Pros & cons of VoIP phone systems for business

Enter a valid full name Full name
Enter a valid email Work email
Enter a valid phone Business phone number
Enter a valid company Company name
Enter a valid number of employees Number of employees

By clicking the button above, you consent to receiving calls and emails from RingCentral. Calls may be connected using automated technology.

Thank you.
A RingCentral sales advisor will contact you within 24 hours.
The advantages of VoIP being utilized by a call center agent
Different people using VoIP service on different locations

So you want to weigh the pros and cons of VoIP

If you have a small or midsize business and have been hearing about the benefits of switching your phone service to Voice over Internet Protocol (VoIP), you might also be wondering if this technology has any drawbacks. In this short article, we’ll discuss both the advantages and disadvantages of VoIP.

First, though, we’ll give away the punch line: for a company looking to upgrade its communication service, the advantages of VoIP far outweigh its disadvantages.

What are the advantages of VoIP?

As we explain in detail on our How VoIP Works page, the most notable benefits that businesses experience when they switch to VoIP phone service include cost savings, greater mobility and flexibility, and increased employee productivity.

Let’s briefly discuss each of these VoIP advantages:

VoIP costs less.

What initially attracts most businesses to VoIP is its low cost relative to the cost of traditional phone services.

The phone bill from an old-school telecom provider typically includes high monthly fees for each physical phone line as well as per-minute charges that can become expensive for a business that needs to regularly make long-distance and international calls. VoIP service, by contrast, is typically much less expensive.

This is because, instead of sending voice calls across the physical wires of the telephone network as traditional phone service does, VoIP simply converts a caller’s voice into data packets and sends that data over the internet to the receiver’s phone. This is how VoIP can transmit a phone call across long distances for the same rates as it handles a local call to cut back the cost of making international calls.

Your employees can use their VoIP business lines anywhere.

Another advantage of VoIP, one that also attracts small and growing businesses, is that it allows employees to take and make calls on their “work” phone numbers from anywhere, using any internet-enabled device. This could include an office phone (if the employee has a physical phone in the office), a desktop computer, a laptop, or even a personal smartphone.

To a company with an on-the-go staff or with employees who work from home, this added mobility offers a tremendous advantage. Whereas a traditional landline-based office phone requires an employee to be physically in the office to receive or place a call through their business number, a VoIP phone service allows that employee to make or take that same call from anywhere, on any device, and the caller at the other end will see only that the employee is talking to them from their business line.

VoIP phone service makes it easy to add lines, change locations, and scale your phone service as your business grows.

Signing up for a standard business phone service usually means setting up onsite hardware: physical phones, copper wires, and some sort of appliance to manage this phone infrastructure, such as a PBX (Private Branch Exchange).

This type of onsite physical solution limits how many phone lines your company can add (before you need to pay for more physical lines), requires you to pay for installation of wiring for each phone line, and also means that you’ll have to rebuild the entire system at a new location if you move to a new office.

With a VoIP solution, you won’t have any of these limitations. VoIP is managed in the cloud, so you won’t need copper wires, and you won’t have to maintain an onsite PBX or any physical hardware to manage your company’s phone infrastructure. You won’t even need the physical desk phones for your employees unless you want to have them. (With a VoIP service, you can use physical phones to make VoIP-enabled calls if you choose.)

Also, because your VoIP service is limited only by bandwidth—not by an arbitrary number of physical phone lines—you can add as many new business numbers as you want, anytime. This means VoIP can easily scale up to meet the needs of your growing company.

VoIP service helps your staff become more productive.

Let’s say your company employs an in-house sales team, and these sales reps need to spend a lot of time in the field while also needing to be available for important business calls. Perhaps they need business faxing as well.

If you have a traditional business phone solution, your reps will either have to spend more time in the office (waiting by the phone) than they’d prefer, or they’ll have to use their personal mobile numbers for work. Alternatively, your company will have to pay for mobile phones for each rep.

Also, if your reps need to send or receive contracts, purchase orders, or other documents via fax, they’ll either have to run back to your office to deal with those faxes or hunt for an office supply store while they’re on the road and hope it has fax service.

Now let’s assume that instead of a standard business phone system, you’re using VoIP. Your sales reps can always be available for important business calls—even while they’re on the road—because they can easily take those calls on any internet-enabled device. The caller will see only your rep’s business phone number, even if your rep answers that call on a smartphone, a laptop, or any other device equipped with your VoIP provider’s app.

Also, your reps can send and receive—and even sign—faxes electronically, from anywhere, using a VoIP service like RingCentral. This means if you have a sales rep in the field visiting prospects who also needs to review an incoming fax contract, then sign and fax it back to close the deal, that rep won’t need to waste time running back to the office. Your rep can view the fax electronically using the app, drop in a digital signature, and send the fax back—all without printing it out or going anywhere near an actual fax machine.

RingCentral delivers high-touch communications to a high-tech motorcycle manufacturer

What are the disadvantages of VoIP?

Okay, we’ve discussed some of the ways VoIP phone service can benefit small and midsize businesses. Now let’s review the potential disadvantages:

VoIP requires an internet connection.

VoIP carries voice calls (as well as texts, faxes, video chats, and other types of data) across the internet. This means that for your VoIP phone service to function, you will need a reliable, high-bandwidth Internet connection.

In most cases, this will not be a problem at all. If your office’s internet service allows your staff to regularly transmit high-res images, graphics-intensive PowerPoint files, and other heavy data files without trouble, then your employees won’t have trouble having clear, reliable VoIP phone calls.

Also, even if your company’s office internet connection were to experience an outage, you could still take or make business calls (and transmit other data) from your mobile phone using the VoIP provider’s app and those phones’ cellular connections.

But because this is one way in which VoIP service can be limited—the need for a functioning internet connection—it’s still worth keeping in mind as a potential drawback.

Not all VoIP services provide data security.

You’ve probably seen some news about major corporations’ emails being hacked, so you likely have an idea that data traversing the internet is not necessarily secure.

If you choose the wrong provider, your company’s data will definitely suffer from a lack of security.

This can raise all sorts of questions for a small business that’s thinking of making the transition to VoIP for its organization.

  • Could voice calls be overheard by eavesdroppers?
  • Could other data sent through a VoIP system—like texts or faxes—be intercepted?
  • Will the VoIP communications solution comply with relevant data privacy laws?

These are all important questions to ask before switching to VoIP. Of course, the best way to deal with them is to simply choose a VoIP provider with proven security and compliance expertise.