How to Optimize VoIP Costs

: A No-Nonsense Guide

Want to slash your business phone bills? Here's the deal with VoIP:

Companies typically cut phone costs by 30-50%
International call savings can hit 90%
The VoIP market is exploding, set to reach $145.76 billion by 2024

But it's not just about saving cash. VoIP brings:

Cheap setup (often near $0)
Easy scaling
Tons of features (often free)
Work-from-anywhere flexibility

Ready to optimize your VoIP spend? Here's what you need to know:

Monthly fees range from $15-$35 per user
Bigger teams often get better rates
Pay annually for extra savings (up to 27% off)
Equipment costs vary (phones ~$150 each, or use existing devices)
International calls can be dirt cheap or even free with some plans

Key cost-cutting strategies:

Choose cloud-based systems for lower upfront costs
Use softphone apps instead of desk phones
Set up Quality of Service (QoS) for better call quality
Regularly audit user accounts and call data
Keep your system well-maintained to avoid costly issues

Bottom line: VoIP isn't just cheaper - it's smarter. By following these tips, you'll squeeze maximum value from your business communications.

VoIP Cost Basics

Let's dive into the main factors that affect your VoIP expenses. Understanding these can help you make smart choices for your business communication budget.

Monthly Fees and User Costs

VoIP providers usually charge per user, per month. The price can change a lot based on what features you get and how big your team is.

Most VoIP services cost between $15 and $35 per user each month. But here's the thing: if you have a bigger team, you might pay less per person. Take Nextiva, for example. They offer better deals for businesses with 20-99 users. Their basic plan starts at $25.95 per user monthly.

Want to save even more? Pay for a whole year upfront. Nextiva's basic plan drops to $18.95 per user when you do this. That's a 27% discount!

"Always look at what features come with each price tier. Sometimes, paying a bit more can actually save you money in the long run. You might get video calls and team tools included, so you don't have to buy them separately."

Equipment and Setup Costs

One of the best things about VoIP? You don't usually need to spend a ton upfront. But there are still some costs to think about:

VoIP phones cost about $150 each. So for a team of 20, that's around $3,000.
But here's some good news: you might not need new phones at all. Many VoIP systems let you use your computers or smartphones instead.
Setup is often free with hosted VoIP. But if you want an on-site system, it could cost you over $10,000 for equipment and installation.

International Call Costs

If your business calls overseas a lot, pay attention to this part:

Some providers include free calls to multiple countries. 8x8, for instance, offers free calls to up to 48 countries in their plans, starting at $24 per user monthly.
When calls aren't included, rates can vary a lot. Vonage charges as little as $0.02 per minute to the UK, while others might charge up to $0.75 per minute for some places.

If you make a lot of international calls, look for providers with good global rates or plans that include international minutes.

How to Pick the Right VoIP Provider

Picking a VoIP provider can make or break your business communication. Let's look at what really matters when making this choice.

Features and Price Comparison

It's all about getting what you need without overpaying. Here's the scoop:

Must-Have Features: Most VoIP services offer the basics like call forwarding and voicemail-to-email. But how well do they work? That's the real question.

Fancy Stuff: Need video calls or CRM integration? Some providers offer these. Make sure you're not paying for bells and whistles you'll never use.

What It'll Cost You: Most small businesses pay around $20 per user each month. But prices can vary:

RingCentral: $24.99/user/month for their Standard plan
GoToConnect: $19.95/month for all voice features
Nextiva: $25.95/user/month, or $18.95 if you pay yearly

"The best VoIP system? It's the one your team will actually use." - PCMag Editors

Don't just go for the cheapest option. Think about what you're getting for your money.

Hidden Costs and System Connections

Watch out for these sneaky extras:

Extra Fees: Some providers tack on regulatory fees. Nextiva, for example, charges $3.25 per line for "Regulatory Recovery" and $1.00 for Enhanced 911.

Phone Costs: You might need to buy new phones. Some providers offer deals if you sign a long contract.

Linking to Other Tools: Want your VoIP to talk to your CRM? That might cost extra.

Always ask for a full breakdown of costs. Here's a real-world example:

Provider	Base Price	Extra Fees	Total Monthly
RingCentral	$452.83	$178.06	$630.89
Vonage	$1,781.00	$523.69	$2,304.69

Big difference, right? That's why you need to look at the whole picture.

BizBot: Your VoIP Selection Helper

BizBot (https://bizbot.com) can make choosing and managing your VoIP easier:

Keep Tabs on Subscriptions: BizBot helps you track what you're spending on VoIP.

Compare Options: Use BizBot to see how different VoIP providers stack up.

Save Money: BizBot can help you spot ways to cut costs on your VoIP service.

Technical Ways to Cut Costs

Let's talk about how to optimize your VoIP costs through some smart technical tweaks. We'll focus on two key areas: setting up QoS and managing internet speed.

Setting Up QoS

Quality of Service (QoS) is like a VIP pass for your voice calls. It tells your network, "These packets are important - handle with care!"

Here's the lowdown on setting it up:

1. Prioritize voice traffic

Tell your router to roll out the red carpet for VoIP data. Set these UDP ports as high priority:

UDP/5060
UDP/6060
UDP/16384 to 32768

2. Turn on auto QoS

Many modern switches have this feature. It's like having a traffic cop for your data.

3. Enable QoS on devices

Don't forget your phones and PBX. When they flag traffic as important, your network knows to fast-track it.

As one Spiceworks user puts it: "Pretty much just turn it on and select basic (strict) QoS on all switches. That will make the switches honor QoS."

By setting up QoS, you're not just boosting call quality. You might also save money by avoiding unnecessary bandwidth upgrades.

Managing Internet Speed

Your VoIP system is only as good as your internet connection. Here's how to make sure you're not overpaying or underperforming:

1. Know your needs

A single VoIP call typically needs about 100 Kbps of bandwidth. But don't just multiply that by your user count. Use this rule of thumb instead:

Number of Concurrent Calls	Minimum Bandwidth	Ideal Bandwidth
1-3	300 Kbps	3 Mbps
5	500 Kbps	5 Mbps
10	1 Mbps	5-10 Mbps

2. Test your speed

Use a tool like speedtest.net to check your actual throughput. Remember, VoIP will be sharing bandwidth with other internet activities.

3. Plan for growth

Add a 5x to 10x safety margin when estimating bandwidth. It's better to have a bit extra than to scramble when you hit your limit.

4. Consider your activities

Video calls are bandwidth hogs - about 5 Mbps per attendee. If your team loves video chats, factor that in.

Track and Control Usage

Want to get the most out of your VoIP system while keeping costs in check? Let's look at some practical ways to keep tabs on your usage.

User Account Management

Here's how to match user accounts with actual needs:

Audit accounts regularly: Check your active accounts every few months. You might be paying for accounts nobody uses.
Set up tiered access: Not everyone needs all the bells and whistles. Only give international calling to those who actually need it.
Use built-in analytics: Many VoIP platforms offer this. Nextiva, for example, shows real-time and historical data on how extensions are used and what types of calls are made.

"Keep an eye on international calls per month. Watch for any sudden spikes to save on your VoIP bill." - Tech Report

Managing accounts actively can really cut costs. One company found 50 unused extensions and saved over $1,000 a month by cutting them!

Check Call Data

Call Detail Records (CDRs) are great for optimizing costs. Here's how to use them:

Review CDRs monthly: Set a reminder to check your CDRs at the start of each month. Look for:
- Calls that last longer than usual
- Unexpected calls to other countries
- Sudden jumps in data use
Use business intelligence: For bigger companies, think about connecting CDRs with BI software. This makes monitoring automatic and can flag weird stuff right away.
Try VoIP monitoring tools: Tools like SolarWinds VoIP and Network Quality Manager (VNQM) can give you deeper insights. They track things like Mean Opinion Score (MOS), packet loss, and jitter.

Gary Lee from Fairway Independent Mortgage Corporation says:

"Before we got this SolarWinds module, we were often in the dark when people complained about bad voice quality. Now we can stop problems before they get worse and fix them faster when we miss them."

Ways to Lower Costs

Let's talk about how to cut your VoIP expenses. We'll focus on two big money-savers: picking between cloud and local systems, and using phone apps instead of hardware.

Cloud or Local System

Your choice here can make a huge difference to your wallet. Here's the scoop:

Cloud-based VoIP: It's cheaper upfront and you know what you'll pay each month. RingCentral says businesses can save over 60% in the first two years by switching to cloud PBX. Check out these numbers:

Cost Type	Cloud-Based PBX	On-Premise PBX
Upfront Costs	$0	$6,495
Total Cost in Year 1	$9,180	$31,691
Total Cost in Year 2	$7,200	$17,196
Total Cost Over 2 Years	$16,380	$48,887

Wow, right? Cloud systems don't need pricey hardware or constant upkeep. Plus, they're great for remote teams.

On-premise VoIP: It costs a lot upfront, but it can work for big companies with specific needs. You get more control and maybe less lag.

"Overall, VoIP is much cheaper than premise based phone systems when it comes to total cost of ownership."

Think about your company's size, budget, and needs when choosing. For most small to medium businesses, cloud VoIP is the way to go.

Phone Apps vs Hardware

Another big money-saver? Using softphones (phone apps) instead of desk phones. Here's why:

Softphones: These are apps you can put on phones, tablets, or computers. They can save you a ton:

No need to buy physical phones
Use devices you already have
Less (or no) hardware to fix

For example, basic office headsets cost $10 to $50, with a total cost of about $120 over ten years. Compare that to fancy desk phones at $450 to $850, costing around $650 over ten years.

Desk phones: They cost more, but sometimes they make sense:

Better sound quality
Can work with old landline setups
Good for traditional offices that need top-notch calls

Think about your work setup and what your team likes when choosing. For remote or mixed teams, softphones are super flexible and cheap.

"Using NewLync softphone app enables organizations to leverage their investment in mobile devices, and/or have staff use their personal devices." - New Rock

Keep Your System Running Well

A well-maintained VoIP system isn't just about great call quality. It's a smart way to keep costs in check. Let's look at how regular maintenance can save you money and hassle.

Track System Health

Think of your VoIP system like a car. Regular check-ups keep it running smoothly and catch issues early. Here's how to keep your VoIP engine humming:

Use monitoring tools: Set up software to watch your VoIP performance around the clock. These tools track call quality, network speed, and data usage.

ManageEngine OpManager, for example, offers a Cisco IPSLA monitoring toolkit. It keeps an eye on key VoIP metrics and flags any issues.

Check key metrics: Focus on:

Jitter (signal fluctuation)
Packet loss (data that doesn't arrive)
Latency (call delay)
Mean Opinion Score (MOS) - overall call quality

If these numbers start to slip, it could mean trouble ahead.

Set up alerts: Don't wait for complaints. Configure your tools to notify you when metrics cross certain thresholds. This way, you can fix issues before they impact your business.

"VoIP monitoring ensures that any issues with VoIP calls are detected and alerted to the admin so service can be improved." - ManageEngine Blog

Test call quality: Make sample calls from different spots and times. This helps you catch problems early.

Check Provider Service

Your VoIP provider should help keep your costs down. Here's how to make sure they're doing their part:

Review regularly: Check in with your provider every few months. Ask about:

Planned upgrades or new features
How they're addressing any issues
Ways to optimize your current plan

Monitor their performance: Keep an eye on your provider's uptime and call quality. If you're seeing frequent issues, it might be time to look elsewhere.

Stay on top of updates: A good provider will let you know about system upgrades. These often include new features or improved efficiency - both can save you money.

"A great VoIP provider won't slack on that, they'll be proactive about reaching out to you with updates, regular check-ins, and even suggestions about how to make the most out of your service." - LineOne Team

Check your bills: Look over your monthly statements carefully. Watch for unexpected charges or services you're not using. You might find ways to trim your plan and save some cash.

Conclusion

Optimizing VoIP costs isn't about cutting corners. It's about making smart choices that boost your bottom line while keeping your communication top-notch. Here's what you need to remember:

Pick the right provider: It's not just about price. Look at features, reliability, and scalability too. Companies like RingCentral, GoToConnect, and Nextiva offer competitive packages.

Go cloud: Cloud-based VoIP can save you big. How big? RingCentral says businesses can cut costs by over 60% in the first two years compared to on-premise solutions.

Softphones save cash: Forget fancy desk phones. Softphone apps with basic headsets cost about $120 over ten years. A desk phone? $650. You do the math.

Keep an eye on things: Use tools like ManageEngine OpManager to monitor your VoIP performance. Regular check-ups prevent costly hiccups.

Don't settle: Negotiate contracts and review bills regularly. You might find hidden savings.

VoIP isn't just about saving money. It's about working smarter. As Rich Technology Group puts it:

"Understanding and implementing these cost-saving measures can not only significantly lower monthly bills and operational costs but can also help you squeeze out every ounce of value without paying extra."

The VoIP market is set to hit $145.76 billion by 2024. Why? Businesses are catching on to its potential. By following these strategies, you're setting your business up for the future of communication.

Take a hard look at your current setup. Are you squeezing all the value from your VoIP system? If not, it's time to start. The savings and efficiency gains are there for the taking.

FAQs

How much does VoIP cost per month?

VoIP pricing can be all over the map. But here's the scoop: you're typically looking at $25 to $40 per line each month. That said, prices can swing from $10 to $50 per user, depending on what you need.

Let's break it down:

Basic plans often kick off around $20 per user monthly
Advanced plans can hit $40 or more per user monthly
Extra goodies like call recording or toll-free numbers? They'll bump up your bill

But here's the thing: these are just ballpark figures. Some providers offer better deals. Take KrispCall, for example. Their annual plan starts at just $12 per user per month when you pay for the whole year upfront.

Now, here's where it gets tricky: hidden fees. They're like ninjas - sneaky and can pack a punch. For instance:

RingCentral slaps on a $4 per line "Cost Recovery Fee" and a $1 per line "Emergency Service Fee"

Nextiva tacks on a $3.50 per line "Regulatory Recovery Fee" and a $1.50 per line "E911 fee"

These extras can add up fast, especially if you've got a big team. So always ask for a full cost breakdown before you sign on the dotted line.

Here's a pro tip: If you're new to VoIP, start with a month-to-month contract. This way, you're not stuck with hefty termination fees if the service isn't your cup of tea.

Bottom line? VoIP is usually cheaper than old-school landlines, which can set you back $50 to $80 per line monthly. Plus, you get more bells and whistles with VoIP. Just do your homework on pricing to snag the best deal for your business.

How to Optimize VoIP Costs