose the music callers hear while they wait on hold. 
  • PagingUse your phone to send a message to everyone. This is similar to a traditional intercom system. 
  • Presence: This shows employees whether their peers are on a call or available for a chat. 
  • Call reports: This provides organizations with analytics on their company's phone usage. It provides statistics and usage can often be broken down by user, department, etc. 
  • Online management: All VoIP systems can be managed via an online portal. From the portal, administrators can add users, set phone numbers, review call reports, create ring groups and see monthly statements. Users can also access the portal to check their voicemail, see a company directory and set call-forwarding routes. 
  • Call forwarding: Have your office phone forward calls to another number. 
  • Call recording: Most systems give users the ability to record their calls when necessary. 
  • Call queues: This tool is typically used in call center settings. It allows callers to be put in line so their call can be answered when operators become available. 
  • Extension dialing: Employees can use this to dial co-workers by their extension, instead of dialing their entire phone number. 
  • Ring groups: Businesses can create ring groups for employees who answer calls from the same set of customers. For example, the customer service team might have their own ring group. When a customer calls in and asks to speak to a customer service representative, the entire group is notified. 
  • Directory assistance: This allows callers to access a company directory to reach the employee they are looking for. 
  • Call transferring: Employees can quickly transfer calls to their peers. 
  • Speakerphone: Many IP phones include a speakerphone offering that allows users to speak without having to use the phone's handset. 

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, unified communications systems include conference calling, video and web conferencing, online faxing, text messaging and instant messaging. 

Here are some specifics on the added features unified communications systems provide businesses: 

  • Conference calling: Most phone systems include a conference bridge that allows each user to host their own conference call with anywhere from a handful to several dozen participants. If the system you choose doesn't have a conference bridge that supports as many callers as you need, you may need a separate conference call service
  • Video conferencing: Video conferencing allows users to host online meetings from their computers or from rooms with video conferencing equipment. These conferences allow you to share your screen, so those in the meeting can see documents you are referring to. 
  • Instant messaging: Many systems give employees the opportunity to instant message with each other. This provides an easy way for employees to communicate with one another without leaving their desk. 
  • Texting: Some systems include SMS messaging. This allows users to send text messages from their business phone number. 
  • Internet faxing: Instead of hooking up a traditional fax machine, this feature allows you to send faxes from your computer. 

Mobile apps 

Mobility is another important aspect that today's business phone systems and unified communications systems allow for. Most offer a mobile app for iOS and Android devices that let employees tap into their business line wherever they are.

The biggest benefit of the mobile app is that it allows users to make and receive calls from their business line. This gives you the freedom to leave the office, even if you are expecting an important call. In addition, should you need to make a call when outside of the office, you can do so from your business phone number by using the app. This allows you to keep your mobile number private, without needing multiple cell phones.

The mobile apps also let users review call history, check and manage their voicemail, instant message with colleagues, start one-on-one video calls and view online faxes.

Frequently Asked Questions

Q: How much does a business landline cost? 

A: The cost of just one business landline can run anywhere from $50 to $100 per line. However, businesses typically require more than just one line, and they want PBX equipment as well as the added features that business phone systems include. 

In all, businesses can expect to pay between several hundred to several thousand dollars for a landline business phone system. However, most landlines are becoming obsolete. Phone system providers are investing resources into the continued development of VoIP phone systems. This, in turn, has resulted in no new technology surrounding landline phone systems and a declining number of technicians who can maintain and service these systems. 

Q: What is a unified communications system? 

A: Rather than a simple phone system, many providers are offering complete unified communications systems that give businesses all the communication tools they want to use in one platform. 

In addition to phone service, unified communications systems include conference calling, video and web conferencing, online faxing, instant messaging and text messaging. 

Having these tools in one platform can not only give a boost to employee productivity, but it can save businesses hundreds, if not thousands of dollars a month. 

For your workers, being able to access video conferencing or online faxes from the same platform makes things easier on employees. Instead of having to toggle back and forth between different services to access each tool, employees log into their unified communications portal and tap into them from the same place. 

Q: What is a four-line phone system? 

A: A four-line phone system is designed for very small businesses. Instead of having just one phone line, a four-line system provides phone service for up to four users at one time. 

Four-line systems are typically not as robust as cloud-hosted VoIP systems, as they don't include the wide range of features those business phone systems do.

What to Expect in 2020

In 2020, you can expect business phone systems to continue the shift to more of a unified communications system. Businesses are no longer looking for a system that only lets them make and receive calls. They want a service that also allows employees to host video calls and webinars, instant message with each other and send faxes when necessary. 

As more businesses look to adopt unified communications systems, look for phone system providers to continue adding new features to surpass their competition. Examples include a new team messaging tool unveiled recently by 8x8 and a social messaging tool released by Vonage. 

Besides additional unified communications offerings, artificial intelligence (AI) voice analytics are another area where providers may expand in 2020. New voice analytic tools will allow businesses to have their calls automatically transcribed and analyzed for certain trends. This could be a valuable tool for businesses looking to further understand the types of calls their customer service or sales teams are fielding. 

RingCentral is one company investing in AI voice analytics. The company recently partnered with several companies in order to allow for, among other things, real-time call transcriptions, machine learning capabilities and the secure storage of audio recordings for highly regulated industries.

Methodology

To determine the best business phone systems, we started with a list of more than 70 phone system providers. Next, we separated all the vendors that had a good online reputation, such as those services that were consistently ranked highly by other websites. 

We also, at periodic intervals, queried business owners to see which services they use. If multiple business owners raved about a particular vendor, the service was added to the final list of contenders. 

We then visited each company's website. If a company stood out to us, we added them to the list of contenders. We also eliminated most companies that only served businesses in their local region. 

We ultimately narrowed down our pool to 8x8, Avaya, Booth, Cisco, Dialpad, Digium, ESI, EVoice, FreedomVoice, Grasshopper, Jive, Mitel, Nextiva, OnSip, Ooma Office, Phone.com, RingByName, RingCentral and Vonage. 

We researched each provider by investigating its services, watching tutorials and how-to videos, and reading user comments. We contacted each company's customer service department posing as business owners to gauge the support each provider offers its users. In all, we analyzed each system based on the following factors: 

  • Deployment options  
  • Level of service
  • Reliability
  • Customer service
  • Calling features
  • Collaboration tools
  • Mobility options
  • Cost
  • Better Business Bureau accreditation, ratings and complaints

Common Business Phone System Questions & Answers

Have a business phone system question of your own?
Ask an Expert

What's the best VoIP solution out there, for business?

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Farzad, There's a number of great solutions out there. As with all things, the answer is as complex as your needs are. The company I work with has a fantastic VoIP platform that is very cost-effective and delivers great value... for the right customer segment. Every technology provider has certain markets and/or verticals that they service better than others. It's important that the company you work with do a full needs-assessment. Sadly, many companies will represent themselves...

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Hi Paul, your question raises more questions. The answer is really not about one provider over another, it is about why your call quality is not up to par and not stable. VoIP is only as good as the connection the calls flow over. You can have a the Ferrari of VoIP providers but if they are driving on a pot-hole filled road, your ride will stink. I would suggest that attention needs to be paid to your connection to the provider as well as your internal networking. VoIP is very sensitive...

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