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what is a virtual phone system?

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Posted on Oct 9, 2021

A virtual phone system is an on-demand phone service that uses web-based telephony to route and connects calls to phones of your choice, anywhere in the U.S. or Canada*. The service can be used with a traditional landline or cell phone, VoIP device such as a softphone on your computer/tablet, or with an IP phone system in your office.

virtual phone system

What are the benefits of a virtual phone system?

A virtual phone system is ideal for businesses that want to avoid the hassle and high costs of maintaining a traditional telephone service while still having access to advanced calling features. Additionally, most virtual phone providers offer toll-free or local DID numbers that can be used with the service.

Virtual phone services are ideal for businesses of all sizes, particularly start-ups and small companies that don’t want to invest in an office PBX or other complicated telephony systems. Virtual phone services can provide a business with on-demand access to advanced calling features such as:

 

  • Call forwarding to a cell phone or any phone in the U.S. or Canada.
  • Extensions for a customized call routing system
  • Voicemail and automated attendant features, including custom greetings
  • Call conferencing so multiple parties can speak on one line at once
  • Speed dial to access frequently-called numbers with one button

 

Virtual phone systems are also increasingly popular among entrepreneurs, freelancers, and home-based businesses that rely on an internet connection.

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Examples of companies that use virtual phone systems include online retailers who do business over the phone, lawyers who don’t maintain a traditional office, contractors who subcontract their work out to other companies (and thus can’t put their number on a business card), or contractors who want a local number in an area code other than where they live.

What’s the difference between a virtual phone system and VoIP?

VoIP stands for Voice over Internet Protocol, the technology used to transmit telephone calls via data networks such as the internet. A virtual phone system can be used with a traditional phone service (landline or cellular), VoIP devices such as a softphone for your computer or tablet, or an IP-based telephone system in your office.

  • Virtual phone service is ideal for small businesses that want to avoid the hassle and high cost of maintaining a traditional telephone service while still having access to advanced calling features.
  • VoIP is generally more flexible than a virtual phone service because it can be used with any internet connection. In addition, some VoIP services let users set up their outbound routes and rules for call processing instead of limiting them to the options presented by the service provider.
  • A virtual phone system may be a more cost-effective solution for some small businesses because it doesn’t require additional equipment or software. However, VoIP does provide more flexible features for managing incoming and outgoing calls.

What’s the difference between a virtual phone system and an office PBX?

A traditional telephone service uses dedicated digital circuits (T1, T3, E1, etc.) to connect a central office (CO) with the telephones served by that office. Virtual phone service is an on-demand technology that uses IP data networks such as the internet to route and connect calls to phones of your choice.

  • An office PBX or other advanced telephone system provides more call routing options than a virtual phone system.
  • Virtual phone services are ideal for businesses that don’t want to invest in an office PBX because it does not require equipment or dedicated circuits (T1, T3, E1, etc.) to route calls.
  • Most modern PBXs can be programmed with custom call routing functions that replicate the features of a virtual phone system.
  • Virtual phone systems are less expensive to maintain because you are billed for minutes used instead of paying a monthly service fee. However, businesses that require lots of outbound calls may be better off with a traditional telephone service because they can buy extra capacity as needed, instead of being limited to the included call allowance.
  • If your business uses VoIP telephone service, you can potentially save on monthly service fees by buying your own equipment instead of paying a monthly recurring charge for the VoIP service. However, this will require additional upfront capital to purchase phones or other devices that let you connect to the internet and place calls.
  • Because they don’t require dedicated phone lines installed in your office, virtual phone systems are ideal for businesses that rent space and move frequently.
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