voip and virtual phoneWhen it comes to selecting a phone service for your business, one decision you may have to make is whether VoIP or virtual phone is better for you. At first glance VoIP and virtual phone might seem similar, but they both serve somewhat different purposes. Before using any of these technologies, it’s important to know the difference between the two.

What is VoIP?

VoIP, or Voice over Internet Protocol, allows you to place and receive calls using the Internet. There are different types of VoIP that range from software (like Skype), which allows you place calls with your computer, to services (like Vonage) that function like a traditional landline and use your current phone. While home VoIP services are compatible with your analog phone, business VoIP services usually require you to purchase VoIP-optimized equipment.

What is virtual phone?

Virtual phone is a niche service that routes calls to a phone or device of your choosing. Essentially, what a virtual phone service does is assign you a virtual phone number and provide you options for fielding calls to and from that number. This means you can assign your business’ number to any phone you desire, including your smartphone, without having to give out your personal phone number; the customer simply calls your virtual phone number. The purpose of a virtual phone service is to help make entrepreneurs and small businesses — which might be working out of a home office — appear larger and more professional by providing them with a business voicemail, custom greetings, programmable telephone menus and more. Another benefit of a virtual phone service is you can set your business’ hours. If anyone calls your business number after your designated hours, they will be directed to your business’ voicemail — something that’s hosted by the virtual phone service.

How do the two differ?

The main difference between VoIP and virtual phone is the location of where you’re able to place and receive calls, as VoIP calls require one stationary device like a desk phone, while virtual phone calls can be routed to any number you choose. So if you’re looking for an actual phone service for your entire office, a virtual phone service is not an ideal option. On the other hand, if you’re someone who’s working from home or out meeting with clients or running errands most of the day, a virtual phone service is likely your best bet since you can have all calls directed to your cell phone.

Which VoIP and virtual phone services are best?

When it comes to selecting a VoIP or virtual phone service provider, it all depends on your needs as a business. Some of the top names for VoIP services, like Ring Central, Nextiva and BroadVoice, offer plans that you can customize to your business’ needs. Read our business VoIP reviews to learn more about these services and other options.

On the other hand, virtual phone services like Phone.com and eVoice offer complete packages that include numerous features to help you create image of a larger business. Check out our virtual phone reviews to find the best service for your small business.