The Ultimate Guide to VoIP Phone Systems

October 31, 2025

The VOIP Phone System is now ready. Is your old office phone system holding back your business? You’re not the only one who has to deal with a broken desk phone, high landline bills, and being angry because you can’t be flexible. In today’s fast-paced world, where people can work from anywhere, your communication system should help you, not get in your way.

You may have heard the word before, but what does it really mean for your business? A VoIP system isn’t just a new phone; it’s a big change in how your business talks to people. It’s the technology that makes small businesses sound like big ones and big businesses act like new businesses.

This complete guide will give you all the information you need. We’ll talk about what a VOIP Phone System is, how it works, the benefits that will change the game, and how to choose the best one for your team without using any technical terms.

What kind of phone system works with VoIP?

Let’s start with the basics. VoIP is short for Voice over Internet Protocol.

A VOIP Phone System is a kind of technology that lets you make and receive calls over the internet instead of through regular copper phone lines.

The Old Way: PSTN Landlines

People usually think of the Public Switched Telephone Network (PSTN) when they think of their regular phone service. A special circuit of copper wires connects your call. You pay the phone company to let you use this network on every line you use. You usually have to pay more for things like long-distance calls, caller ID, and call waiting.

VoIP (the Internet) is the new way to go.

You don’t need those extra wires with a business VoIP system. It takes your voice and turns it into “packets” of digital data. Then, it sends those packets over the same broadband internet connection you use to send and receive email and surf the web.

You can save money, have more options, and get features that landlines can’t match by using the internet to make calls instead of a landline. Sending a letter through the mail (landline) is not the same as sending an email (VoIP).

What does a VOIP Phone System really do?

It might sound high-tech, but it’s simple to use every day. Let’s go over each part one at a time.

No Jargon: No Jargon: You talk about technology like this:

You pick up your phone or open an app and call a number.

It Changes: The VoIP system takes your voice, which is an analog signal, and changes it into digital data right away. This makes it smaller.

It Travels: Your VoIP provider’s data center gets this information in “packets” over your internet connection, which can be Wi-Fi or an Ethernet cable.

It connects: The provider sends your call to its destination in just a few milliseconds. If you call someone else who uses VoIP, the call stays on the internet. The service provider can easily link a regular phone number to the regular phone network.

The person on the other end only hears a normal phone call. You don’t have to tell them that you use the web to call people.

What do I really need to use a VOIP Phone System?

This is the best part. You have the choice.

You only need one thing: a fast internet connection. As long as your internet connection is fast enough to stream videos, VoIP will work.

A Device (You Pick):

VoIP desk phones, also called “hard phones,” look and feel like fancy office phones, but they connect to the internet instead of a phone jack.
You can use “softphones” or “software phones” on your computer or phone. Your laptop or phone is now your work phone. This is what lets people work from home.
You can connect your old desk phone to your internet router with an ATA (Analog Telephone Adapter), which is a small box. This is a great, low-cost way to change.

The Big Benefits of a VoIP System for Business

This is the “why.” Switching to a VOIP Phone System is more than just a small upgrade; it’s a smart business move.

1. Saved a lot of money

This is the main reason why companies change.

Lower monthly bills: Most VoIP providers charge a set amount for each user every month. This usually means that you can make as many long-distance and local calls as you want without paying more. Studies show that companies can save 50% to 75% on their phone bills.
No Maintenance: The provider takes care of all the hard-to-manage hardware and software (the “PBX”) in their own data centers when you use a hosted VoIP solution. You don’t have to pay a lot of money for a server or hire an IT expert to take care of it.
Free Calls Within the Network: Calls between employees or offices are almost always free, even if they’re in different countries.

2. Unmatched ability to grow

Your phone system shouldn’t get in the way of your growth; it should help you grow.

Do you need a new phone line? Old Way: You had to call the phone company, set up a time for a technician to come out and do the work, and then wait days or weeks for them to put in a new wire.

VoIP Way: Need a new line? To add a new line right away, log in to your online admin portal and click “Add User.” That’s all there is to it. This “on-demand” scaling is great for businesses that only need more space at certain times of the year or that are growing quickly.

3. The most freedom and movement

This is what will change everything after 2020.

Work From Anywhere: With a softphone app, you can work from anywhere. You can get your business phone number on your phone and computer. You can answer and make calls from your office number no matter where you are: at your desk, at home, in a coffee shop, or at the airport.
“Find Me / Follow Me”: Make sure that your calls go to your desk phone first, then your mobile app, and finally your home office. You won’t miss another important call.
Business Professionalism: Your employees can use their own phones for work without having to give out their personal cell phone numbers. The app uses your business phone number to protect their privacy.

4. A set of useful tools (included)

You had to pay more for everything you wanted on regular phones. Most business VoIP plans come with all the features that a business needs.

What You Should Know About Your New VOIP Phone System

What did we just say? Let’s look at the best ones that will make your small business look and act like a Fortune 500 company.

The Auto-Attendant (Virtual Receptionist) says, “Press 1 for Sales, Press 2 for Support.” This feature professionally answers your calls 24/7 and sends them to the right person or department. This makes it look like your business is bigger and better organized.
Voicemail-to-Email (and Voicemail Transcription): You can get your voicemails sent to your email as audio files. Some providers even offer transcription, which lets you read your voicemails quickly, like an email or text.
Call Recording: You can record important calls with just one click. This is helpful for training, making sure the work is good, or checking facts with a client.
Call Queues: For businesses that get a lot of phone calls. When someone calls, they don’t get a busy signal. They listen to music or announcements from professionals while they wait instead.
Video Conferencing & Team Messaging: Most modern Voice over IP (VoIP) systems are now part of a “Unified Communications” (UCaaS) platform. This includes video calls and team messaging. This means that your phone app has video calls and a team chat, which makes it easy to keep all your business messages in one place.
Advanced Call Analytics: Do you want to know when you get the most calls? How many phone calls did your salespeople make? Or how many calls went unanswered? An analytics dashboard can help you run your business better.
CRM Integration: This is a great way to connect CRM systems. You can link your VoIP system to your CRM, which could be HubSpot, Salesforce, or another one. When a customer calls, their information pops up on your screen right away. You can keep all of your calls and notes in one place.

The Big Choice: Hosted VoIP (VoIP in the Cloud) or VoIP on Your Own Property

When you first start shopping, you’ll see two main types of things. This is a very important choice.

“PBX,” which stands for “Private Branch Exchange,” is the part of your VOIP Phone System that makes it work. It sends calls to the right place and handles all the features. What is the location of that brain?

1. VoIP on the property

You buy and own all the hardware, like the server or “IP-PBX,” and it stays in your office.

Pros: You are the boss of everything. You only have to pay for your SIP trunking and internet lines after you buy it.
The bad thing is: The price is very high at first. You are responsible for all repairs, improvements, and safety. You need an IT team that is dedicated to their work and does it well.
Who it’s for: Businesses with more than 1,000 employees that already have very good IT departments and very specific needs for security and customization.

2. “Cloud PBX,” which is another name for hosted VoIP

What it is: When most people hear the term “business VoIP,” this is what they think of. Your VoIP provider keeps the “brain” (the PBX) in their secure data centers, which also back up your data. You can find it online.

Pros: You don’t have to pay a lot of money right away. A monthly subscription that is easy to plan for and not too expensive. The provider is in charge of all the security, upkeep, and new features. It’s the best way to “set it and forget it.”
Cons: You need to be connected to the internet to use it, just like with “on-premise” VoIP. You can’t manage things as well as you could if you owned the server.
Who it’s for: 99% of businesses, big and small. It’s cheaper, easier to use, and can be used in more ways.

Five Things to Look for in the Best VOIP Phone System Provider

You can find hundreds of VOIP Phone System providers in a short amount of time. How do you make a choice? Don’t just think about the price.

The most important things are uptime and reliability. Say that you want to see their “uptime SLA,” which is short for “Service Level Agreement.” You want “five-nines” (99.999%) reliability, which means that there is very little downtime.
Help for customers: When your phones stop working, you need help right away. Do they always lend a hand? Are they from the same country as you? Do people like the help their support team gives them?
Don’t buy things that you don’t need. Some businesses offer very cheap basic plans, while others offer plans that cover everything. List the features you need, such as Call Recording or CRM Integration, and then look for a plan that includes them.
Integrations: Will the system be able to use the tools you already have? For instance, your CRM, Microsoft Teams, or Google Workspace. Good integrations save you a lot of time that you would have to spend doing things by hand.
Following the Rules and Staying Safe: Is your information safe? Do they encrypt everything from the beginning to the end? If you work in healthcare or finance, do they help you follow rules like HIPAA?

(This is a great place to use Prompt 4 as a picture.)

How to Set Up a VoIP System: Your First Steps

The easiest part is setting up a hosted VOIP Phone System.

Do a speed test to check that your Internet is working. You should be fine if your team is small. If you talk on the phone with more than 20 people all day, you might need a different business internet plan.
Choose Your Provider: Follow the steps on the list.
Get Your Hardware: You can either buy new VoIP desk phones or have your team download the softphone app.
Your provider will help you set up your system. Setting up your call queues, recording your auto-attendant greeting, and giving out numbers is the fun part. You can do a lot of these things in one day.

Are you ready for what’s coming next?

This system isn’t something that will happen in the future; it’s something that is happening right now. It’s normal for any business that wants to be professional, flexible, and save money.

Getting rid of your old landline will save you a lot of money, but that’s not the only reason to do it. It’s about moving your business to a new place. It’s important that every time a customer calls, they have a smooth, professional experience. Also, your team should be able to talk to each other from anywhere and on any device.

If you still use copper wires, it’s time to switch to the cloud.