Phones have gotten complicated—technical with convoluted pricing structures. Let me try to clear this up with some practical experience.
There are two type of phones: Standard and VOIP.
Standard phone systems or analog is the old wire systems that have worked for decades and continue to work today. Normally you would go to your local phone company to get a line connected. Today you usually have to pay someone to connect a physical line to your office if it is not connected already.
VOIP are “new” phones. VOIP stands for Voice-Over Internet Protocol. As the name implies, your communication is via the internet. What is great about VOIP is that the “phone server” can be in your office or at a remote site. If you are hosting a VOIP server, you should be a larger office, otherwise you will want a hosted service. But the one item to remember is that your voice is going through the same internet line your browser is going through. So now you have your browser, email and voice going though the same line. You will have disruptions if you do not have the system setup correctly.
So what should you use: the standard line or VOIP? Many advisers think they can save some money by only using the internet line for everything. But before you do, ask yourself how many times your internet goes down, is slow or something else happens in a week. If you are a small office with fewer than five people and the phone is important to you, stick to the standard line. You may have to get a small box so you can share the lines, but once it is installed there are very few problems with it.
Many wonder whether there aren’t more feature on a VOIP system. Yes, but with a small office those features are not worth the headache. One method I have had smaller office utilize to save costs is to get four lines, with callout ability only on two. With an unlimited plan, which is normally a fixed number, on the two lines the adviser can manage phone expenses easily.
If you are a larger office that wants a VOIP system, I would suggest getting a T1 or T3 line specifically made for commercial use. With commercial lines, you get the dependability you need. If you get the standard cable internet or fiber, you do not have the same level of service. Along with the lines, you will probably need better routers, phones, etc. Although the cost per minute may seem inexpensive, the total cost can be high.
Ash Bhatnagar, CFP®
RIA Independence Co.