The Best Business Phone Systems of 2020

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

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

With on-premises systems, your IT staff needs to install and maintain 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. 

Read a breakdown of each type of phone system.

Traditional Landline  

Previously, businesses used traditional analog landline telephone systems. These systems were connected to the Public Switched Telephone Network and ran on the telephone company's copper wiring. 

While these multiline phone systems were extremely reliable, they required equipment that was expensive to install and maintain. Besides the copper wiring that had to be run through the business, landline systems also required costly PBX equipment. The PBX is what is used to switch calls between the business and the telephone network. It's also what is 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 phone 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 running is becoming increasingly difficult. Telephone companies have largely shifted their attention to VoIP technology. 

Some landline systems now use a mix of landline and VoIP technology. There might a traditional landline connection to a business, but instead of having traditional wiring throughout the building, organizations use 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 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 phone 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 devices and have voicemails sent directly to their email, among other things. It can also be beneficial for businesses using 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 difference between VoIP and landline is now so insignificant that most users have no idea when they are using VoIP 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 from IBIS World projects that by next year there will be more than 3 billion VoIP users worldwide.

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% 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 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 onsite 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 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 system, the equipment is housed in the cloud by your service 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 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 the business's communications service. 

One important factor to consider if you are considering a cloud-hosted system is bandwidth. Consult your business's internet service about obtaining the bandwidth required to support a new phone service. Most of the cloud-providers we considered required just short of 100 Kbps 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 – they have few upfront costs, the consistent monthly charges 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%. That means their systems are down for just a handful of minutes each year.

Virtual Phone System 

Virtual phone systems differ from regular office phone systems in that when phone calls are made to 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 devices and home phones. Employees control the numbers they want their business calls sent to and the order in which those numbers are rung. 

In addition to automated attendants, virtual PBX 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 need a full-fledged phone system. This could include solopreneurs who 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 on the type of phone system you want, then you need to choose a phone. This doesn't apply to virtual systems, though. 

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.

Today's business phone systems are filled with valuable features and tools. The number of features 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:

• Unlimited calling: Most of today's VoIP phone systems allow for unlimited calling. This includes incoming calls as well as outgoing calls. This unlimited service is usually reserved for domestic calls and calls using local phone numbers. They are often added charges and restrictions for toll-free calling. 

• 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 music: Choose the music callers hear while they wait on hold.
  
  
• Paging: Use 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 are available to chat.
  
  
• Call reports: This feature 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.
  
  
• 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 its 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 with participants.
  
  
• 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 an app for iOS and Android mobile devices that let employees tap into their business line wherever they are. 

The biggest benefit of the mobile app is that users can 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 the call history, check and manage their voicemail, instant message with colleagues, start one-on-one video calls and view online faxes.

Why and when do you need business phone service?

Regardless of which type you choose, there is always a need for a business phone system. At the very least, a business phone system allows you to present a professional image to those you work with. Having customers or clients reach you on your personal phone lines might be practical in some instances, but it doesn't allow you to present that image most businesses are striving for. 

Even if you don't want to spend the money, or have a need for office phones, you can still use a virtual phone system to project professional appearance. This allows you to have calls directed to your mobile phones while still having access to key features like automated attendants and voicemail transcription. 

As your business grows, so, too, will your communication needs. Having a robust unified communication system will provide you with everything you need. Not only will your employees have their own business lines, which they can access from anywhere with a mobile app, they can take advantage of other communication tools, like video conferencing. 

In all, your business, regardless of its size and whether you operate out of an office or brick-and-mortar store or your own home, would be best advised to invest in some type of business phone system. 

How long does a business phone system last?

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

On-premises systems, however, are different. Since the equipment for these systems is housed on your own servers, there is a shorter life span. If you provide regular maintenance to this equipment, you can expect it to last anywhere from five to eight years, according to Total Communication Services. 

How do business phone systems work?

The exact way business phone systems work is based on the type of solution you choose (landline, cloud-hosted, virtual), but the general principal is the same for each. Business phone systems provide you with ways for your customers and clients to reach you by telephone, and vice versa. 

Each user of a business phone system has either a dedicated phone number or extension that can be called when someone is trying to reach them. When someone calls that number, their office phone, or any other phone they are having their calls forwarded to, will ring. 

Business phone systems utilize PBX equipment that provide many features and tools that add to the functionality of the phone system. This includes being able to have automated attendant answer calls to your business and then route those calls to the specific person trying to be reached. It also allows for things like voicemail, caller ID, conference calling, instant messaging and call recording. 

How much does a business landline cost? 

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 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,

What is a unified communications system? 

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

Besides 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 boost employee productivity, but it can save businesses hundreds, if not thousands, of dollars a month. 

For your workers, accessing 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. 

What is a four-line phone system? 

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

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 qualities should your business phone system have?

There are a number of factors you should consider when choosing a business phone system. First and foremost, it should support all of your employees. Most systems today allow you to easily add lines and allow for hundreds, if not thousands, of users. However, if you are a very small business, some providers require a minimum number of users. So, make sure it can support your needs. 

The second factor to consider is whether it offers all the tools your employees need. Besides the traditional calling features, does it offer things like video conferencing, conference calling and text messaging? You may want to look for a solution that allows you to mix and match service plans. This gives you the flexibility of ensuring each employee has the tools they need without paying for upgraded plans for employees that don't need every feature. 

Price should be another consideration. With so many options to choose from, you should be able to find a service that fits in your budget. In addition to the per-user cost, you should get a true sense of what your monthly bill will be once the added fees and taxes have been included.

The final quality you need to consider when choosing a business phone system provider is customer support. In an ideal world, the system will always work perfectly. But that is rarely the case with any piece of technology. Make sure the provider you choose offers the support options you are looking for. That may be 24/7 phone support, live chat operators or helpful online guides.

What are the differences between phone systems for large businesses and phone systems for small businesses?

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

Before cloud-hosted PBX systems became an option, typically only larger business had the ability to use sophisticated phone systems that had tons of features and tools. That's because the on-premises PBX equipment required to power those features was so expensive to buy and maintain that only larger businesses could afford them. That left small businesses with simpler options that didn't have the bells and whistles that their larger counterparts could take advantage of. 

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

When it comes to phone service, the cloud has given small businesses the chance to use phone systems that they never would have been able to before. This allows them to access features like auto attendants, on-hold music, call recording, voicemail-to-email and video conferencing that previously only large businesses were using. Cloud-hosted VoIP phone systems give every business the means to present a professional image, regardless of how large or small they are.

What do you need to set up a VoIP phone system?

VoIP business phone systems run off the same internet connection you use to get online, so the first thing you need is a strong internet connection. In order for the system to run smoothly, you need to have the bandwidth to support your calling volume and the rest of your online needs. You also need to set your router to prioritize voice calls over other online use.

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

If you are operating an on-premises VoIP phone system, you will need all of the PBX equipment installed inside your business. This type of equipment typically needs professional installation.

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

What is the difference between VoIP and PBX?

VoIP is the type of connection used to run the phone system. With a VoIP system, calls are made and received 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, which means you don't need to install PBX equipment within your business location. On-premises VoIP systems and traditional landline systems use PBX equipment that is installed and stored inside your business, most often in the server room.

We spoke to unified communication and business phone system users to find out which systems they found most valuable and what they liked about them. 

Ian Kelly, vice president of operations for NuLeaf Naturals, said they had been a longtime user of Ooma, and were pleased with the service, but eventually switched when their needs became more advanced. It was then that they decided a switch to 8x8 would be in their best interest. 

"Ooma was very simple and a great option for us until we decided to upgrade our needs," Kelly told business.com. "The main reason for the switch was the video conferencing feature which was lacking in Ooma." 

Pricing also came into play. Kelly said as a small business, affordability is a critical factor. 

"8x8 had an express plan, which was cheaper than what we were paying for [with] Ooma," Kelly said. "That was the deal-breaker." 

Similarly to Kelly, Will Ward, CEO of Assistive Listening HQ, said as his company grew, so did his communication needs. Originally, they had been using Grasshopper. He said they liked it because was the most hassle-free installation, no equipment was needed, and it was available in a monthly subscription. 

However, Ward said they came to conclusion that they needed to have dedicated equipment inside their office.

When using their mobile phones, people got distracted," Ward said of the virtual service Grasshopper provided. "So, we switched to Ooma, and it was a great decision. The installation was very simple, and they even gave unlimited calling." 

Tyler Roark, president of Kentucky Printing Richmond, said his company was operating from two locations. One was using a simple home wireless phone, while the other was using a 30-year-old system that had very limited functionality. It had no answering system, caller ID or voicemail. It really only allowed employees to put callers on hold and transfer to other phones within the building. 

When that system died, Roark ran the numbers and determined the capital outlay required to replace the system wasn't worth the investment. 

"We ended up settling on a Voice over IP system by Intermedia with Yealink T465 phones," Roark said. "It was going to cause our monthly expenses to go up a little but had very little expense in terms of initial setup." 

After getting the system up and running, Roark said they uncovered a number of advantages they hadn't foreseen. One big advantage was that his company could use one employee to answer and route calls for both locations. 

"This has allowed us to free up time from having to deal with as many spam calls and gives us a more consistent presentation," Roark said. 

Another benefit is that the system can connect with each employee's mobile phone. 

"So we aren't necessarily tethered to our desks anymore," Roark said. While cost is always a major consideration, Roark said there is another key factor businesses should consider when looking at a new unified communications system. 

"Next to [cost], and perhaps more important than that, you really have to consider how the system will impact the overall systems within your business," he said.

To determine the best business phone systems, we started with more than 70 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, Cisco, Dialpad, Digium, FreedomVoice, GoToConnect, Grasshopper, Mitel, Nextiva, OnSip, Ooma Office, Phone.com, 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 posing as business owners to gauge the support it 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