A young woman speaks to a customer through her laptop computer and using a cordless headset.
Because VoIP phone systems use a broadband internet connection, users have flexibility, both with the devices they can use and integrations with their existing business software. — Getty Images/Marco VDM

Voice over Internet Protocol (VoIP) phone systems let users make and receive calls from mobile devices, computers, and desk phones. But the benefits of VoIP don’t end there. The services offer many advanced features, from call recording to customer relationship management (CRM) integrations. Indeed, Business News Daily reported, “More than one-third of all businesses are now using a VoIP phone system, with the vast majority of those being businesses with fewer than 50 employees.”

As companies look to modernize their systems, business phone services are an excellent place to start. Find out how VoIP differs from conventional office setups and how your business can leverage the advantages of VoIP.

VoIP: definition and how it works

According to the U.S. Federal Communications Commission (FCC), “Voice over Internet Protocol (VoIP) is a technology that allows you to make voice calls using a broadband Internet connection instead of a regular (or analog) phone line.” VoIP service providers offer home and business systems. Both solutions allow users to call from any internet-connected device, including cell phones, computers, or VoIP phones. Sometimes, you can buy adapters for analog desk phones with your internet phone service.

VoIP works on various devices through a softphone application, which is software that provides all the telephone functions like a dial pad and contact list. Along with a softphone app, professionals may wear VoIP headsets that plug into their devices. These are especially helpful for high-volume users, like those handling customer support or working in call center services.

[Read more: Choosing the Best Business Phone System for Your Business]

Differences between VoIP and other business phone systems

The public switched telephone network or plain old telephone service uses copper lines. Most telecommunications carriers no longer maintain or upgrade analog lines. The FCC said, “America's communications networks have been rapidly changing from copper-based networks originally built for voice services to alternative platforms built for a variety of purposes, including broadband, video, and data, as well as voice.”

Businesses used to rely on multiline services or on-premises public branch exchange (PBX) systems. A PBX requires infrastructure inside the building to manage multiple lines and advanced features, like call routing and voicemail. However, both options are expensive to maintain and still lack many tools found in modern VoIP systems.

Today, most companies select VoIP phone services, as they have the capabilities of PBX systems without the added costs and maintenance demands. Moreover, many VoIP vendors offer unified communications platforms. These business phone systems unify multiple communication methods, including video conferencing, voice calling, file sharing, and chat messaging.

Vendors charge a monthly fee per user, and many offer a discount for annual prepayment.

Advantages of VoIP

Besides keeping your company connected to the outside world, cloud-based phone systems enable internal collaboration and provide many other benefits. Their flexibility and advanced features are among the top reasons why small businesses switch to VoIP. However, they also increase customer satisfaction while optimizing business processes.

The benefits of VoIP for businesses include:

  • Enhanced customer experiences: CRM, e-commerce, and point-of-sale integrations put client details on your screen before every call, allowing you to personalize greetings and record the details of every interaction.
  • Access to softphone apps: Remote teams, particularly call centers or customer service staff, benefit from using all of the features of your VoIP system from any location. They can see presence data for supervisors and co-workers; transfer calls; and get assistance via call monitor, whisper, and barge features.
  • Improved online collaboration: Many VoIP systems have file sharing, one-to-one and group messaging, and other real-time collaboration features. These tools can break down barriers between departments and allow teams to get answers quickly without waiting for a call back or email.
  • Scalability: With VoIP, you can add or remove lines from your online admin portal. Additionally, most services have tiered pricing models, add-on features, and contact center services.
  • Increased productivity: Artificial intelligence, automation, and consolidation of services reduce administrative tasks and application switching. Since many VoIP systems include video conferencing, task management tools, and integrations, your teams focus on core activities in a single software program.

[Read more: 10 Online Collaboration Tools That Will Boost Your Team’s Productivity]

VoIP phone systems for small businesses

There are plenty of service providers for companies ready to choose a business phone system. Vendors charge a monthly fee per user, and many offer a discount for annual prepayment. Most plans include a business phone number, internet faxing, text messaging, and unlimited domestic calling.

Check out services from the following vendors:

  • RingCentral: Founded in 1999, RingCentral is a communication and collaboration platform. It offers unlimited calling, video conferencing, and a multilevel auto attendant.
  • Nextiva: In 2008, Nextiva landed its first customer. Aside from unlimited faxing and calling, the NextivaONE app supports team collaboration and chat messaging.
  • Ooma: Since 2003, Ooma has offered user-friendly VoIP services. Plans include a virtual receptionist, ring groups, and voicemail.
  • 8x8: Established in 1987, 8x8 provides scalable subscriptions with international calling, hot desking, and voicemail transcription.
  • Vonage: Launched in 2001, Vonage is a unified communications platform with unlimited calls and team messaging.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.

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