A virtual phone service follows the principles of cloud computing systems, with virtualized services provided over the Internet. All the equipment and software required to operate it is kept at the service supplier's site. Users sign up for the service and are given a new local or toll-free number, depending on their preference. They're also given an Internet login they can use to manage functions such as assigning extensions from that phone number to employees, scheduling which phone to ring at what time, and setting up the auto-attendant message. Calls come in and go out over existing phone lines, using phone equipment the agency already owns, delivering enhanced phone capabilities with minimal investment: the only cost is for the service itself, which is generally well under $100 per month.

Virtual phone systems are not just replacements for traditional business phone systems. They're actually superior in many ways. With an equipment-based phone system, only employees who work in the building where the equipment is housed can be assigned an extension. Virtual phone systems have no such limitations. You can assign extensions to anyone, anywhere in the world, allowing you to use a single phone number as the starting point to contact every agent and your entire support staff, whether they're onsite or working remotely.

The same applies to voice mail. Traditional phone systems only work for employees in the building. But virtual phone systems work for everyone in the agency, regardless of location, since they are recorded and stored at the hosting company.