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VoIP vs PBX: How to choose which business phone system is right for you

The choice between the best VoIP services or a PBX phone system can make a significant difference in the quality of your phone calls, the cost of your phone service, and your business's ability to scale in the future. In this guide, we'll explain the pros and cons of both VoIP vs PBX to help you decide which system is best for your business.

PBX is a traditional analog phone system that connects your business with a vendor or client over a physical phone line. VoIP, on the other hand, is a digital phone system that turns your call audio into packets of bytes and sends them to the caller on the other end of the line over the Internet.

There are stark differences between PBX and VoIP phone systems. To start, the devices that you can use each phone service with are often different. PBX phone systems require analog-compatible phones. In some cases, your phone provider may sell specific hardware that is required to use their service.

Since VoIP systems are digital, on the other hand, this type of phone service can be used with almost any digital device. You can purchase digital handsets for the office, or simply use your business's computers and tablets as phones.

Another important difference is that VoIP systems can interface with a wide variety of digital software platforms, while PBX systems cannot. With VoIP, it is straightforward to record calls automatically using software on your computer or to set up auto-transcription for calls and voicemails. VoIP systems can also interface with automation workflow software that enables you, for example, to route calls from inside your organization to one voicemail account and calls from outside your organization to another.

With a PBX phone system, your options for call routing, recording, and voicemail are limited to the features built into your handset.

Larger businesses may also appreciate that VoIP phone systems can be hosted internally. This is not the route that most organizations want to take, since self-hosting a phone system entails higher setup costs and ongoing maintenance. However, a self-hosted VoIP system can be fully customized to fit your business's needs and allows you to ditch third-party providers. With PBX, there's no way to self-host your business phone system.