Business Phone Systems: A U.S. News Guide

You'll never miss an important call when you pick a reliable, user-friendly business phone system. Most modern systems are based in the cloud, so your upfront costs are lower than traditional on-site systems. Plus, a top-ranking phone service works nearly 100% of the time.

Our guide to business phone systems focuses mostly on cloud-based companies that use Voice over Internet Protocol (VoIP) technology. A few companies can merge their VoIP systems with your legacy system if you want to use your current desktop phones. Read on to learn how to buy the right business phone system for your company and to see our ratings of the Best Business Phone Systems.

Best Business Phone Systems of 2021

Below is a list of the top eight business phone systems. Follow the links in the companies' names to read our full reviews. See more information about our unbiased rating of the Best Business Phone Systems here, which includes separate ratings for small, midsize, and large businesses.

#1 Nextiva
#2 RingCentral
#2 Dialpad
#2 Grasshopper
#2 GoToConnect
#6 8x8
#6 Vonage
#8 Ooma Office

Best Small Business Phone Systems of 2021

We've listed the top five phone services for small businesses below. Read our full reviews by clicking on the links in the companies' names and see more information about our unbiased rating of the Best Small Business Phone Systems of 2021 here.

#1 Dialpad
#1 Grasshopper
#3 8x8
#3 Vonage
#5 Ooma Office

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What Are VoIP and Business Phone Systems?

VoIP is short for Voice over Internet Protocol. A phone system that's VoIP-based uses an internet connection to provide the phone service instead of routing calls through traditional phone lines. It can connect to the internet using an Ethernet cable, Wi-Fi, or your phone's cellular connection.

VoIP isn't the only business phone technology, and it helps to have a glossary when evaluating your options for business phone systems and services. Here are some commonly used terms and what they mean.

Types of Business Phone Systems:

A private branch exchange (PBX) is a piece of telephone equipment that acts like a switchboard and is dedicated for use by a single company. Traditionally, the equipment was based on a company’s premises. A PBX solution also may be hosted externally in a data center and use internet protocol (IP) to send and receive calls.

IP PBX and IP-enabled PBX are premises-based phone systems that use IP for networking or signaling and support IP phones. A system might be located on the customer’s premises or hosted externally in a data center. If so, it is dedicated solely for use by that customer. Typically, these systems are managed and owned by the end user.

A cloud-hosted IP PBX solution is one in which the infrastructure is located or co-located in the provider’s data center and is managed by the provider. The telephone solution, however, is dedicated for use by a single organization.

A Cloud VoIP or cloud-based telephone service is a multitenant solution and not dedicated for use by a single organization. It is owned, maintained, and hosted by a provider. The infrastructure is shared and is typically paid for as part of a subscription license plan.

With both cloud-hosted and cloud VoIP solutions, call processing occurs in the data center, so calls are still answered even if a company loses power from a man-made or natural disaster.

“Many companies have replaced their traditional PBX systems with IP-enabled PBX, IP-PBX, or cloud telephony solutions,” says Megan Fernandez, a senior principal analyst at technology research and advisory firm Gartner. “Phone system manufacturers have transitioned their portfolios to IP telephony and cloud telephony solutions.”

What Is Unified Communications as a Service?

Unified communications as a service, or UCaaS, can integrate phone, messaging, video and web conferencing, business applications like customer relationship management (CRM) programs, and contact center capabilities into a single platform. The specific features vary from one service to the next.

“This is digital transformation,” says Sam Sansome, who co-founded telecommunications broker USA Voice & Data and has nearly 30 years of experience in the industry.

There are several advantages that UCaaS services provide over a basic business phone service. UCaaS helps employees collaborate with peers and work more efficiently, as they no longer have to switch between applications or re-enter data. UCaaS can provide a faster, more seamless, more personalized customer experience. And because data generated by UCaaS tools are stored in the cloud, a company stays in control of its livelihood; no more salespeople will leave with customer contact information locked in their personal cellphones. It also ensures business continuity should an organization’s building catch fire, flood, or be struck by lightning and lose power.

With technology like artificial intelligence and machine learning, providers of UCaaS services help automate workflow and track consumer sentiment. UCaaS also enables a flexible, mobile workforce with apps for smartphones and laptops.

Business Phone Systems Coupons

Business Phone Services vs. Business Phone Systems

The terms “business phone services” and “business phone systems” are often used interchangeably. Depending on the company that's describing its plans, there may be a difference, but companies commonly use either phrase.

A business phone service implies a customer is acquiring telephony as a service, such as by paying a monthly or annual subscription. It doesn't require the customer to install hardware (for example, a closet full of phone servers, circuits, and cabling) to operate the phones or to perform repairs, system backups, or software updates. Instead, all this happens in a data center and is the responsibility of the phone service provider.

A business phone system implies a physical system that is housed onsite at a company. An example is a private branch exchange (PBX) system, which is dedicated for use by a single organization. That organization also is responsible for maintaining the system. It may have in-house IT staff to do this or hire professionals.

How to Buy the Right Business Phone System

Gone are the days when a business phone system or service was all about the phone. Today, inbound and outbound calling, and the ways to manage these calls, are just some of the many features available to customers. It’s important to know what’s available to you and to prioritize your must-haves, says Jon Geggatt, a retired IT professional who mentors business owners through SCORE, a resource partner of the Small Business Administration.

Cloud VoIP business phone services generally offer unlimited local and long-distance calling, as well as many of the call-management functions available through on-premises PBX systems. Not all include a new phone number, which can increase your costs considerably. Check first to see if a local or toll-free phone number is included in the price.

Call features can include:

Auto attendants, also called virtual receptionists, route calls to departments and let customers dial by name. Ring groups send incoming calls to multiple employees at once, so calls are picked up quickly. Presence features let employees see if coworkers are available, busy, or offline. Some features screen robocalls. And with call flip, employees can seamlessly switch between desktop and mobile devices during a live call. When using a service’s mobile app to call clients, the caller ID shows the business phone number, not an employee’s personal number.

Increasingly, providers are bundling phone services with unified communications as a service, which gives customers access to collaboration and productivity tools. We go into more detail about this technology in our What Is Unified Communications as a Service? section above.

With UCaaS, employees can reach out by:

Unified inboxes and omnichannel routing bring voice, email, chat, text (SMS), and social media channels into one place. Audio, video, and web conferencing make it easier to share ideas with customers or collaborate with remote co-workers.

Many services integrate with popular business applications, such as CRM, project management, security, and customer support programs. Some providers offer access to open application programming interfaces (APIs), which let software developers customize applications for their companies.

Contact center capabilities are built into some service plans and allow for:

Pop-up screens share pertinent contact information when customers call in. Some providers use artificial intelligence to track customer sentiment across interactions with the company. Other possible ways to connect with customers include using survey tools and chatting live with visitors on your website.

Reporting and analytics vary by business phone service provider. Most provide basic call logs, but others offer a more in-depth analysis of users, customers, and the company’s account. Real-time call analytics let managers see how customer conversations unfold and how specific keywords trend over time. Custom reports and dashboards provide high-level insights.

Access to live telephone customer support may be available 24/7 or on a more limited basis, depending on the business phone service. Live chat and email also may provide support. Customers can search online support centers for specific help topics, videos, articles, and user guides.

Most business phone services are scalable to meet the needs of a growing business. Administrators simply add users and phone numbers through an online portal, which they also can use to configure settings, manage billing, and access system reports.

“I can’t think of an organization that wouldn’t benefit from a hosted or cloud-based system,” says Phillip Sherman, president of Telecom Advisors Group, which helps companies find phone solutions to fit their business needs.

How Do I Set Up a Business Phone System?

The process for getting started with a new business phone system depends on whether you have an on-premise or a cloud-based service. It also depends on the size of the deployment, another term for setting up a new phone system.

For many small companies, installation is a do-it-yourself endeavor for cloud VoIP phone service. You sign up for an account, choose or transfer phone numbers, and configure features like voicemail and call routing. After downloading mobile and desktop apps, employees can make business phone calls and use collaboration and other tools. IP desktop phones may be plug-and-play or require configuration.

For larger organizations, implementing cloud and cloud-hosted phone services is more complex due to the number of employees, devices, office locations, and phone numbers that must be transferred or ported. Deployment may be phased in, and providers and channel partners (third parties that sell business phone systems) may provide hands-on support, sometimes for an additional fee. Sherman advises companies to avoid providers that subcontract installation, training, and support.

Cloud telephony services are the fastest to deploy. On-premises business phone systems take longer because system hardware and software must be set up and configured on-site.

Learn More

Get tips on comparing business phone systems and find the best phone service for you with our ratings and guides:

Other Business Guides from 360 Reviews

We're here to help your business be as efficient and profitable as possible. Check out some of our other guides, each of which includes buying tips and our ratings of the best services:

Our 360 Methodology for Evaluating Business Phone Services

We explain what matters most when it comes to buying a business phone system by sourcing experts and professional reviewers. We also provide an unbiased evaluation of business phone systems. Our goal is to empower businesses with the information and tools they need to make informed decisions. More information about our methodology for evaluating business phone services is available here.