7 Easy Steps to Set Up a VoIP Phone System at Home or the Office

Updated Dec 6, 2022.
how-to-set-up-voip

VoIP phone systems offer several advantages over the traditional analogue phone systems. With a VoIP phone system, you get to significantly reduce your monthly phone bills, the ability to integrate your phone system with your CRM tools, as well as access a ton of advanced features.

Despite these advantages, a lot of people hold off from adopting a VoIP phone system for their home or office because they think VoIP phone systems are either costly or challenging to set up.

In this guide, we’ll share with you how you can quickly set up a VoIP phone system for your home or office in just 7 easy steps. Before that, however, let’s understand how a VoIP phone system differs from an analogue phone system.

How Is A VoIP Phone System Different?

When you make a phone call using an analogue phone system, your voice is converted into analogue electrical signals, which are then transmitted through the Public Switched Telephone Network (PSTN) to the recipient’s landline.

When using VoIP caller, your voice is converted into digital data packets that can be sent over the internet. The data packets are sent from your VoIP phone to a VoIP server, which in turn connects to the PSTN. 

Here’s an image showing how the two different systems work. 

Analog Phone System vs. VoIP Phone System
Source: Yeastar

Since A VoIP phone system works over the internet, it gives you access to advanced features that are not available on analogue phone systems, such as the ability to manage your phone system online, cloud-based data storage, ability to receive voicemails as emails, multimedia support, video conferencing, and so on.

VoIP phone systems also offer greater geographic flexibility compared to analogue phone systems. 

For instance, if you want to add new phone numbers in a new branch, you can easily add a new phone number in your VoIP online dashboard. With an analogue system, you’d need to get new costly equipment and wiring.

Now that you understand how a VoIP phone system works, let’s go through the step by step process of setting up such a system for your home or office.

1. Test Your Network And Internet Connection

Since VoIP phone systems transmit information over the internet, the quality and strength of your network and internet connection will affect the quality of your VoIP phone system, as well as the number of lines you can run on your system.

While most internet plans have enough bandwidth to support a VoIP phone system, we still recommend testing your connection to make sure it is fast enough before investing in a VoIP phone system. 

You can easily test the quality and speed of your internet connection using the Nextiva VoIP speed test or the Fit Small Business VoIP Speed Test.

The most important metric to check when testing your internet connection is the upload speed. This measures how much data your connection allows you to upload or send over the internet.

The most basic VoIP system will work on a connection with a minimum of 100 Kbps. However, higher upload speeds will support more phone lines and higher call quality.

The image below shows the maximum number of VoIP phone lines your internet connection can support based on your upload speed, as well as the recommended number of lines for the best call quality.

VoIP speed test results
Source: Fit Small Business

Other metrics that affect the call quality of your VoIP phone system are download speed, ping, and jitter. Generally, you should aim for download speeds of about 0.5 Mbps for every single VoIP call, a ping of less than 60 milliseconds, and jitter results of less than 30 milliseconds.

If your connection is slow, you will need to switch to a high speed internet provider before switching to a VoIP phone system. 

2. Invest In The Right VoIP Hardware

Once you’ve confirmed that you have an internet connection with sufficient bandwidth or upgraded to one that can support a VoIP phone system, the next step is to purchase the necessary hardware.

First, you need the phone equipment that you’re going to use to make and receive calls. Here, you have several options.

  • Your old desktop phones: If you already had an analogue phone system installed, you can still use your old desktop phones with your new VoIP system. To do this, you’ll need to invest in Analogue Telephone Adapters (ATA). This is a small device that converts the analogue signal from your analogue phone equipment into digital data packets that can be transmitted over the internet. While this option keeps costs down, it might limit your access to some VoIP features.
  • VoIP desk phones: These are desktop handsets that are made specifically to be used with a VoIP phone system. These range from the very basic that resemble analogue phones, to advanced units that come with digital screens and a ton of features. VoIP desk phones are recommended if you’re looking for very high call quality.
  • VoIP headsets: If you are looking for hands free VoIP hardware that allows your staff to do something like looking up customer information on a CRM or working on something while they are still on phone, VoIP headsets are your best option. These are particularly popular for customer service departments.
  • Softphones: These are not actual phones, but software programs and apps that run on a computer, tablet, or smartphone. Softphones are a great choice when you want to keep costs low (you don’t have to purchase multiple handsets), or when you want to give your staff the flexibility of using your VoIP phone system on the go.

Aside from the phone equipment, you need some other pieces of hardware, including…

  • Router: For home setups and very small offices, a router is not an absolute necessity. However, for bigger offices with more than a handful of staff, having a router that is both fast and secure is very important. You can save costs by using the same router provided to you by your internet service provider.
  • PBX Server: For easy management of internal calls, you might also need access to a private brand exchange (PBX) server. This is a dedicated computer that runs the server software required to act as a PBX. However, many VoIP service providers will often give you a hosted PBX server as part of their VoIP package, meaning you don’t have to invest in your own PBX server.

3. Find A VoIP Provider With The Right Features

To start using a VoIP phone system, you’ll need to choose a VoIP provider, the same way you need an internet service provider in order to use the internet at the office.

When choosing a VoIP provider, you have to think about your needs, as well as the features offered by the provider. Some of the features you should look out for when choosing a VoIP provider include…

  • The maximum number of calls that can be handled simultaneously
  • Advanced call routing
  • Interactive Auto attendants to welcome customers and direct them to the right department
  • Video conferencing capabilities
  • Team messaging capabilities
  • Document sharing functionalities
  • Call analytics
  • Ability to integrate with third party applications
  • Built-in CRM functionalities
  • Voicemail to text and voicemail to email functionalities

Another important thing to think about when choosing a VoIP provider is your budget. An extra $5 per user per month can quickly compound into a significant expense at the end of the year. Having a budget prevents you from going for attractive but costly features that you don’t really need.

There are several VoIP providers in the market, and evaluating them all can be quite a challenge. Fortunately, we did the evaluation and narrowed down the options for you. Below are 6 of the best VoIP providers for you to choose from…

  • RingCentral: This is the best overall VoIP service provider for anyone looking for a powerful yet affordable VoIP service. RingCentral is amazingly easy to use, and gives you unlimited domestic calling, an automated voice attendant to handle incoming calls, video conferencing, as well as integrations with popular CRM tools. RingCentral is also compatible with other popular business tools like Salesforce and Google Workspace.
  • Nextiva: Nextiva is a great VoIP provider for small businesses looking for a combination of great CRM tools, collaboration, and great communication. Nextiva comes both as a desktop app and a mobile app that is available on Android and iOS. This VoIP provider gives you access to professionally recorded voice greetings, visual voicemail, detailed call analytics, integration with third party apps, and ability to convert an analogue phone system to VoIP.
  • 8×8: This is a great VoIP system for small businesses looking for a reliable VoIP service on an affordable budget, and those doing business in multiple countries. 8×8 allows you to make unlimited calls to 47 different countries, in addition to integration capabilities, HD video conferencing, unlimited free SMS within the USA and Canada, free calls to other 8×8 users, and detailed, actionable insights from call and messaging data.
  • Vonage: This is a cloud-based VoIP platform that is best suited for small businesses with low internet connectivity. Vonage supports video conferencing for up to 100 people, multiple extensions, call recording and playback, call screening, and a high level of customization. The best thing about Vonage is that it allows you to add individual features to your VoIP phone system, rather than having everything bundled together.
  • Phone.com: This VoIP provider is best suited for businesses with low call volumes, since it allows you to buy limited plans, which are cheaper than the unlimited plans offered by other VoIP providers. Phone.com gives you access to voice, text, video calls, video conferencing and fax capabilities. You can also integrate it with your CRM and set advanced call handling rules.
  • Ooma: Ooma is a great choice for businesses looking for a VoIP service that is highly scalable. With Ooma, you get unlimited calls, voicemail, an automated virtual receptionist, a simple pricing structure, call recording and playback, video conferencing, SMS and MMS capabilities, as well as voicemail to email capabilities.

4. How To Get A Business Phone Number

Once you’ve chosen the most suitable VoIP provider for your needs, the next step is to get a VoIP business number. While the process will usually differ depending on your chosen VoIP provider, most providers will generally give you the following four options for getting a VoIP business number…

Porting Your Current Phone Number

If you already have an existing phone number, the easiest option is to port over the number to your new VoIP phone system. When porting an existing number to VoIP, you can still use the same number even when you’re moving to a new location.

The greatest advantage of porting your existing number is that you don’t have to worry about your customers not knowing your new number, or having to update a new number on your website, marketing material, business cards, and so on.

Local Phone Numbers

If your business serves a specific geographic region, getting a local number is a great idea, since your customers won’t have to pay long-distance charges when calling your business.

One thing we love about local VoIP phone numbers is the fact that you do not have to restrict yourself to a specific geographical location. 

For instance, if your business is located in Florida, but you have a market in Nevada, you can get a local VoIP phone number for Nevada, without the need to have a physical presence there. All you need to do is choose a VoIP number with the area code for Nevada.

Toll-Free Phone Numbers

A VoIP phone system also allows you to have a special number that your customers can call for free. You can easily get a toll-free number at very low costs.

This is a great option for businesses that handle lots of customer support calls, and is a good way of making your business appear professional and trustworthy. Just like local VoIP numbers, toll-free numbers are not restricted to a specific location. 

Vanity Numbers

Vanity phone numbers are custom, toll-free numbers that either use a combination of repeated numbers or that spell a name, making them very easy to remember. Examples of vanity numbers include 1-800-TAXICAB and 1-800-555-5555.

5. Set Up Your VoIP Phone System

You already have the necessary hardware, a reliable VoIP provider that is a good fit for your needs, and your desired business phone number. Now it’s time to bring everything together and set up your VoIP phone system.

The set up process will depend on your chosen VoIP provider and the kind of VoIP service they offer. 

If you opted for a software VoIP phone system, you don’t have to worry about hooking up physical phones to your business network. All you need to do is to download the provider’s apps on your desktop or mobile device, configure a few settings, and your VoIP phone system will be up and running.

If you opted to use physical VoIP phones, the setup process is equally simple. If your desktop VoIP phone has Power Over Ethernet (POE) capabilities, all you need to do is to connect the VoIP phone using an Ethernet cable to your router and internet switch. The Ethernet cable will provide the phone with both power and a connection to the internet.

If your VoIP handsets are not POE-enabled, you’ll need to connect the handset to the power outlet using an AC adapter, and then connect the handset to the router or network switch using an Ethernet cable.

Once you’ve hooked up your VoIP handsets to the internet, your VoIP provider will complete the setup and configuration process for you and provide you with an online dashboard that allows you to monitor and manage various aspects of your VoIP phone system.

If you need to install your own onsite private branch exchange (PBX), the process is equally simple. 

Any computer with a constant connection to the internet can be used as a PBX server, so all you need to do is to install your VoIP software on the computer that will act as a server, connect the PBX server to the router using an Ethernet cable, and connect your VoIP handsets to the same router.

Two things to keep in mind when setting up a PBX is that you have to assign the PBX server a static IP address so that your VoIP phones can always access it, and ensure that the PBX server connects to the network via a standard Network Interface Card.

Depending on your VoIP provider, you might also have to make some configuration changes to your router, such as enabling network address translation (NAT) or enabling universal plug and play.

Enabling NAT makes changes to your network address information and makes it possible for you to remap one IP address into another device, while enabling universal plug and play allows the PBX server to connect to your VoIP phones.

6. Test Your New VoIP Phones

You don’t want to have to deal with dropped calls, inaudible voices and lag while on calls with your customers, so before you make the switch to your new VoIP phone system, it is important to test it and ensure that everything is working as it should.

To test your new VoIP phones, have a few employees and a few outsiders try the new phone system and then give you their assessment about the quality of the calls. Some of the things you should be looking out for here include…

  • Audio quality: Are both parties (caller and recipient) able to hear everything clearly? Is there any static on the line? Did they experience any echoes or muffled voices? You want to make sure that the calls are as consistent and clear as possible.
  • Latency: This refers to the amount of time it takes for data packets to be transmitted from one end to the other. If there is latency on the line, you will notice a delay between when one person says something, and when the person on the other end of the line hears it. Ideally, you want to make sure that your VoIP phones have as little latency as possible. High latency can be attributed to a poor internet connection.
  • Connection stability: Check whether there are any cases of calls dropping, even temporarily, especially on longer calls. Dropped calls are something you want to avoid, since they will have a negative impact on customer experience.

When testing your new VoIP phone system, it is recommended that you do so when the network is busy. This will give you a better idea of the system’s performance at all times.

7. Train Your Staff To Get The Most Out Of VoIP Features

VoIP phone systems come with lots of advanced features that are not available on legacy phone systems. Features such as cloud call recording and playback, CRM integration, video calls and video conferencing, voicemail to text and voicemail to email, call analytics, document sharing capabilities, interactive voice responses, and so on.

These features can potentially lead to a significant increase in productivity and performance at the workplace. If your employees are not aware of such features and how to take advantage of them, however, such gains cannot be realized.

Therefore, to make sure that your staff takes full advantage of the awesome features that came with your new VoIP phone system, you have to take them through some training after you make the switch to VoIP.

Some of the things you should cover in training include…

  • VoIP phone hardware training: Some VoIP handsets are significantly different from analogue handsets, with extra buttons, touch screen interfaces, and so on. Training your staff on how to use the different functions on these VoIP handsets will allow a seamless transition to the new VoIP phone system with minimal disruptions.
  • Mobile app training: If your VoIP provider has a mobile app that allows employees to use their VoIP numbers on the go, you also need to train employees who spend time working remotely on how to use these apps.
  • CRM integration tools training: Most VoIP phone systems allow integration with various CRM tools. This makes it possible for your employees to quickly access client information and previous customer correspondence, which in turn makes it possible for them to provide clients with a higher quality of service. To be able to use these CRM integration tools properly, your staff need the right training.
  • End user software training: Your VoIP phone system will also come with an online dashboard from where you can manage various aspects of the system. You’ll need to train your staff on how to log into their dashboards, how to access their voicemails, how to playback recorded conversations, how to check call logs, and so on.

Once all your employees are conversant with the operation and features of the new VoIP phone system, you can then go ahead and make a complete switch to the new system and start enjoying the benefits that come with switching from an analogue to VoIP phone system.

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Anastasia Belyh

Editor at FounderJar

Anastasia has been a professional blogger and researcher since 2014. She loves to perform in-depth software reviews to help software buyers make informed decisions when choosing project management software, CRM tools, website builders, and everything around growing a startup business.

Anastasia worked in management consulting and tech startups, so she has lots of experience in helping professionals choosing the right business software.