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The Best Phone Systems for Small Business

Jeff Hale
Business News Daily Contributing Writer
| Updated
Jul 26, 2022

Learn about the features and tools of the industry's most popular business phone systems for your company's needs.
Best for Multisite Retail and Healthcare
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Free professional implementation
24/7 customer support for any plan
Professionally recorded greetings
Best for Collaboration
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Advanced biometric hardware
Flexible plans and features
Industry-leading integrations
Best for Video Conferencing
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Free video conferencing
Full set on all plans
Pay-as-you-go contracts
Best Business Phone System for Small Businesses
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More than 35 calling features
Flat and transparent pricing
24/7 customer support
Best for Voice Intelligence
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Automated post-call summaries
Mobile, desktop and browser access
Available 100% uptime guarantee
Learn about the features and tools of the industry's most popular business phone systems for your company's needs.

What is a business phone system?

A business phone system is a multiline phone system that often includes such features as unlimited calling, automated menus, ring groups to call multiple employees simultaneously, voicemail-to-email functionality and call recording. Types of business phone systems include Voice over Internet Protocol (VoIP), private branch exchange (PBX) and key system unit (KSU). The best phone systems for small business use VoIP technology, which allows you to use your business internet connection for the whole system.

The Best Business Phone Systems

  • Small businesses that need phone, video, chat, SMS and fax are turning to cloud-based business phone system providers that offer all-in-one unified communications via the internet.
  • Most cloud-based service providers offer great call quality and reliability with uptimes of 99.999% and higher.
  • Business owners should look for communications platforms that integrate with the other productivity tools and CRM software they currently use.
  • This article is for business owners shopping for a new business phone system for unified communications.

VoIP, or cloud-based, phone systems have largely replaced traditional landlines in business settings. Today's modern phone service providers offer unified communications across phone, video, chat, text and fax with key software integrations that help companies make better use of every conversation that takes place. While some systems offer SIP trunking to integrate with older on-premises telephone hardware, most service providers work exclusively through the cloud with no hardware required to facilitate calls. Calls can still be taken on a traditional-looking IP desk phone, but most users opt for a headset with a desktop application or simply their mobile device. Today's best business phone systems offer a wealth of call management tools, with virtual receptionists, advanced call routing, custom business hours and many other helpful features to ensure that calls are never sent to a voicemail box when someone's available to answer.

Find the Right Business Phone System for Your Business

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Compare Our Best Picks

Company Editor's score Best use case Monthly price Free trial Cloud or on-premises Customer support BYOD (bring your own device)? Contract term
Dialpad 96 Voice intelligence $15 to $25+ 14 days Cloud 24/7 with some plans Yes Monthly
Nextiva 96 Multisite retail and healthcare $17.95 to $31.95 7 days Cloud 24/7 Yes Annual and Monthly
8x8 95 Basic phone service $15 to $44 30 days Cloud 24/7 Yes Annual and Monthly
RingCentral 95 Collaboration $19.99 to $49.99 7 days Cloud 24/7 Yes Annual and Monthly
Ooma 94 Small businesses $19.95 to $24.95 30 days Cloud 24/7 Yes Monthly
GoTo Connect 89 Remote teams $26 to $49 14 days Cloud 24/7 Yes Annual and Monthly
Zoom 88 Video conferencing $10 to $20 No Cloud 24/7 Yes Annual and quarterly
Vonage 86 APIs and customization $19.99 to $39.99 No Cloud 24/7 Yes Monthly
Net2phone 83 Scaling businesses $19.99 to $31.99 30 days Cloud and SIP trunking 24/7 Yes (on most plans) Monthly
Kinetic Business by Windstream 82 Midsize businesses $19.95+ No Cloud and SIP trunking 24/7 No Annual
Grasshopper 80 Virtual phone system $26 to $80 7 days Cloud 24/7 No Annual and Monthly


Nextiva: Best Business Phone System for Multisite Retail and Healthcare

Nextiva offers professionally recorded greetings to provide businesses with a polished presence for inbound calls.
Nextiva includes 24/7 technical support via phone, email and chat with all subscription plans.
The visual voicemail feature is available only as part of the Enterprise plan, which is the most expensive.
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Nextiva's cloud-based business phone system is an ideal tool for multisite retail and healthcare businesses because of its robust privacy and security settings as well as its built-in CRM software. If your business deals with sensitive customer or patient data on a daily basis, Nextiva's call encryption, 24/7 network monitoring and compliance with SOC 2, ISO/IEC 27001, PCI and HIPAA compliance are an ideal match. The platform's NextOS admin portal is among the easiest to use and navigate among competitors we've reviewed, including Ooma and 8x8. According to Nextiva, multisite retail and healthcare businesses represent a significant chunk of the platform's total subscriber base.

Editor's score: 96/100

Another standout feature for sales and healthcare businesses is Call Pop, which automatically displays useful caller information for all inbound and outbound calls. Available with all of Nextiva's business phone plans, Call Pop provides agents with details on the caller's past interactions, total account value, survey responses and sentiment that can be used to provide valuable context and help ensure a better customer experience.

Part of the reason Nextiva is so easy to use is its ability to make complex auto attendants and call flows easier to build and edit through data and process visualizations. For call flows, the entire process is mapped out, making it easy to understand the complete system at a glance. In most cases, setting up new systems or adding new users is always accompanied by helpful pop-up instructions and prefilled drop-down menus that include all of the relevant information needed to complete a desired action properly.

Nextiva's three business communication plans – Essential, Professional and Enterprise – range from $23.95 to $37.95 per user per month for the smallest businesses. Larger companies paying for additional user accounts can save as much as 25% on their per-user fees. Nextiva also sells and rents a wide variety of telephone hardware, including IP phones, conference phones and analog adapters, that can be used to convert older desk phones or fax machines. All plans include unlimited calling in the U.S. and Canada, auto attendant, call groups, 24/7 customer support, email integrations, mobile apps and more. Nextiva also offers contracts up to 36 months that may provide additional discounts.

Read Nextiva Review

RingCentral: Best Business Phone System for Collaboration

RingCentral offers an open API and integrations with over 2,000 business software apps and productivity tools.
You can host video meetings with up to 200 participants.
RingCentral's customer support hours are limited to weekdays with the entry-level Essentials plan.
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RingCentral MVP is a standout cloud-based business phone system for collaboration. The platform covers communication across messaging, video and phone (MVP) with crystal-clear reception, high reliability and an advertised uptime of 99.999%. RingCentral is an especially useful tool for hybrid teams and remote employees, with features that can turn any space into a virtual conference room for impromptu huddle-ups or regular meetings. Unlimited audio conferencing can support up to 1,000 attendees per call; the limit is 200 participants for video conferences.

Editor's score: 95/100

One area where RingCentral truly stands out is its industry-leading list of software integrations across categories, including analytics, automation, collaboration, CRM and productivity. Combined with an open API for custom solutions, RingCentral's extensive app gallery offers far more integrations than any other business phone system service provider we've reviewed.

RingCentral also offers one of the best video conferencing tools, with small touches like the hand-raise feature, which politely alerts the group when someone has a question or needs a moment to take a note. For team messaging, RingCentral provides a complete digital workspace where members can send direct messages, bookmark important notes, search for older data, create personal folders and share video recordings to collaborate effectively when out of the office.

With more and more workers returning to the office, RingCentral has increased the functionality of its conferencing room video services: RingCentral Rooms. There are new hardware options, including interactive touch displays and AI technology that automatically detects who in the room is talking and automatically adjusts the picture to focus on them. RingCentral Rooms also offers new whiteboard tools and ways to connect to the system via mobile devices and laptop computers.

Pricing for RingCentral MVP's four plans – Essentials, Standard, Premium and Ultimate – range from $19.99 to $49.99 per user per month with an annual subscription. The Essentials plan, which is the most popular, is limited to 20 users. Discounts are available if you purchase more than 99 user accounts. RingCentral also offers a number of add-on features, including vanity numbers, high-volume SMS and its Rooms virtual meeting license. At the time of our review, RingCentral's new Webinar product was available at no cost, a savings of $400 per month.

Read RingCentral Review

Zoom: Best Business Phone System for Video Conferencing

All plans include the full set of advanced, cloud-based call management features and support.
You can take advantage of Zoom's free video conferencing whiteboard tools.
Zoom Phone has relatively few integrations besides Salesforce, Slack, Microsoft, Google and some contact center platforms.
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Zoom changed the way the business world thought about meetings, emerging as the leader in video conferencing during the COVID-19 pandemic. However, you may not realize that Zoom also offers a robust phone system with modern communication features alongside its popular video communications tools. Instead of plans built around tiers of increasingly advanced features, all of Zoom's metered and unmetered phone plans include the same expansive collection of top-tier features and tools, including advanced call handling, integrations, 24/7 support, SMS, real-time reporting, video conferencing and call recording. If you have a complete understanding of your calling-minute requirements, a Zoom Phone plan could be a cost-effective and feature-rich solution for unified communications.

Editor's score: 88/100

Zoom Phone combines the best flexible, cloud-based phone system features with outstanding video conferencing tools. At any time during a call, you can seamlessly move the phone conversation to a video meeting without requiring any of the participants to join manually. Once you are in a video meeting, you can use additional free features, such as Zoom Whiteboard, to make brainstorming, ideation and presentations feel more collaborative and interactive. 

In terms of system management, the analytics dashboard makes it easy for you to track performance indicators, including call quality, participation and usage for video meetings. For phone analysis, Zoom adds location tracking to its usage, adoption and quality-of-service reports for all inbound and outbound calling. 

Zoom handles pricing and plans very differently than most of the business phone systems we've reviewed, offering one pay-as-you-go metered plan for $10 per user per month, one unlimited regional calling plan for $15 per user per month and one international plan with unlimited domestic calling in the country of your choice for $20 per user per month. Metered rates vary by region and type of phone, but in the United States, the cost is $0.0318 per minute for landlines and mobile phones, with all calls billed in 60-second intervals. You may want to mix and match plans to build a custom solution. Zoom Phone subscribers can also purchase add-ons, including additional toll-free numbers, phone hardware as a service, expert developer support and advanced analytics, for an additional fee.


Ooma: Best Business Phone System for Small Businesses

All Ooma business phone plans include more than 35 calling features and communications tools.
Ooma uses flat and transparent pricing without any long-term contracts.
The entry-level Office plan does not include a desktop app or video conferencing.
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The Ooma Office platform is one of the easiest-to-use business phone systems we've reviewed. The small business-focused product was specifically designed for nontechnical business owners and managers. The simple dashboard has a consumer-oriented feel that's especially suited for small businesses that don't spend much time dealing with spreadsheets and other data-driven tools. Its basic service includes more than 35 calling and communication features as well as flat pricing, 24/7 customer service and no long-term contracts. According to Ooma representatives, more than half of the company's annual revenue is generated from its small business customers.

Editor's score: 94/100

We consider Ooma to be in the top tier for ease of use, alongside only two other competitors, Nextiva and 8x8. Setting up features like the virtual receptionist with text-to-speech greetings for call routing is fast and easy, even if you've never implemented any modern call management tools. One helpful tool, Caller Info Match, can automatically fetch data from Google, Facebook, LinkedIn and many CRMs to populate a customer's profile with valuable information. If you're ordering new IP phones and conferencing hardware, everything can arrive in 24 hours, preconfigured to work right out of the box. Ooma is compatible with many major phone manufacturers, and it also offers base stations that convert older analog phones and fax machines into IP devices.

Ooma has three small business phone systems: Ooma Office for $19.95 per user per month, Office Pro for $24.95 per user per month, and Ooma Pro Plus for $29.95 per user per month. All plans include the mobile app, virtual receptionist, call park, call forwarding, ring groups, voicemail, intercom, multi-device ring and SMS. The Office Pro plan adds video conferencing, the desktop app, call recording, enhanced call blocking, voicemail transcription, Caller Info Match and higher usage limits for extension monitoring. The newest plan, Pro Plus includes hot desking, call queues and a Salesforce integration

Read Ooma Review

Dialpad: Best Business Phone System for Voice Intelligence

All of Dialpad's business communications plans include voice intelligence software to transcribe meetings.
Dialpad's unique post-call summaries act as a virtual assistant to send meeting recordings, highlights and action items to attendees.
Dialpad does not include any video conferencing tools.
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Dialpad is a modern business phone system that uses voice intelligence better than any other service provider to transcribe and analyze conversations. The hosted VoIP unified communications platform supports calls, texts and voicemail with a built-in AI that acts as a dedicated receptionist to take detailed notes and send post-call summaries. While Dialpad does not include video communications as part of its phone plan, it does offer a free and better-featured paid video platform called Meetings that syncs with the rest of Dialpad's communications tools. Dialpad works across iOS, Android, Mac, PC, web browsers and desk phones with some plans.

Editor's score: 96/100

Dialpad's ability to accurately transcribe calls in real time lends itself to exceptional call analytics. The analytics dashboard shows call volume over time and identifies calling habits with easy-to-understand charts and graphs. You have access to other visual data through heat maps for call volume patterns and answer times across the company. Going beyond the raw numbers, Dialpad also has the ability to perform speech coaching by identifying filler words like "um" or moments when an agent needs to slow down for the customer's sake. In terms of call handling, Dialpad includes a full assortment of management tools, such as custom routing and ring groups, which let you assign specific teams to answer calls with simultaneous or sequential ringing across all of their connected devices to ensure that important calls are never sent to voicemail.

Dialpad offers three plans for business communication: Standard, Pro and Enterprise. Prices range from $15 to $25 per user per month, with no listed pricing for the Enterprise plan, so you will have to call for a quote. All plans include unlimited calling in the U.S. and Canada, mobile apps, call recording, multilevel auto attendant, custom call routing, personal work hours and more. Advanced plans include 24/7 support, more than a dozen integrations, desk phone support, local number support in more than 50 countries and a 100% uptime service-level agreement. You can try Dialpad risk free for 14 days.

Read Dialpad Review

Vonage: Best Business Phone System for Best for APIs and Customization

Vonage offers many add-ons, APIs and integrations to let you build a custom unified communications platform.
Every plan has more than 50 standard business phone communication features.
Some of the communications features, tools, and APIs are priced on a pay-as-you-go basis, which won't be cost-effective for all businesses.
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Vonage offers a unique combination of more than 50 business phone features and 24/7 U.S.-based customer support with every plan it offers. In fact, only 8x8 and Ooma can compete with its entry-level plan for small businesses. In addition to its standard features, Vonage also offers 17 paid add-ons, with tools for faxing, on-demand call recording, call queues, personalized IT support and an AI virtual assistant for voice-enabled customer self-service. All Vonage customers enjoy 99.999% uptime, mobile apps and support in more than 40 countries, with over 96 global numbers for local inbound calls.

Editor's score: 86/100

Vonage's business calling features include call flip to transfer calls between devices, call logs with detailed records and a virtual receptionist to route calls with custom schedules and business hours. One unique feature, call screening, allows you to prompt inbound callers to record their name, play their recorded message to you and wait for you to decide to transfer it, send it to voicemail or answer it. With Vonage's available communications APIs for voice, video, SMS and verification, you can build a unique and customizable platform capable of call tracking using metadata for lead generation or engaging customers via social chat apps such as Facebook Messenger, WhatsApp and Viber. Vonage's APIs are "pay as you go," with rates typically set by the minute, message or completed action.

Vonage offers unified communications through three plans – Mobile, Premium and Advanced – that range from $19.99 to $39.99 per user per month, with discounts of as much as 30% for large businesses that request a consultation. Paid add-ons range in price from $4.99 per month for a local company number to $49.99 per month for a toll-free number or company recording capabilities; however, it doesn't publish the price for every feature. In case you prefer desk phones, Vonage offers IP phones, cordless handsets, and conference phones from popular manufacturers such as Yealink, Panasonic and Poly. 


8x8: Best Business Phone System for Basic Business Phone Service

8x8 lets you mix and match plans to build a cost-effective, custom phone solution that's perfect for your employees.
You get unlimited calling to 48 countries with some plans.
The entry-level plan does not support faxing.
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The 8x8 Business Communications platform is a VoIP phone system with excellent call management features for basic business service. The company's low-cost and robust entry-level plan offers the ideal mix of features and pricing that will perfectly suit many small businesses with fewer than 11 employees.

In terms of usability, 8x8 is one of the easiest-to-use products we've reviewed among its competitors, including Ooma and Nextiva. The dashboard was designed for non-technical business owners, making it simple to understand for someone without any experience setting up or using modern, cloud-based phone system features. Unlike most providers, 8x8 allows you to mix and match plans, ensuring that each of your employees has access to the calling features and tools they need without forcing you to overpay for those employees who don't spend much time on the phone.

Editor's score: 95/100

For many new and small businesses, adding a modern phone system with features like multilevel auto-attendants and professionally recorded greetings provide a buttoned-up look and feel. Branded video conferencing is another way to signal professionalism; 8x8 allows you to customize your virtual meeting experience with unique backgrounds, company logos and vanity URLs. Regardless of the size or age of your business, 8x8 makes it easy to project an established presence during any communication with clients, vendors or partners. All 8x8 communications plans include unlimited domestic calling, visual voicemail, comprehensive call management tools, unlimited video conferencing, meeting recording, meeting transcription and file sharing.

Pricing for 8x8's three business phone plans – Express, X2 and X4 – ranges from $15 to $44 per user per month, and the first month is free with the entry-level Express plan and optional 30-day trial. An annual subscription can save you up 25% per month one the X2 and X4 plans. Advanced calling features include unlimited calling to 48 countries and "monitor, whisper and barge," which allows you to listen to select calls and share coaching tips with the agent without alerting the caller. If needed, you can step in at any time to resolve a difficult issue or help close a big deal. Like most business phone service providers, 8x8's service is backed by a 99.999% uptime guarantee or service-level agreement.

Read 8x8 Review

GoTo Connect: Best Business Phone System for Remote Teams

The platform supports video conferencing for up to 250 participants and 25 simultaneous webcams.
GoTo Connect is compatible with over 180 desk phone models.
GoTo Connect does not publish its customer support hours for the different plans.
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GoTo Connect is a solid VoIP business phone system for remote teams. The unified communications platform was built for flexible work across phone, video and chat. GoTo Connect lets you make or receive calls from any internet-connected device via desktop, web, iOS and Android apps. The GoTo family of products for IT support, remote devices access, training, events and conference rooms is already well known by many employees, making the transition to GoTo Connect easy if you have some level of familiarity with the navigational tool's look and feel. GoTo Connect has also partnered with HubSpot, Salesforce, Zendesk, Marketo and dozens of other software companies to provide easy-to-use integrations to keep everything running in sync.

Editor's score: 89/100

If you have remote and hybrid teams working from different cities and time zones, you know that instant communication is a priority for keeping projects moving. GoTo Connect offers one-click meetings that let you skip the download, removing any potential roadblocks for jumping into an ad hoc brainstorm session with team members working from different devices. For larger groups or all-hands meetings, GoTo Connect supports video conferencing for up to 250 participants and 25 simultaneous webcams.

In terms of a modern office phone system, the platform handles call forwarding and routing, visual voicemail, and call center analytics. Setting up the phone system is relatively easy with tools like the dial plan editor, which features a drag-and-drop visual interface to visually map call flows. While customer support and self-help resources are available, GoTo Connect does not list its customer service hours or methods of communication. However, the help center does include links to find support via email and phone, and it notes that agents are available to help through the general support queue.

For businesses with between two and 10 users, pricing for GoTo Connect's three plans – Basic, Standard and Premium – ranges from $22 to $39 per user per month with an annual plan. Additional discounts are available for accounts with 11, 21, 51 and 101 users. All plans include local or toll-free number options, smart call routing, unlimited extensions, auto attendant, ring groups, call queues, and basic integrations with Outlook and Gmail. GoTo Connect is compatible with over 180 desk phones, making it much easier to adopt for remote teams with a wide assortment of existing telephone hardware. You can try GoTo Connect risk-free for 14 days.


Grasshopper: Best Virtual Phone System

All plans include the same convenient calling features and tools for small businesses.
Grasshopper's seven-day free trial includes 100 minutes, 100 texts and access to all features so that you can fully test the platform.
The platform is designed to work only on computers and mobile devices.

Grasshopper is a reliable virtual phone system designed to keep personal and business calls separate. The platform was designed for small businesses and independent contractors who are ready to move from a personal number to a business number without purchasing any additional hardware. Grasshopper offers toll-free numbers, vanity numbers, local numbers and the ability to port over a business number from another provider. All subscribers have access to 24/7 customer support via phone, email, Twitter, Facebook and chat.

Editor's score: 80/100

All Grasshopper plans offer the same basic features, including a business phone number, mobile and desktop apps, texting, call forwarding, call transfer, visual voicemail, virtual fax, extensions, and custom greetings. Grasshopper also includes detailed call reports and the ability to screen and block calls with custom business hours. Accounts are typically set up within 24 hours, with monthly and annual billing options.

Pricing for Grasshopper's three plans – Solo, Partner and Small Business – range from $26 to $80 per month. The solo plan includes one phone number and three extensions; the partner plan includes three numbers and six extensions; the small business plan includes five phone numbers and unlimited extensions. A seven-day free trial is available with no credit card or commitment, and it includes 100 minutes, 100 texts and all of the platform's calling features with local, toll-free or vanity phone numbers.


net2phone: Best Business Phone System for Scaling Businesses

All plans include unlimited domestic and international calling to more than 40 countries.
More than 40 VoIP features are accessible across web and mobile apps.
Online faxing is available only as part of the Office Power plan, which is the most expensive.

Net2phone is a cloud PBX provider designed to help empower business communications and facilitate growth. Its platform includes all basic VoIP call management features, such as welcome greetings, call recording, call forwarding, call transferring, call queues, music on hold and voicemail. Net2phone includes real-time communication analytics with performance-based data to identify and address inefficiencies. You can access this unified communications platform from the web and through mobile apps for iOS and Android devices to stay connected in and out of the office. All plans include 24/7 support over the phone and email.

Editor's score: 83/100

One unique calling setting, Find Me/Follow Me, allows you to receive inbound phone calls at different locations or on multiple devices simultaneously to ensure important clients are never sent to voicemail, regardless of where business takes you. Another tool, Presence, can show you which employees are actively on a call and who's available to help a new customer, ensuring that transfers are never sent to voicemail when someone is available. The platform's feature-rich video conferencing tool is available in over 30 languages with features for video recording, moderator controls, breakout rooms and YouTube livestreaming. You can also engage and interact during video meetings with functions to wave hello, react to something interesting and share a friendly opinion with emojis.

Net2phone offers cloud PBX office phone systems with its Office, Office Pro and Office Power plans, which range from $24.99 to $29.99 per user per month, with discounts available for larger businesses. All plans include unlimited domestic calling, unlimited international calling in more than 40 countries, mobile apps and SMS. The Office Power plan adds virtual faxing and CRM or API integration. Net2phone also offers a complete omnichannel cloud contact center and SIP trunking to help you combine your voice and data without replacing any of your existing equipment. Net2phone will discuss your specific needs and budget with you to build a customized communications solution.


Kinetic Business by Windstream: Best Business Phone System for Midsize Businesses

Kinetic Business by Windstream offers plans that support up to 20,000 users in 16 international markets.
More than 100 enterprise-grade communications features are available.
The company is vague about some of the system's features and pricing.

Kinetic Business by Windstream is a cloud-hosted VoIP phone system that offers unified communications for calling, voicemail, faxing, IM and conferencing. The platform's centralized, web-based admin tools and employee self-service features make it easy for you to make changes to call flows or personal business hours. All calls, meetings and messages are encrypted, and no data is ever stored on desk phones. All plans include 24/7 customer support and third-party integrations with Salesforce, Skype for Business, Google, Office 365, HubSpot, Accelo and more.

Editor's score: 82/100

The OfficeSuite UC platform features twinning to simultaneously ring a desk and mobile phone, helping to ensure your business stays connected to its customers anywhere on any device. You can reach customers and collaborate with team members through phone, chat and video with screen sharing. The enterprise version of OfficeSuite UC offers more than 100 communication features that minimize the complexity of remote work and can scale to 20,000 users in more than 16 international markets.

Pricing for OfficeSuite UC starts at $19.95 per user per month with a two-year contract. However, Kinetic Business reps will work with you to devise a custom communications solution with exactly the features and tools you need. If you have a smaller business with fewer than 10 desk phones, inquire about the OfficeSuite Express bundle, which includes 10 licenses, desktop phones and professional installation at a single location. Kinetic Business also offers solutions for SIP trunking as well as broadband internet, managed network security and other professional services. 


Business Phone System Costs

A business phone system typically costs between $15 and $50 per user per month, depending on the features and level of service. In many cases, advertised prices are listed with the assumption of an annual payment plan for a significant number of users. Generally speaking, the per-user price declines by as much as 25% for larger businesses purchasing many accounts and committing to an annual contract. Small businesses with fewer than 10 employees should pay special attention to advertised pricing that often preselects a plan with more than 20 users and annual payment pricing, which may not reflect what's actually available to them.

Some providers, such as Zoom, offer pay-as-you-go "metered" pricing for calling and messaging, but this arrangement is rare. For most service providers, unlimited calling to the U.S. and Canada are included, with additional per-minute fees for international calls that vary by provider and region. 

Many providers are able to lower their monthly prices by replacing standard features with piecemeal add-ons. For many businesses, this is an excellent way to reduce costs by skipping features, such as call recording, that may not be used by everyone. Other businesses use add-ons to design a customized phone system that's perfectly suited for their long-term goals. While some service providers allow businesses to mix and match plans to support different employees effectively, most providers do not offer this level of flexibility.

Finally, most business phone providers sell and rent preconfigured IP desk phones and other telephone hardware that range in price from $60 to $400. However, desk phones are never required to use a cloud-based phone system. 

Choosing a Business Phone System

There are multiple factors to consider when choosing a business phone system. First and foremost, you want to ensure that the system has all the functions and features your business needs. Can it support the number of employees who need the service? Does it have all of the features your business relies on or would benefit from?

While some businesses want only standard calling features like caller ID and voicemail, others want added functions, like ring groups, an automated attendant and on-hold music. Also consider any other communication tools your business needs. Are you strictly looking for a system that allows you to talk over the phone, or are you in the market for more of a unified communications system that adds functions like video conferencing and instant messaging? Your answer to this question will guide you in your search for a new business phone system.

Another factor to consider is a business phone system's reliability. A phone system is no use if it isn't up and running when you need it. This is especially important for a cloud-hosted solution. Ask each provider what its annual uptime percentage is. If it isn't 99.999%, find out what the company is doing to correct the issues and increase its reliability. Also ask about its service-level agreements and if the contract has any uptime-related clauses. Many business phone system providers will reimburse customers if the system doesn't meet a certain uptime percentage.

If cloud-hosted systems aren't a good fit for your business, you need a phone provider that offers on-premises systems. With an on-premises system, your business houses all the equipment onsite instead of via cloud-hosted PBX. These systems have more upfront costs, but not many of the ongoing monthly fees that cloud-based systems have.

Very small businesses may want to consider whether they need a true phone system with onsite desk phones. Businesses that can get by with mobile phones may want to look into a virtual phone system instead. These systems connect a main business number to employees' mobile phones. When someone calls the main business number, they are greeted by an automated attendant that can transfer them to a specific employee or department. The call is transferred to the appropriate employee's cell phone instead of a traditional office phone. In addition to being well suited for very small businesses, a virtual phone system is also a great fit for businesses with a large remote workforce as well as solo entrepreneurs.

Finally, consider which types of customer support the phone company offers. If you don't have a full-time IT manager for your business or employees who can handle issues, you'll want a business phone system provider that will be available to answer questions when you have them, preferably through multiple channels and online resources.

Types of Business Phone Systems

Businesses in need of a multiline phone system have several options. The choices vary based on where the equipment is housed, how the connections are made and the cost structure, among other criteria. [Get more details on four-line phone systems.]

The equipment that provides the functionality to make and receive calls is a PBX. PBX technology, whether housed onsite at a business or in the cloud, is what gives businesses all of the features and tools unified communications systems offer, such as automated attendants, call queues and ring groups.


Landline phone systems use traditional phone system connections and wiring provided by local and regional phone companies. These systems require onsite PBX equipment that your in-house IT team maintains and upgrades. These systems also require a large upfront capital expenditure for all of the PBX equipment. However, landline systems are falling by the wayside as more and more phone system providers are no longer making equipment to support this model.


Instead of using traditional copper wiring connections like landline systems do, VoIP systems rely on internet connections to facilitate calls. This allows you to run your phone system through the same internet connection your company uses to go online. [Related article: Why VoIP for Business Makes Sense] There are two types of VoIP systems: cloud and on-premises.

  • Cloud-hosted VoIP: Cloud-hosted phone systems house their PBX equipment in the cloud. This means the phone system provider is responsible for maintaining and upgrading it. To use a cloud-hosted system, all you have to do is plug your business's configured IP phones into your local area network. These systems don't typically have any upfront costs. Instead, businesses pay a monthly per-user fee. Costs usually range from $15 to $60 per user per month.
  • On-premises VoIP: These systems are similar to landline systems in that the PBX equipment is housed inside your business. You are required to handle all of the maintenance. The difference is that these systems still facilitate calls via an internet connection rather than a landline. This gives your business more control over how the phone system operates and allows you to install any security measures you want. On-premises VoIP systems require a large upfront capital investment, though, as well as smaller monthly fees to cover the required connections for making and receiving calls.

Virtual Phone System

Another option for businesses is a virtual phone system. These systems don't require any equipment – not even office phones. A virtual system works as an extensive call-forwarding tree. You set these systems up so all calls to your main business number are automatically routed to your employees' mobile phones. You have total control over where the calls are routed and in what order. These systems charge monthly fees only.

Business Phone System Features

Today's business phone systems offer dozens of valuable features for small businesses. This is perhaps the greatest benefit of cloud-hosted systems: They have opened the door for small businesses to access a multitude of features without having to spend a ton of money. Previously, only larger businesses could afford feature-rich systems because of the capital required to install the necessary equipment.  

  • Unlimited calling: Many of today's cloud-hosted VoIP phone systems include unlimited domestic calling for no additional charge. This gives you a fixed cost for the monthly service that doesn't fluctuate based on how many calls your business makes and receives.
  • Automated attendants: An auto attendant answers calls made to your business and routes calls to the proper employees or departments.
  • Ring groups: This feature allows you to group employees so that, if someone calls needing someone in that group, such as customer service, all of the employees' phones will ring. You can choose for phones to ring in a specific order or all at the same time.
  • Voicemail: In addition to traditional voicemail service, many business phone systems offer voicemail-to-email functionality. This feature sends audio recordings or transcriptions of voicemails to an employee's email inbox so they can read or listen to their messages even if they are away from the office.
  • Call recording: This gives you the ability to record calls. These recordings are then stored in the cloud or on your computer for playback later.

Other valuable features many business phone systems offer include extension dialing, call forwarding, call queues, and integrations with services like Microsoft Office and Google Workspace.

These systems also offer features that can boost a business's collaboration abilities, such as video conferencing, instant messaging, presence indicators and online meetings. 

Unified Communications Solutions

Today's business phone systems offer much more than a way to make and receive phone calls. Many of today's solutions, including some of our best picks, are unified communications systems.

Instead of focusing solely on a business's calling needs, unified communications systems support all of the ways employees now communicate with customers, clients and co-workers. This encompasses traditional phone calls, audio conferencing, video conferencing, instant messaging, online faxing and text messaging.

Many of these components used to be provided by different vendors. For example, a business might have had one provider for its phone system, another for conference calling and a third for video conferencing. Unified communications systems tie all of those into one platform.

  • Phone calls: This is a traditional phone service that allows employees to make and receive calls. Most providers offer both local and toll-free numbers.
  • Conference calling: Unified communications systems include a conference bridge that allows you to host your own conference calls. The number of people who can be on a call at one time depends on the provider. Some systems support five to 10 people, while others allow for hundreds of people at one time.
  • Video and web conferencing: You and your employees can host video meetings with video conferencing hardware or through a computer equipped with a camera and microphone. Most of these services allow for screen sharing, which lets everyone in the meeting view documents or presentations. The number of participants who can be on a video call at one time varies by provider. It could be just a handful or as many as 100.
  • Instant messaging: Many unified communications systems have instant messaging. You and your employees can send messages back and forth to ask questions and collaborate on projects.
  • Text messaging: Since texting has become so popular, some solutions allow you to send text messages from your business line. This allows you and your employees to send text messages to customers without revealing your personal numbers.
  • Faxing: These systems allow you to send online faxes rather than using a dedicated fax machine. You can send a fax to a recipient's email or fax machine from the platform.

Having all of these tools on one platform can make communication much easier for employees, making them more productive.

Cloud-hosted systems have really driven the expansion of unified communications systems. Instead of paying tens of thousands of dollars for an on-premises system that houses all of these features, you can get all of this through a cloud-hosted service for a low monthly per-user fee.

Advantages of Business Phone Systems

Modern business phone systems offer all of the advantages with practically none of the disadvantages of older landline systems, which require expensive on-premises hardware to purchase and maintain. Today's cloud-based business phone systems also do far more than make calls. They support video conferencing, team messaging, SMS and online faxing, and they offer integrations with popular business software and CRMs to properly manage customer data and communications across the entire business.

Flexibility is another area where business phone systems have evolved, allowing employees to take calls on any internet-connected device, including computers, laptops, tablets, mobile phones and IP phones, that has the same functionality as a traditional-looking desk phone. Businesses can send inbound calls to all devices at one time or set up ring groups that dial specific teams or employees with a simultaneous or sequential ring setting to ensure all inbound calls are properly routed and received.

While some traditional landline users may fear poor quality due to a bad internet connection, the reality is that cloud-based phones are on par with landline systems in terms of audio quality and reliability. The majority of business phone system providers offer uptimes of 99.999% and higher with service-level agreements. As part of their analytics tools, many providers also include quality-of-service reporting, which details the level of quality for every call that's made. With a lower monthly cost, no hardware to manage and an impressive list of call management tools, a cloud-based business phone system is a very compelling option for many business owners and managers.

Business Phone System FAQs

Which kinds of businesses benefit most from a good phone system?

All businesses can benefit from a good phone system, though not all businesses will benefit from the same type of business phone system. Communicating with your customers and clients in a professional manner is critical. That's why relying strictly on mobile devices can cause problems. You want to make a great impression on your customers. A greeting from an automated attendant is a great first step; it shows that your business is a legitimate operation.

That's why businesses that don't need a traditional office phone system should consider investing in a virtual phone system. These systems allow businesses to present that professional image while still relying on their mobile devices as their main communication tools. Virtual systems include automated attendants and a host of other valuable features. In addition, when you make outbound calls, your business number, not your mobile number, is displayed to the person you are calling.

For larger businesses, business phone systems not only allow you to present a professional image to your customers, but they also give your employees all of the communication tools they need to do their jobs. Access to mobile apps, which allow your employees to take their business lines with them wherever they go, and video conferencing services ensure that they can connect with anyone, regardless of where they are and how they want to communicate.

What is unified communications?

Unified communications is the ability to access all of your communication tools from one platform. Many of today's business phone systems are unified communications systems. While these systems still offer traditional phone service, they include other communication tools that professionals now rely on.

The additional features in unified communications services include audio, video and web conferencing; instant messaging; and text messaging. Previously, in order to have all of these communication tools, organizations had to use a different service provider for each tool. Unified communications streamlines the process by allowing you to access all of these features from the same provider. This not only boosts employee productivity, but it can also be a significant cost-saver for businesses.

What is the best business phone system?

Since every business is different, it is hard to say that one business phone system can fulfill everyone's needs. That's why our recommendations for the best business phone systems are based on different use cases, like best for small businesses, best for remote employees and best for call centers.

For each use case, we examined the functions and tools that different business types need from a phone system. We then compared and contrasted the various phone system providers based on those criteria.

You can read specifics on each selection in our in-depth reviews.

When is the best time to invest in a good phone system for your business?

In today's highly competitive market, it's never a bad time to invest in a business phone system. There are so many providers seeking new customers that they are always offering some type of discount or incentive to sign up. This could be a few months of free service, free phones or discounted rates.

That being said, we have noticed that a lot of providers seem to ramp up their incentives near the end of each quarter. As they close their books on the quarter, providers want the best numbers possible, so they may offer extra incentives to get more clients. You might want to consider this before you start talking to providers.

What is the difference between a business phone service and a business phone system?

There aren't many differences between a business phone service and a business phone system. Both provide you with all the tools you need to effectively communicate with those inside and outside of your office. 

When you are evaluating which one is best for your business, you want to look at how well the system runs. Is the phone service reliable? This is especially important for cloud-hosted PBX systems. Traditionally, business phone services were based on landlines. Reliability was rock-solid because everything was hardwired and you weren't dealing with the internet. Today, as cloud-hosted PBX business phone systems become increasingly popular, finding a business phone service that offers the same reliability as a landline system has become crucial.  

One of the key factors to determine reliability is uptime statistics. Uptime is how often a cloud-based phone system is up and running. One of the most important elements of a business phone system is that you can pick up the phone and make a call whenever you need to and that whenever someone is calling you, they can get through. The best business phone services and systems have uptimes of 99.999%. This means that service is down for a handful of minutes each year. Some business phone service providers go as far as to guarantee their uptime – if it ever falls below a certain threshold, they will reimburse you.

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

What makes today's cloud-hosted unified communication systems so appealing to small businesses is that they provide the same functionality as systems that large businesses use.

Before the advent of VoIP and cloud-hosted solutions, large businesses were typically the only ones that could afford the expensive onsite equipment for a robust phone system with features like automated attendants, extension dialing and call queues.

VoIP, specifically cloud-hosted VoIP phone systems, has leveled the playing field. There is no longer an expensive point of entry, so small businesses can easily implement these systems in the same way large businesses can.

One difference might be the service tiers that small and large businesses choose. While small businesses might choose a lower-tier plan that doesn't offer every feature under the sun, larger businesses may be able to afford the more expensive plans that give them access to everything the phone system provider offers.

How much does a phone system cost for small businesses?

The cost and the pricing structure of a small business phone system are determined by where the system will be hosted. If it is hosted in the cloud, all you have to worry about are ongoing monthly fees for each user. Prices are typically $10 to $60 per user per month, depending on how many features and tools you want.

If you want to host your business phone systems on-premises (inside your physical business location), you need to plan for one-time upfront costs. For all of the equipment and installation, you can expect to pay several thousand dollars. In addition, there will likely be recurring monthly payments for your actual calling services. 

How do you set up a small business phone system?

A huge benefit of today's business phone systems is how easy they are to set up. VoIP systems are completely managed from an online portal. Administrators can log in to the portal to assign business phone numbers and extensions, add new users, delete users, and turn features on or off for individual users. You can access this portal from anywhere with an internet connection.

Who benefits most from VoIP office systems?

Employees are the ones who can benefit most from a VoIP business phone system. These systems provide employees with tools to facilitate all of their communication and collaboration needs. Voicemail-to-email, call recording, instant messaging and call forwarding are some of the valuable tools employees can access.

Additionally, VoIP systems allow lots of mobility. Many offer their own mobile apps that give workers the freedom to answer and make calls to and from their business lines via their mobile devices. This helps ensure that they never miss an important call.

Small business owners also are huge beneficiaries of VoIP office systems. These systems give small businesses access to features and tools that were previously affordable for only larger organizations. The ability to install these systems for a relatively low price is a huge advantage for small businesses.

Can you use a VoIP phone as a regular phone?

Technically, there are IP phones and analog phones. Most of today's VoIP phone systems use IP phones. These phones plug directly into your internet router and are essentially ready to start making and receiving calls immediately.

In order to use an analog phone with many of today's VoIP systems, you need a special adapter that allows these phones to connect to your network.

Jeff Hale
Jeff Hale
Business News Daily Contributing Writer
Jeff Hale is a writer and editor based in San Diego with a background in business development and marketing. He has identified new market opportunities for Fortune 500 companies and developed communications strategies and digital branding for tech startups and small businesses. Jeff covers emerging technologies and business solutions with a focus on efficiency and growth. He holds a Bachelor’s degree in English from the University of California, Irvine, and an MBA from Chapman University.


Image Credit: Prostock-Studio / Getty Images
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