A VoIP system is a communications system that uses a computer, smartphone, VoIP phones or WebRTC-enabled browsers to make telephone calls and transfer information from one location to another. It accomplishes this through an internet connection. It differs from a traditional phone, also called a landline, in how it sends information and data.

A landline uses copper wires to transmit analog signals. On the other hand, VoIP uses a broadband internet connection to transmit data. The data is transformed from the original analog data, transmitted as digital data and then turned back into an analog signal so that you can understand what is being said.

VoIP systems are often comprehensive office solutions offering voice mail, call recording, custom caller ID and voice mail-to-text features. Many offices use VoIP technology to create a unified communications system for the office that makes it easy for teams to communicate with customers and among themselves.

SIP vs. VoIP

SIP and VoIP are two acronyms that you will see when considering phone systems.

• SIP, which stands for session initiation protocol, is a technology that facilitates many VoIP sessions. It is an open-source communications protocol that is fast between two points. It enables a number of desired data transfers, including voice, file sharing, instant messaging, video conferencing and multimedia sessions.
• VoIP is technically just the voice component of the system’s capabilities. It is the protocol that allows voice telephone calls to be made through an internet connection. It is not limited to a specialized VoIP phone—you can call from a computer or mobile device with an internet connection.

VoIP technology can exist independent from more comprehensive SIP systems when all you need is phone call capabilities. When you need other data-sharing abilities, you need a SIP system. However, the marketplace often refers to more comprehensive solutions as VoIP solutions, creating confusion among consumers.

There are a lot of VoIP service providers out there vying for your business. It can be hard to distinguish which is the best VoIP service for you. There are even some free VoIP providers that you can get service from. Here are some key things to look for in the best business VoIP services:

• Price. You want the solution to be less expensive than analog lines and be able to give you all the bells and whistles you need to run your business successfully. At the same time, when considering plans, look at what features are offered at each tier level. You’ll find that most basic plans, which are the least expensive, have the fewest features. You may have to pay more to get what you want.
• Call Quality & Uptime. You don’t want to contract with a provider that frequently drops calls or has jitter on the line. Many providers offer a 99.99% uptime guarantee. This should help give you confidence that their technology will withstand the daily use you put it through.
• Customer Support: While most VoIP providers offer 24/7 support, some only offer it during business hours. Others charge extra for phone support. Consider your business needs and decide what’s best for you.
• Toll-Free Numbers. Not every company will need this feature, but if this is something that is important to you, make sure that the providers you are considering offer it.

Popular VoIP Phone Service Features

Key VoIP phone features to consider as you select a provider include:

• Automated attendant: Eliminates the need for a receptionist by using an automated system to transfer calls to the right person. An interactive voice response (IVR) system may be part of this solution.
• Caller ID: Sets the tone for a call by informing you who is on the other end of the line. This is vital in sales and service industries.
• Call holding: Allows you to place a caller on hold so that you can complete another conversation or piece of business before addressing their needs.
• Call queuing: Automatically places callers on hold and identifies a wait list queue in the order that the callers first called in. This is also referred to as automatic call distribution or ACD.
• Music on hold: Helps to keep callers on hold for more extended periods of time compared to listening to dead airtime when on hold.
• Custom ringback: Similar to hold music, this is what your inbound callers hear while waiting to speak with someone. It is usually a message or a jingle.
• Hot desking: Gives employees the ability to sign in to any connected device to access their messages and calls.
• Call flipping: This is also called call pulling. It allows you to switch the call from one device to another while still on the call.
• Conferencing tools: Allows for audio or video conferencing with employees or another group you create.
• Call monitoring: Gives managers the ability to listen to calls for training purposes. A message that the “call is being monitored for quality assurance” is usually played at the onset of the call.
• Call whispering: This technology allows a manager to whisper into the ear of the phone representative to help coach them through a call in real time.
• Call barging: Allows managers to take over a call if the phone representative cannot handle the needs of the customer adequately.
• Transcriptions: Useful written records of calls that can be used for training or evidence of call conversations.
• Call recording: Gives managers the opportunity to review not just the words said but the tone and inflection that they were said in.
• Speed dial: A time-saving feature that lets employees make often-called numbers with just a click or two.
• Call forwarding: Lets calls get forwarded to another device so that you can get calls from another location other than the office.
• Digital faxing: Eliminates the need for a nearly obsolete office machine. While most companies rarely use faxes, this gives them the ability to do so from a computer.
• Integrations: Some VoIP systems can integrate with other software, like CRM platforms. This can help you to streamline key functionality within your business while improving your sales and customer support team’s productivity.
• Call analytics: Gives managers key data about call times and critical insights about calls.
• Live chat: A modern alternative that many consumers prefer to use rather than leave a message and wait for a callback.

VoIP is a reliable system, because it uses the more reliable fiber optic and broadband cables that move internet data. Copper wires for landlines tend to be less efficient than fiber optic cables, leading to more dropped calls or noise on the line.

When you get a VoIP phone system, there are a lot of features that come with it. As a reminder, many of these benefits are the result of SIP technology but are packaged as part of your VoIP system.

For everything that it does, VoIP systems are still usually cheaper than getting landlines for the same number of phone numbers.

Drawbacks of VoIP

There are many advantages of VoIP, but there are also some disadvantages that you should consider before making the switch. One of the main disadvantages is that the phone system, thus the quality of calls, is completely reliant on the internet connection quality—the better the connection, the better the calls. However, if your internet connection goes down for any reason at any time, your phones also go down. Lesser-speed internet connections can also lead to call problems with dropped calls or jitter on the line.

Another problem with VoIP is that the connection is not always secure. This means that the calls can be breached easily with others listening to calls. It is important to check with the company you are contracting for VoIP services to see if they use high-level encryption to protect you and your company data.

A final disadvantage of the VoIP system is its use in emergencies. Numbers are not always local as businesses work to develop a presence in specific parts of the country while callers are in other locations. In an emergency, responders first look to the telephone number to locate the caller to render aid. If you don’t have an E911 emergency address connected to the VoIP line, it may take longer for responders to get to you.

How Does VoIP Work?

VoIP needs an internet connection to work. You’ll need certain hardware to transfer the data. The hardware includes a personal computer and cable modem. If you are calling from a telephone, you’ll need a phone adapter or you’ll need to use a VoIP-ready phone. The adapter converts analog signals into digital signals that allow them to be transferred over the internet. During the call, the data is transferred back to an analog signal so that the other party can understand what is being said.

If you’re using VoIP from a mobile phone, you can connect to the internet wirelessly to transmit the data. Data is stored in the cloud and accessed via a dashboard on the computer or mobile device. Data may include contacts and business phone numbers.

Types of VoIP Services

Most business owners think that all VoIP systems are the same. There are some differences in the types of VoIP services that you can get.

Hosted VoIP

A hosted VoIP service is different than an on-premises VoIP solution. When things are on-premises, everything from the equipment to the connection is installed and maintained by the company deploying the system. When hosted, the VoIP system is maintained by the provider of the system. The business deploying the phone system really only needs to supply the phones and internet connection. The provider assumes all other expensive hardware costs.

Cloud-Based VoIP

Cloud-based VoIP phone systems use the internet to make calls and host everything on the provider’s server network. When a business chooses this type of phone system, they don’t have to manage hardware; they simply plug the phones in and dial.

UCaaS

Unified communications as a service (UCaaS) is a cloud-based communications technology relying on six key communications functions. The six communications functions are:

• Telephone capacity
• Audio, video and web conferencing
• Unified messaging
• Instant messaging
• Mobility
• Business processes enabled by communications

The UCaaS goes beyond just the VoIP solutions and incorporates SIP solutions as well. Systems can be customized to serve particular business needs. The best UCaaS providers help businesses improve their processes and streamline daily operations.

CPaaS

Communications platform as a service (CPaaS) offers cloud-based, customized communications services for unified communications systems. Because it is customizable, it is fully adaptable to any business and its needs. Everything is integrated to work in real time on the platform and doesn’t need to access outside systems.

Setting Up Your VoIP System

A lot of the work to set up the VoIP system starts with choosing the right VoIP system. Choose a provider that offers the hardware support, such as phones that you will need for your office. It is also helpful to choose a provider that provides E911 calls that give emergency responders the callback number and location of callers.

Decide how many lines you will need. As you select a provider, you will also want to address needs such as porting over an existing number to your new system. If your business has been around for a while, maintaining the consistency of numbers is important. Be sure to let the provider know this as you sign up for the service.

Once you have chosen a provider and allowed them to do the initial setup on their end, the next item of business is to plug the system in. This means connecting the communications device (phone or computer) to the internet. Your provider will walk you through the configuration steps to ensure that your calls are transferring across the network properly. Test the system to see if any issues need troubleshooting.

Common VoIP Add-Ons

Because VoIP is a comprehensive solution that most providers offer, there are add-ons that you can request to customize your business and serve its unique needs.

Virtual and Vanity Phone Numbers

When requesting a phone number, you can ask the provider for a virtual phone number or a vanity phone number. A virtual phone number allows you to have a number from a geographic region that you are not residing in, helping you better serve customers from anywhere in the world. A vanity phone number is easy to remember because it associates letters with the numbers, often representing part of the company name or slogan.

Video Conferencing

Businesses can use video conferencing to host internal meetings or to have a virtual face-to-face with customers. This is part of the new business model, particularly post-pandemic, and is something most businesses will want as an add-on to their business model. VoIP integrates the best video conferencing software with call functions.

Conference Calling

Hosting conference calls is an important way to hold a virtual meeting or seminar. Top VoIP providers use the best conference call technology and make it a seamless experience.

CRM

Most businesses want their phone system to integrate with their customer relationship management (CRM) software. This means that your phone representatives have access to pertinent client details and purchases as they make the call. It’s an efficient way to provide your people with data. Top VoIP providers work with the best CRM systems.

When determining the best VoIP services, we considered several factors. These include pricing, features, ease of use and customer support. Across hundreds of data points, we weighted certain factors higher, such as price and features, compared to other data points, such as reviews.

• Pricing: VoIP services usually charge a monthly fee per user. However, some providers may charge a flat rate for unlimited users or minutes. Be sure to check the fine print—some providers charge additional fees for features such as call recording or transcription, while others include these features for free.
• Features: As we mentioned earlier, VoIP services come with a variety of features. The most basic include unlimited calling and voice mail, while more advanced features include visual voice mail, call forwarding, toll-free numbers and CRM integrations. Consider which features are most important to your business before making a decision.
• Ease of Use: VoIP services should be easy to set up and use. Look for providers that offer clear instructions and resources in case you run into any problems.
• Customer Support: Businesses can encounter issues at any time, day or night. We rated companies more highly if they provide 24/7 customer support at no additional cost.