PBX: A comprehensive guide

What is a PBX? How does a PBX phone system work? And what are the best phones and providers available? Read our comprehensive guide to find out more…

Our research

To recommend the best phone systems for small businesses, our team of expert writers and researchers hone in on the most important factors. We rate providers on value for money – including initial setup costs, any equipment costs, and ongoing service fees; an ability to scale as your team grows; depth of features, plus the help and support options that are available.
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Whether for internal calls between colleagues using the same office phone line system or external calls with clients and customers, clear communication is vital for business success. A phone system will connect your business with the outside world. But the best phone technology will help you work more productively, make more calls, and save money.

With a private branch exchange (PBX) phone system, you can manage internal communications, improve customer conversations, and cut your costs at the same time.

Here we explain everything you need to know about PBX phones, what they could do for your small business, as well as profile some of the top providers and phones available.

But what is the best PBX system for your business? There are a number of major providers of services and phone systems out there – and no one provider or phone is the outright best, as it all depends on what your business requirements are.

In this article, we’ll cover:


What is a PBX phone system?

PBX meaning

PBX stands for Private Branch Exchange. This just means your phone server – the system used to switch between calls.

What is a PBX server?

A PBX server is what the phones in an IP PBX are connected to and what allows the phone system to work.

A private branch exchange (PBX) phone system helps you to streamline internal and external communications in your business.

There are two types:

  • Hosted PBX – this is where a provider hosts the PBX at their location, offering you access via the cloud
  • IP-PBX – this is hosted at your premises, meaning higher set up costs, but it can be cheaper overall

PBX phone systems are ideal for small businesses because they let you call your colleagues for free, add more phones without drilling new phone lines, and tap into features like transfers, voicemail and call recording.

This is a business-grade phone system that connects all the phones in an organisation, whether in the same office or across multiple locations.

PBX phone systems are designed to handle the large volume of phone lines, calls, and numbers that flow in and out of your business.

They include features that make them uniquely situated to the daily operations of a business.

How do PBX phones work?

A PBX lets callers communicate internally (within your small business) or externally (with the outside world). That’s because it links up your office phones with the public telephone network, VoIP (Voice over Internet Protocol) companies and SIP (Session Initiation Protocol) Trunks.

If this is starting to sound complicated, this diagram breaks down how it’s all connected in an IP (internet-based) PBX system:

pbx phones iconograph

In the pre-internet days, phones were analog, meaning they ran on physical wires. But today’s PBX telephone systems are digital. That way, a computer manages the calls, auto-connecting lines based on dialed numbers.

Generally, your PBX system will be hooked up to internal telephone lines connecting all your office phones, plus outside lines that lead all the way to your PBX provider. Usually, you just dial 9 to reach a number outside your network.

When selecting a PBX phone system, users have two options:

  • Traditional PBX
  • IP PBX

Traditional PBX systems have their own phones, so users are bound to a particular provider. Switching your PBX supplier might mean replacing all your phones – and big costs. You’re also often tied to a limited number of outside phone lines and internal handsets.

But with an IP PBX system, phone calls run over the internet, and give you much more flexibility. That’s why we tend to recommend IP PBXs to small business owners.

What are the main features of PBX?

The best PBX systems come with a range of features – such as virtual receptionists, call transfer, and conference calling – that can give your business a professional image, regardless of its size.

They can also give you greater control over communications, cost less to operate than a traditional phone system, and help make your business look credible to potential customers.

The below is not an exhaustive list, but covers the main features you can expect to find with a PBX phone system:

  • A virtual receptionist – also called an auto attendant, these are the pre-recorded voices that can greet the caller and provide them with a number of options. This removes the need to pay for a real receptionist, allows for efficient call routing, can greet customers out of business hours, and is entirely customisable
  • Call transfer – transfers a call in progress to another destination, such as the next available person or a specific/relevant department
  • Automatic call forwarding – automatically directs calls to another destination when there is no answer
  • A dial-by-extension directory – allows you to create a customisable menu of departments, options, or people with a corresponding number, so the caller can be directed to the most relevant place
  • Call recording – can be very important for quality control training. PBX allows you to record multiple phone lines at once
  • Call logs – help your agents be more productive. They can see a full list of missed, inbound and outbound calls, including caller ID, time and date. Agents just need to click to call back
  • Hold music – can enhance the waiting caller’s experience, differentiate you from other businesses, and build brand awareness and loyalty
  • Call waiting – allows you to suspend one call while in progress and accept another call. You can then switch between calls depending on which needs to be prioritised
  • Conference calling – allows you to have important meetings between internal and external people over the phone. People can join in and drop out when necessary
  • Call screening – evaluates the characteristics of a call before you answer by checking caller ID. This enables you to block nuisance calls, and screen other calls without causing offence
  • Voicemail to email – saves voicemails left at your company phone number as easily retrievable MP3 files, notifying you automatically

Types of PBX phone systems

In this section we take a closer look at the three different types of PBX phone systems.


You might see VoIP PBX called just IP PBX. It’s the same thing – the “IP” stands for “Internet Protocol”, and just means a set-up where phone calls work through your internet connection.

Who is VoIP PBX best for?

Due to its affordability and flexibility, a VoIP PBX is ideal for small businesses with minimal phone system requirements and those that are looking for a cost-effective communications solution.

What are the advantages?

The main benefits are the reduced costs and added flexibility. You cut costs because you can use a single network for all your calls and data – your phones just connect to the same server as your computers. And it’s more flexible, since you can easily link up more phones or switch suppliers.

Virtual PBX

Virtual PBX phone systems are sometimes called a hosted PBX. As you would expect, this means rather than you as the business owner setting up your own exchange, you simply give that responsibility to another company.

Who is a virtual PBX best for?

This option is perfect for small businesses with no in-house tech support, and it makes it easy to add as many phone lines as you need.

What are the advantages?

As a virtual PBX is hosted by another company, this allows you to focus on running your own business. Plus, should you need to increase your startup’s phone calling capacity, you can easily install additional phone lines.

Cloud or hosted PBX

VoIP PBX phones are hosted in the cloud (servers in the internet like Apple’s iCloud). With hosted or cloud PBX systems, the provider is responsible for handling the IP-PBX and the technology necessary to make it work at its location.

The provider then charges your business a monthly fee, which usually comprises a minutes package and certain extra features.

Adding additional IP phones requires extra costs and additional programming time on your side, but:

  • Phone systems can be moved easily
  • Hosted PBX has a lower initial cost to set up
  • There are no maintenance costs

Who is a cloud or hosted PBX best for?

With the ability to make and receive calls from different locations, a cloud or hosted PBX phone system is best for remote companies or those that conduct business on-the-go.

What are the advantages?

The main benefit of a cloud or hosted PBX system is that you can save a fortune on hardware and repairs throughout the years.

You also have the freedom of hooking your desk phone number up to your computer and mobile, so you can take calls from wherever works best for you.

Why use a PBX phone system?

A PBX system offers many advantages that can help small businesses deliver a great level of service to customers and keep conversation flowing around the organisation.

If you’re still relying on a single copper telephone line, then it’s high time you considered upgrading.

Here’s why:

  • Cost effective – both types of PBX are more cost-effective options for small businesses, without the need for expensive hardware and maintenance
  • Feature-rich – PBX systems offer a range of features that help you to manage the large volume of calls a modern organisation can expect (explored below)
  • Professionalism – no matter what the size of your business is, a PBX phone system gives your customers the impression that you’re a large, credible organisation. This encourages those who may have reservations about dealing with a smaller operation
  • It’s scalable – hosted PBX systems in particular offer flexible plans, and the ability to add more extensions and features at will

Who is PBX suitable for?

Although PBX can offer varying types and sizes of businesses a range of benefits, the following business scenarios are likely to find PBX suitable.

  • International calls – as a PBX can be hosted using the internet, this means that many packages and rates for calling internationally can offer significant savings compared to the cost of overseas calls using a traditional phone system
  • Scalable systems – as phone lines can be added or removed easily and quickly thanks to their virtual nature, PBX offers an ideal solution for seasonal businesses or other types of startups that experience demands at certain times of year
  • Limited tech resources – if your business doesn’t have in-house tech support, hosted PBX systems often come with installation and tech assistance

It’s also suitable for businesses that need to make a high volume of calls, such as call centres and other telemarketing companies.

Top things to know before selecting your PBX providers

With so many different providers out there, it can be difficult to know how to make a decision. Here, we profile some of the main aspects to consider when choosing a PBX provider.

  • Features – while a particular provider may offer multiple features or have excellent online reviews, for example, be sure to examine what they offer and how well the features match your business’ needs
  • Equipment – if you have existing phone systems equipment, consider if it can be connected to a provider’s PBX offering, or if you’ll require all-new kit
  • Support – check what (if any) support is provided, as well as how and when it can be accessed
  • Contract – be sure to review the terms and conditions of the provider’s service contract, including what is and isn’t included in the monthly price

Who are the best PBX providers?

Choosing a PBX provider can be difficult: you’ve got to consider how a system will integrate, how much it’ll cost and if the provider is reputable, and more. Take a look at some of the best PBX providers in the table below.

At-a-glance comparison

ProviderBest forPrice range
RingCentralApp integrations£7.99 to £24.99 monthly per user
8×8Speedy deploymentContact for pricing
MitelGrowing business£13.59 – £23.79 starting price per user per month
VonageReliability£9 to £16 per user per month
Jive VoiceCost$19.95-$29.95 for 1-99 users. Custom pricing for 100+ users

To compare quotes for telephone systems, simply complete the form at the top of the page.


RingCentral – Best for app integrations

RingCentral is a widely used business phone system, with hundreds of thousands of users around the world.

Its cloud-based PBX system offers vital features such as call management and collaboration at an affordable price.

RingCentral integrates with over 100 popular business apps, helping you save time switching between applications and maximise productivity.

Cost: £7.99 to £24.99 monthly per user

  1. Intelligent collaboration tools
  2. Hundreds of app integrations
  3. Works across your devices
  4. Can expand your systems easily
  1. Setting up features can be difficult
  2. Occasionally drops calls


8×8 – Best for speedy deployment

8×8 has more than one million business users around the world and customers in the UK and Europe including Empire Cinemas and Regus.

You can easily add people and locations into your phone system, as well as integrate with other business applications.

Real time analytics enable you to make decisions in the heat of the moment.

Quick to deploy and easy to set up, this is a great option for businesses that need to get their system in place as soon as possible.

Contact for pricing

  1. Available on any device
  2. Quick to deploy and scale
  3. Enterprise app integrations
  4. Easy to set up
  1. Customer service is lacking
  2. Sound quality is occasionally poor


Mitel – Best for growing business

Mitel’s PBX offering encompasses cloud, on-site, and hybrid business phone systems.

It understands that different businesses have different needs, giving you the option to switch between different deployment models at will – “because one size never really fits all”.
That’s what makes Mitel the best option for growing businesses.

Cost: £13.59 – £23.79 starting price per user per month

  1. Easy to maintain
  2. Broad range of options
  3. Good quality audio
  4. Easy set-up and installation
  1. Customer support is poor
  2. Could have more features


Vonage – Best for reliability

Vonage is a cloud-based PBX system that gives your business high-quality, reliable voice and data over the internet.

It integrates with a variety of other business apps, and provides access to over 40 business critical features.

Managed for you in the cloud, this hosted PBX is a reliable option for growing businesses, and there’s no on-site equipment or installation necessary.

Cost: £9 to £16 per user per month

  1. Good customer service
  2. Over 40 features available
  3. Easy to set up and use
  4. System management handled virtually
  1. Relatively expensive


Jive Voice – Best for cost

Jive Voice offers a suite of features, including unlimited auto attendants, as well as voicemail and voicemail-to-email.

Jive offers an affordable and transparent pricing structure. You can sign up for a no obligation month-to-month account.
Cost: $19.95-$29.95 for 1-99 users. Custom pricing for 100+ users

  1. Over 80 voice features included
  2. No extra charges for additional features
  3. Simple pricing structure
  4. Ability to create unique call flows
  1. Reporting system could be improved
  2. Customer support needs work

Top things to know before selecting your PBX phone

As the phones you use will be a central part of your business’ phone system, it’s important to make the right choice. And how do you do that, exactly?

In this section, we outline some of the key factors to consider when assessing which device is the best PBX phone for your startup.

  • Standard features – the ability to display caller ID as well as transfer and hold calls, among others, are some of the most common features in a phone system, so ensure that the phone offers these
  • Additional functions – along with the above, there may be extra capabilities that you require, such as a video call or touch screen function, so assess which ones each phone offers and how it meets your business requirements
  • Design – wired or cordless, colour or monochrome display, single phone or a set – these are some of the factors to think about when selecting a specific type of phone design
  • Scalability – how easy is it to connect the phone to other devices, as and when you may need to?
  • Integration – can the phone be integrated with other aspects of your business’ communication system?

What are the best PBX phones?

Finding the best PBX phones for your business depends on a number of factors, including the particular features that you’re looking for, as well as your business’ specific needs. In the table below, we compare some of the best PBX phones.

PhoneBest forPrice range
Avaya 1616 IPBest for early-stage startups£29.98 refurbished
BT Converse 2300Best for practical small businesses£59.99
Panasonic Kx-TGF320EBest for busy small businesses£69.99
Gigaset DE410 Pro IPBest for efficient small businesses£127.34 used
Cisco SPA525G2Best for smart small businesses£230.66

To compare quotes for telephone systems, answer the questions in the form at the top of the page.

avaya 1616 IP

Avaya 1616 IP – Best for early-stage startups

This simple and affordable phone is designed for businesses that spend the majority of the day on the phone.

It features:

  • Support for wired and wireless headsets
  • Two way speakers
  • Backlit display
  • Support for multiple call appearances

It may be down the lower end of the price spectrum, but this phone doesn’t skimp on features. This makes it a great option for early-stage startups.
Cost: £29.98 refurbished

  1. Minimal set-up required
  2. Simple but effective
  3. Headset support
  4. Good value
  1. Sold without power supply

bt converse 2300

BT Converse 2300 – Best for practical small businesses

The BT Converse 2300 may be light on features, but this corded phone is a good, solid option if you need to be up and running quickly.

It features:

  • A 100 name-and-number directory
  • Hands-free option
  • Backlit LCD
  • Caller ID

If you run a practical small business, the ease of use and efficiency of this phone make it a great option.

Cost: £59.99

  1. Easy to use
  2. One year manufacturer’s warranty
  3. Large name and number storage
  4. Hands-free option
  1. No backlight on display
  2. Limited features

panasonic kx-tgf320e

Panasonic Kx-TGF320E – Best for busy small businesses

This combination phone includes a corded desk phone and cordless handset for maximum flexibility.

It features:

  • Three one-touch dialing buttons
  • Nuisance call blocker
  • 3.4-inch white tiltable display on main unit
  • 100 number phonebook
  • Speakerphone

With its nuisance call blocker and flexible options, this phone is a great choice for busy businesses.

Cost: £69.99

  1. Blocks nuisance calls
  2. Easy to use
  3. Corded and cordless for flexibility
  4. Clear display and sound
  1. Range of cordless phone could be improved
  2. No headset option

gigaset de410 pro ip

Gigaset DE410 Pro IP – Best for efficient small businesses

A feature-rich phone with an adjustable 5-line display, this Gigaset phone has high-quality wideband audio.

It features:

  • Headset connection
  • 200 number phonebook
  • Energy saving features
  • Access to public online directory
  • Upgradeable firmware

With energy saving features and a wealth of other perks, this phone is perfect for small businesses that want to work efficiently.
Cost: £127.34 used

  1. Energy saving eco features
  2. 200 number phonebook
  3. Intuitive user interface
  4. Hearing aid compatible
  1. Expensive

cisco spa525g2

Cisco SPA525G2 – Best for smart small businesses

It features:

  • Wideband audio
  • Option to view video feeds
  • Headset support
  • Bluetooth-enhanced integration with mobile phones
  • Ability to add additional consoles

With countless features, high-quality audio, and support for additional consoles, this phone is great for growing businesses that need to look smart and professional.
Cost: £230.66

  1. Excellent voice quality
  2. Video feeds
  3. Bluetooth support
  1. Some have complained of random reboots
  2. Power supply doesn’t come with phone

How much does a PBX phone system cost?

In this section, we’ll provide an approximate guide to how much you can expect a PBX phone system to cost overall, based on the figures above.

FeaturePrice range
Provider package£8-£25+ per user per month

Next steps

From reading this article, you’ve learned more about what PBX is, including how it works and its main features. We’ve also provided a guide to the best PBX providers and phones available, plus tips on how to make your selection.

For more detailed information that’s based upon your startup’s requirements exactly, fill in the form at the top of the page to compare quotes for telephone systems now.

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