Cost Savings with VoIP Business Phone Systems

If you own or manage a small to medium-sized business, you know how important communication is. Being able to efficiently connect with customers, employees, and vendors is critical for operations and growth. At the same time, you need to keep a close eye on expenses and find ways to maximize your budget.

One area where many businesses can realize significant cost savings is in their phone system.

Traditional landline systems with physical handsets and infrastructure can be extremely expensive to purchase, install, and maintain. However, Voice over Internet Protocol (VoIP) systems offer game-changing savings and benefits.

In this post, we’ll explore the major advantages of switching to a VoIP business phone system. We’ll look at how VoIP saves you money on equipment, service fees, maintenance, and more. We’ll also discuss key features beyond cost savings that can improve productivity and operations.

What is VoIP, and How Does it Work?

Before we delve into the depths of dollars and cents saved, let’s lay the groundwork. What is this VoIP and how does it work its magic?

VoIP allows you to make phone calls using the internet, rather than traditional phone lines. It takes your voice, transforms it into digital data, and sends it zipping along the superhighway of cyberspace to its destination.

Think of it like sending an email. Your words are the message, the email is the envelope, and the internet is your friendly neighborhood mail carrier. It’s a simple, seamless way to communicate, and all you need is a reliable internet connection.

Now, let’s dive into the different ways a VoIP system can help you save.

Equipment and Installation Costs

The first and most direct way VoIP saves money is by eliminating the need for costly PBX hardware. With traditional landline systems, the PBX (private branch exchange) is the physical box that routes calls and provides features like voicemail, call conferencing, call transfers, and more.

Purchasing and installing a PBX unit with dozens or hundreds of extensions can easily cost tens of thousands of dollars. Maintenance contracts and repairs add even more ongoing expenses. However, VoIP systems are entirely software-based and hosted in the cloud. There’s no physical box taking up space in your office and no expensive maintenance.

In addition to ditching the PBX, VoIP systems use software phones that connect to the Internet. These VoIP phones are dramatically cheaper than traditional desk phones. Basic VoIP phones start at around $50 per unit, compared to hundreds per handset for legacy phones.

With a VoIP system, you can deploy high-quality desk phones across your whole office for a fraction of what a traditional phone system costs. No expensive in-office wiring is needed either since VoIP phones use your existing Ethernet network.

Monthly Service Fees

Another major expense with traditional phone services is the monthly bill for usage, features, and service. Legacy phone companies like AT&T, CenturyLink, and Verizon charge substantial fees for calling plans and add-ons. Basic functionality like voicemail boxes, call forwarding, conferencing, and auto-attendants come at a premium. International calls also quickly become prohibitively expensive.

In contrast, most VoIP providers include unlimited domestic calling and all standard features in a simple flat monthly rate. There’s no need to pay extra for voicemail boxes or other capabilities. International calls are bundled at low flat rates as well.

With VoIP, you can easily save 50% or more compared to your current monthly phone bill. Plus, some VoIP providers like Nextiva even offer completely unlimited international calling to dozens of countries for no additional fee.

Maintenance and Repair Costs

In addition to the PBX equipment and monthly service fees, traditional phone systems come with ongoing maintenance expenses. You’ll need regular maintenance visits from phone technicians to keep the PBX and phone lines working properly. These maintenance plans renew each year and commonly cost several thousand dollars for a medium-sized business.

However, a business VoIP system has no physical hardware to maintain. The entire system is managed through software and hosted remotely by your VoIP provider. This eliminates the need for any maintenance visits or fees. With VoIP, you’ll never need to call the phone company for repairs or troubleshooting.

Lower Costs with Remote Work Options

The shift to remote and hybrid work also impacts phone system costs. With legacy phone systems, employees who work from home need a separate business phone line installed at their house. This incurs more equipment fees and monthly service costs. However, VoIP systems allow remote employees to use a software app on their smartphone or laptop with no extra fees.

VoIP systems give distributed teams flexible calling options. Whether employees are in the office, at home, or on the road, they can make and receive calls through one system. This saves money compared to traditional solutions.

The Cost of Growth

As your business grows, your phone needs change. With old-fashioned systems, adding more phone lines and extensions requires expensive upgrades and installations. But VoIP systems are extremely scalable and dynamic.

You can easily add or remove phone lines for employees through simple software changes. There’s no need to call the phone company for technicians to come and make hardware changes. VoIP also lets you scale up or down on features each month based on your needs. This saves a ton on growth costs compared to legacy phone systems.

Long Distance Calls

If your business makes a high volume of long distance calls, VoIP can dramatically lower this cost. The biggest savings come from ditching expensive international call rates charged by traditional phone companies.

As mentioned above, some VoIP providers even offer unlimited international calling to many countries at no extra charge. For domestic long distance, some VoIP services offer flat rates for nationwide calling no matter how many minutes you use.

Taking advantage of low VoIP long distance can save you thousands per year if your business regularly places calls to clients and partners outside your local area. This is especially true for businesses with international supply chains, clients, and offices.

Adding, Moving, and Changing

Here’s one last way VoIP saves you money compared to legacy phone systems. With traditional phones, whenever you need to add, move, or change a phone line, the phone company charges fees. Something as simple as moving an employee to a new office or desk can cost over $100 per occurrence.

However, with VoIP systems, you can add, move, or change phones and numbers instantly through the control panel. There are no costs or fees associated with simple day-to-day changes. This adds up to big savings, especially for companies with high employee turnover.

Key Features Beyond Cost Savings

So far, we’ve focused exclusively on how VoIP saves your business money compared to legacy phone systems.

However, modern VoIP systems also provide many features and capabilities that can improve operations, productivity, and customer service. Here are some of the most valuable benefits beyond cost savings:

  • Auto Attendants – Professionally greet callers and route them to the right department or employee without needing a human receptionist.
  • Visual Voicemail – View and manage voicemail through a visual interface or app, just like email. Transcriptions also convert messages to text.
  • Call Analytics – Get insights into call volume, wait times, abandoned calls, and more to improve customer experience.
  • Call Recording – Record calls for quality assurance, training, and legal purposes.
  • Advanced Call Routing – Send calls based on time of day, department, employee skills, and other rules to route customers intelligently.
  • Mobile Apps – Make and receive calls on any device, anywhere with mobile apps for iOS and Android.
  • CRM Integrations – Connect your phone system data with platforms like Salesforce, Zendesk, and dozens more.
  • Toll-Free Numbers – Acquire toll-free numbers so customers can call your business for free. Local numbers can also establish a local presence.
  • Conferencing – Host multi-party conference calls using virtual meeting rooms with screen sharing.
  • Video Calls – Make video calls directly from phones and desktop apps for enhanced communications.

While the cost savings of VoIP are substantial, these features create even more value in terms of serving customers better and empowering employees. The scalability and flexibility of VoIP also support growth and adaptation as your business changes.

The Bottom Line

Migrating your business communications to a modern VoIP phone system is one of the smartest investments you can make. VoIP systems are far more affordable than traditional landline phones in terms of equipment, service fees, maintenance, and administration. Key features like auto attendants, mobile calling, CRM integrations, and video also enhance operations.

If you currently use a legacy PBX system, it’s time to discover the savings and benefits of VoIP. With it, you can give your organization enterprise-class phone capabilities at small business prices.

Check out our favorite VoIP providers to see which one’s right for you!

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