Virtual phone systems are a highly innovative telecommunications tool, and they’re rapidly becoming staples in many industries. 

Whether you’re starting up a new business, running a middle-size eCommerce store or managing a big corporation, a virtual phone system will bring significant benefits. 

However, there are several misconceptions and over-simplifications surrounding virtual business phone systems, which is why you will learn exactly what a virtual phone system is and how it works in this article.

What is a virtual phone system?

In a nutshell, virtual phone systems use the internet to manage and reroute calls, as opposed to cables, as a traditional phone system would. They provide all the functions of a typical landline, with additional features and benefits.

Cloud-based phone systems are currently the number one communication solution for business owners because they are not bound by geographic locations, enabling businesses to easily interact with clients around the world.

Virtual phone systems include jargon such as “virtual phone number” and “virtual PBX.”

To get a good grasp of these terms, it’s necessary to understand first how a virtual phone system works.

How Do Virtual Phone Systems Work?

The key components of a virtual phone system are the internet and the cloud PBX.

The internet is essentially where everything takes place when using VoIP phone systems. The VoIP system converts your voice signals into digital packets and sends them to the person you’re communicating with. The system then converts the digital signals back to voice signals as soon as they reach your correspondent.

On the other hand, cloud PBX manages and routes calls to all the connected devices. Your VoIP service provider will give you access to your cloud PBX by creating a user account. 

Virtual Phone System vs PBX

PBX stands for Private Branch Exchange; it’s the core of business communication systems. A PBX can either be on-premise or hosted. 

Initially, PBXs were managed manually. That is, certain cables had to be plugged into specific sockets to reroute an incoming call. However, over the years, PBX has adopted an automated working model.

Regarding virtual phone systems, they also feature a PBX, except it’s located on the cloud. As a result, they take business communication to an entirely new level.

In addition to making and receiving phone calls, a virtual business phone system also enables your business to connect several types of devices and manage them from a single portal.

Virtual Phone System vs PBX

Benefits of Using a Virtual Phone System

Let’s take a look at some of the most valuable benefits of a cloud-based phone system;

1. Shredding Costs

Every business’ main objective is to make a profit. Profit margins can be improved by either increasing revenue or cutting costs. As a business owner, you know that the latter is a lot more feasible.

That said, a great way to reduce costs is by re-evaluating your operational costs and opting for budget-friendly and effective solutions. That’s where a virtual phone system comes in.

With a cloud system, you could end up shredding costs by up to 50% because you’ll need fewer hardware components, which also translates into less maintenance costs. Additionally, you’ll be charged a monthly subscription fee instead of allocating a huge chunk of your budget to pay for phone bills, plus purchasing hardware, installation costs, as well as technical support.

2. Near-effortless Set Up

With all the elements and pieces that make up a traditional phone system, you can only imagine how tedious and time-consuming all the setup must be.

Let me paint the picture for you:

Once you choose your service provider, you’ll proceed to purchase all the equipment to build your system from the ground up.

After that, your service provider will send over a team of professionals to install all the components, set up the actual system, and train your staff.

The entire process isn’t just lengthy and messy, and it can also be unpleasant. Plus, you’ll have to deal with communication downtime until everything is set.

In comparison, setting up a virtual system is only a matter of minutes.

3. Multiple Devices

When the average person owns at least two communication devices, businesses should be equipped to match that kind of flexibility in this day and age.

Virtual phone systems feature universal standards that allow communication across devices, like desktops, laptops, tablets, and smartphones. Even traditional phones through an adapter.

Thus, you can keep your communications going no matter what device you use. This also introduces greater mobility and flexibility since you’re always in a position to take calls, respond to queries via email, texts and even social media messaging.

4. Ground-Breaking Call Management

Without a proper management solution, you’ll find it quite easy to drown in a pool of incoming calls and queries.

To start off, you need call filtering to ensure the right person can easily be contacted. Then, virtual phone systems can reroute calls from your main number to all departments through an auto attendant or a feature called smart call forwarding.

Another perk of smart call management is that not only can you set up automated call forwarding to align with your business hours, but your team can also forward calls directly to voicemail if they’re unavailable.

How Do I Set Up a Virtual Phone System?

An attractive aspect of virtual phone systems is how easy they are to set up. In fact, you don’t require an entire team of IT professionals. Instead, all you need is your desktop and additional accessories.

1. Get a Virtual Phone Number

Working with virtual phone systems doesn’t mean you’ll have to ditch your phone number. If you have an existing number, you can simply have your calls rerouted to that number. Alternatively, you can opt for one of the following options:

  • Local access number: this is ideally used by businesses whose customer bases are located in one area and not scattered nationwide.
  • Toll-free: do you want to make it easier for clients to reach you? A toll-free number allows your customers to call your business without getting charged. The business takes care of the costs.
  • International Toll-Free Numbers: Also known as ITSFN, they’re essentially toll-free numbers that can reach far beyond clients all over the globe.
  • Vanity Phone Numbers: one way to promote your business is through extensive branding and a Vanity number does just that. Vanity numbers are ultra-personalized numbers; they could spell out your business name or part of it.

2. Set Up Your Account and Customize Your System

Once you have a cloud phone number, you’ll be able to set up your account and install any hardware components. 

Unlike traditional phone systems, a cloud-based phone system runs on the cloud. This means that your VoIP service provider will set up your user portal and give you the credentials to access it.

After that, you can log in to your user portal and customize your interface; that is, add all the features you need and modify default settings to match your business needs.

3. Add Your Staff

As a final touch, you can add your team members by again logging in to your user portal and scrolling to ‘’add users’’. The number of people you can integrate into the system depends on the plan you purchased.

How to Know If You Need a Virtual Phone System?

Virtual phone systems have gained so much traction over the past decade that they have quickly become essential for many businesses, especially those doing business online.

If you want to know if this technology would suit your business needs, here are some signs to consider before investing in a virtual phone system:

Increasing call volumes

Virtual phone systems are equipped to scale your communication capacity effortlessly and with no additional costs.

If your business is experiencing an increase in call volume either because you’re getting new customers or doing business with more people, then it’s very likely that an on-premise system is not able to keep up if the trend continues like that.

Instead of adding phone lines and connecting them to a traditional phone, you’d simply have to add another staff member to your user portal with a virtual system.

On top of that, your system would also be able to direct calls to voicemail and answer simple queries.

You’re looking to innovate

If you are looking to be more competitive and efficient by investing in innovation, a good way to start is to optimize your phone system. You’re taking your first step towards virtualization with a virtual phone while also saving money and improving productivity.

Your Team Members Work Remotely

How do you manage an entire staff, track productivity and promote team collaboration in one fell swoop? 

These are some of the functionalities incorporated in a typical virtual phone system, and they will come in handy if your business decides to adopt a remote-working environment.

Virtual Phone System FAQs

1. What is The Best Virtual Phone System?

Picking the ideal virtual phone system for your business takes time, especially if you haven’t assessed your specific needs and expectations. While the vast majority of cloud-based phones offer similar functionalities, some of them are a bit unique. But when it comes to cutting through the noise within the cloud telephony space, ULTATEL is your best bet.

2. How much does a virtual phone system cost?

There’s not a single answer to this question because pricing depends on the plan you opt for, the features included in your plan, as well as your service provider’s pricing policy. For example, with ULTATEL, you can get your virtual phone system for as low as $15.95 a month.

3. What are the top features of a virtual phone system?

  • Team Collaboration– virtual phone systems allow you to perform functions like assign tasks, track progress and even host virtual meetings.
  • Call management– With this feature, outbound calls can be forwarded to specific employees without having to dial another extension.
  • Video conferencing– One way to go about improving collaboration is through video conference calls.
  • Call analytics and reporting– virtual phone systems automatically provide basic reports on business calls.

4. Are virtual phone systems good for start-ups?

Start-ups typically face countless funding hurdles in the midst of finding their kickoff.  Consequently, opting for budget-friendly solutions is a must. For example, a traditional phone system will put lots of strain on a start-up budget, whereas its cloud-based counterpart can provide additional benefits at a much lower cost.

5. Can I get my own virtual phone number?

You can get your own virtual number by your own means or through your VoIP service provider like ULTATEL. What’s more, you can even customize it if you get a vanity virtual phone number.

Virtual Phone System Takeaways

We’ve established that a virtual phone system is a business must-have, especially if your business depends heavily on the internet for day-to-day operations. 

However, it’s worth remembering that they aren’t all built the same, and you need to assess your needs to ask the right questions and make your final decision.