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The Ultimate Guide to PBX Phone Systems for Your Business

Last Updated Jul 17, 2023

Written By Top10Ratings

The Ultimate Guide to PBX Phone Systems for Your Business

Short for Private Branch Exchange, a PBX system happens to be a private telephone network employed within a business. PBX phone systems users can communicate externally by sharing numerous external lines for making external phone calls. Similarly, PBX phone systems users can communicate internally within the company via connected internal telephones, as well as connected to SIP Trunks, VoIP providers, analog, ISDN, and the PSTN. PBX systems allow users to have more ‘phones’ as compared to PSTN physical phone lines, allowing for free calls between users and also providing a host of other features such as call queues, IVRs, call recording, voicemail, and transfer calls.

PBX phone systems today are available as virtual or hosted solutions, as well as on-premise solutions which can be run on the company’s own hardware.

Basically, there are two major advantages of using PBX phone systems:

  • Sharing of phone lines
    In this instance, an office of 30 employees can share as less as 15 phone lines, even though they’re limited to just 10 simultaneous calls.
  • Transferring calls
    This allows employees to transfer calls internally and set up a dial-by-name directory or an auto attendant, allowing incoming callers to direct themselves to the correct extension easily sans any confusion.

Users need to know that newer VoIP-based PBX systems aren’t relying on physical landlines, allowing users to support an unrestricted number of simultaneous phone calls as much as their bandwidths allow

Types of PBX phone systems
Basically, there are four main kinds of PBX systems: Traditional, IP PBX, Hosted, and Virtual ones. The differences between them lie in their initial and recurring costs, and exactly how many employees they are best used for.

  • Traditional PBX
    The Traditional PBX system is the original PBX phone system, which is technology based on landlines and banks on a physical PBX hardware box. In this system, the regular, traditional landline phone lines enter the office space and are connected to PBX boxes, after which they are distributed to every desk that the office has. Traditional PBX systems are, however, expensive to set up, with initial costs of around $1,000/seat and recurring costs of around $20/month per seat. Additionally, if the setup doesn’t have traditional analog, their installation costs will have to be taken into account too.
  • IP PBX
    Very similar to a traditional PBX phone system, the IP PBX system’s only difference from the former is that it employs internally digital phone signals, not landlines that are analog-based. Even though the IP PBX employs VoIP technology within it, it could still be relying on analog phone signals once the call leaves the office space. The chief advantage of IP PBX systems is the easier setup process, wherein ethernet cables can be connected to the phones instead of the traditional phone lines, so in case the office is rearranged, there is no arduous rewiring work that needs to be done.

IP PBX systems can also accommodate businesses with remote workers and employees as well as multiple locations. Also, since call transfers and routing are handled through the internet, calls can be transferred easily to somebody in a whole other office (given that they are on the same network). In fact, someone who is working from home can receive calls the same way as in an office setup by plugging in an IP phone.

Even then, IP PBX systems are expensive because of the PBX hardware itself costs a minimum of around $1,000, apart from recurring costs of around $5-$10/set per month. That being said, it makes great sense for businesses with 50+ employees to install IP PBX systems since the monthly fees are relatively lesser than other kinds of PBX phone systems.

  • Hosted PBX
    A newer PBX phones systems technology, a hosted PBX system also employs digital VoIP phone signals. Unlike an IP PBX system, however, a hosted PBX system is cloud based, thus not requiring the installation or purchase of a physical PBX hardware box. As an alternative, users can manage PBX features such as voicemail, auto attendant, and call transfers and routing from their smartphone or internet browser. Hosted PBX systems offer the same portability IP PBX systems, with far-flung, remote employees being able to connect and attend calls as if they were physically present in the same office. The system also allows on-the-go employees to make calls from their smartphones using their business number. The hosted PBX works well because there’s no hardware to install and purchase, so the initial costs are as low as around $150/seat, with recurring costs of around $45/seat as a monthly subscription fee. What’s more, the setup process is extremely easy. These are the reasons that make a hosted PBX the most cost-effective choice for small businesses.
  • Virtual PBX
    A lighter version of the hosted PBX is a virtual PBX, which works in the same way but usually offers fewer features. For instance, they might be able to receive and route calls but not be able to actually provide a phone service. Virtual PBX systems are good for businesses with 1-4 employees and is a good affordable and quick professional phone system option with an immediate setup. However, it is expensive in the long run.

With over 200 years of combined industry experience, our Editorial Team at Top10Ratings is a diverse group of expert reviewers, product analysts, and content experts. They come from backgrounds in renowned product testing labs, acclaimed review platforms, and leading market research firms. Together, they ensure that every review, ranking, and insight offered on Top10Ratings is comprehensive, expert-driven, and trustworthy. Their dedication to authenticity and clarity guarantees that our readers always receive reliable and actionable advice.

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